Business lawyers often define themselves in terms of documents. An intellectual property lawyer will say he drafts patent applications. A contracts lawyer will say she drafts agreements. An estate planner will say he draft wills & trusts. That’s what LegalZoom does. If you define yourself in terms of drafting documents, you are destined to lose the battle to online automation. So, why do we as lawyers define ourselves in terms of documents?
We were trained to do that historically. It was easier for lawyers to handle a wide variety of matters without being an expert. Lawyers are bright independent-minded scholars trained in law school to think, but not trained in any specific practical way. This worked well almost 100 years ago when my grandfather opened his first law office in 1921. At that time, a lawyer had to be a generalist. He opened his office in a local town and needed to address a wide range of problems everything from litigation to incorporation to will & trusts. In a local setting in the 1920s, there was much less opportunity to specialize. We were trained to respond to the needs of whatever client walked in the door.
When you are a generalist, it is hard to solve problems because there are so many new situations that your perspective is limited to what you know. So, what lawyers knew and were comfortable doing was often the legal documentation. It was easier and more honest to say they could draft the contract, but they were not familiar with the business issues. So, it became common for lawyers to distinguish between “legal issues” and “business issues”. And they told clients they could help with the former but not the latter. That is also why lawyers began to define themselves in terms of the documents they drafted rather than solving the client’s problem.
We are consciously trying to change that. At our firm, we say we help entrepreneurs and business owners grow their business by using our legal skills to solve business problems. It is a totally different mindset. We think in terms of solving problems rather than drafting documents. This is what we mean by taking a “solutions approach”. Great drafting is not enough if it doesn’t solve the client’s problem.
Yes, it is true that, sometimes, the matter is beyond the scope of the lawyer’s knowledge. The response should not be to disclaim responsibility. Rather, it should motivate the lawyer to find the answer or help the client get additional resources necessary to provide a complete solution.
Ok, so, the client walks into their local attorney’s office and says they want to form a corporation or an LLC. The local lawyer, a general practitioner, says no problem, we form LLCs all the time. They are very easy and you can avoid all of those “corporate formalities.” The lawyer then prepares an Operating Agreement and files the Articles with the Secretary of State. Voila! The new entity is formed and the lawyer drafts a brilliant operating agreement that addresses the all of the rights and obligations of the owners. Only one problem. The company finds out later that because one of the owners is a foreign national, they have to file a tax return in the U.S. or be subject to a 20% withholding penalty.
What happened? The lawyer says, that was a tax issue which should have been addressed by your accountant. The accountant says they were not consulted until after the entity was formed. The client says, didn’t you tell me this before? What good is forming an LLC if it creates a tax problem for the owners?
When you think about solving problems instead of drafting documents, it opens up a whole new world of opportunity for lawyers to create new services and add more value to their clients, and to deliver better results. Historically, as business lawyers, we defined our services in terms of documents we provided to clients. But defining our services in terms of documents that really limits our role and forces us to compete with online document assembly services. Why not define our services more broadly?
For example, instead of incorporation, we define our role as “Business Formation Counselor”. It is our job to help business owners form new entities. This slight shift in thinking begs the question as to what do business owners need to start a new business and how can we as lawyers help them. One way is for us to offer resources, vendors, and checklists for entrepreneurs that can assist in the start-up process and anticipate problems that are directly or tangentially related to the business formation documents, such as tax and accounting.
Wouldn’t we as lawyers do a better job if we think from the client’s perspective as to what problem they are trying to solve instead of what documents we provide?