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Stand your ground

Posted on by thelegalknow

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I’ve been practising law for some time now and one of the things that I have learnt, which was incredibly difficult to learn, is to stand one’s ground. I can now firmly stand my ground with YOU (the client) and the senior lawyers I work under. Why do you care? Well, simply because my confidence as a lawyer saves you money (yup, you know that paper we all want…). There are two scenarios which have played a recurring role in my career to date and these scenarios have taught me to stand my ground. Let’s take a look at them and then I’ll tell you how you can help your lawyers get to the level of confidence I have now (smug face) which should save you money.

Scenario 1 – A client desperately wants to do something that cannot be done but a dedicated lawyer, knowing that it cannot be done, still struggles to find a way. The client wants and the lawyer strives to give BUT it just isn’t possible. This is a rubbish scenario for everyone because the lawyer looks for the source of a myth whilst the client pays unnecessary costs to gain nothing.

Scenario 2 – A junior lawyer (they do all the ground work by the way) doesn’t think that a certain course should be taken but unfortunately the senior lawyer, eager to please the client and incur more fees (money, money money), doesn’t listen. A longer more difficult route is taken. As in scenario 1, the client pays unnecessary costs but to gain something it could have gained more easily and more cheaply.

I used to hate these situations. A junior lawyer pushing back against an experienced, Tom Ford wearing senior lawyer or a great lawyer too client whipped to be frank and say “sorry, this won’t work”. The disappointing feeling I experienced in these scenarios taught me to stand my ground in my profession. I will never lead you on a wild goose chase; if it can’t be done or it can only be done at a cost detrimental to your business, I will tell you and that will be it. If I’m working for a senior lawyer who is putting pressure on me to do A or B when I think C is best, I will throw all my toys out of my pram to get C, only giving up when I have been absolutely convinced that A or B is better. Sounds good right? Here’s how you can help to make sure that your legal team adopts this cost saving mentality…Ask to hear the best and the worst from your legal team AND reassure them that you’re READY to hear the worst. Also, direct your emails at the WHOLE legal team, not just the “front of house” senior lawyers, but the juniors too (those silent names that are cc’ed into every email to make sure that they pick up the work). In doing this you let the senior lawyers know that you value EVERYONE in the team and that at any given time you may ask for the junior’s opinion.

Deploy these tips and see the difference in your service. You should hopefully spend less time chasing dead ends and more time progressing to where you want to be.

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The bigger picture – selling your business.

Posted on by thelegalknow

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Ok, so it’s great that you’ve got your own business and that you’re doing so well. BUT, the question is do you want to be doing this forever? I don’t think so. If your business isn’t getting passed on to another generation then you’re probably looking to, one day, sell it and make a hefty profit! This post is a heads up about the things you need to be doing NOW, in order to build a product (yes, your business is your product) that sells quickly and at the best price possible. Here are my top tips!

Keep it clean – Your business must not have skeletons in its closet. I’ve said this before. Either you eradicate those skeletons or you confess to them, preferably the former. If you have unpaid bills, taxes or ongoing litigation, your business will not sell or it may sell BUT at a DISCOUNTED price. This is because instead of purchasing a nice shiny product, the buyer is purchasing a whole lot of risk. Risk is financial uncertainty and in business we despise financial uncertainty. We are constantly mitigating against it. So, clean up your business and keep it clean. Carry out your due diligence REGULARLY. Do not neglect complaints from clients or scary regulatory letters. The buyer of your business will carry out its own due diligence and it will be thorough. Would you buy a car without a test drive or seeing under the bonnet? Nope, I didn’t think so.

Show them the money – If you want to sell your business you have to be super transparent with your numbers. Start planning now to make sure that your business has a financial record to attract a good buyer. Maintain a healthy working capital, renegotiate supply contracts and make sure that you are getting the best deals for your business. Also, get on top of your debt. Pay off as many of your loans as possible. Think about what is actually costing your business money. If your business requires a lot of machinery, are you using all of that machinery? Can you sell some of it? Don’t forget your forecasts – get them ready and back them up with evidence.

Create and implement a business manual – It is amazing how many of my clients do not have systems and procedures for the simplest of things to do with the day to day operation of their business. If you sell products worldwide, you should not be selling those products on ad hoc procedures. You should have a clear process that the buyer of your business can step into tomorrow and operate. You should have systems in place for every aspect of your business. You should have formalised documents. Get your lawyer to draft standard form employee contracts, terms and conditions, disclaimers, policies etc. Also, is the structure and ownership of the company clear? Make the ownership as clear and as transparent as possible.

Show them your A team – Behind every great business is a strong and passionate management team. Your management team is a big part of your business’ valuation. It is therefore crucial that you consider if your business can retain good employees – this may require considered incentives. The buyer of your business will want all your key people to be a part of the sale. It will also want the assurance that your business is not a DIY job; show off your professional support. Your lawyer, your accountant, your consultant all make an impression. Those relationships matter because they instil confidence in the buyer that everything to do with your business has been done properly. Also seek advice from your A team. What do they think? Get your lawyer to review your business structure and advise you as to whether you need to change it in order for it to be an attractive purchase. Your lawyer will take you through the whole process and organise all of the legal paperwork to ensure that there are no unnecessary complications before and after the sale. You really need everyone on board advising. I have worked on an international acquisition where the whole deal was restructured because of tax. It was cheaper to do it another way! Three days before closing we had to change everything!

You may be far off from selling your business at this point in time, but if you want a big pay out someday, you should start doing all of the above now!

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