By: Kenton Bednarz
The Engagement Can Be More Than “Transactional”
Companies today face a myriad of legal opportunities and challenges — seemingly daily — many of which require quality, precise and timely legal advice. When engaged for these opportunities and challenges, the high-value transactional attorney finds ways to deliver a service offering that includes more than these necessary attributes in pursuit of becoming an invaluable strategic partner to its client.
When vetting a transactional attorney, many businesses look for baseline qualities — experience, expertise and efficiency. And while each of these is critical, I assert that such attributes are more “table stakes” than they are qualifying or disqualifying. These antes are essential, yes, but they only scratch the surface of what a truly exceptional transactional attorney can bring to the game.
The high-value transactional attorney brings qualities, perspectives and an enthusiasm for the client’s underlying business to the relationship to become a true strategic partner — this advisor actively provides more than document drafts, redlines and hypotheticals; this advisor consistently helps the client manage risk and protect profits, inherently facilitates growth by working with the client teams to capture the value of opportunities and make risk-adjusted decisions, and measurably contributes to the execution of the client’s overall business strategy.
Determining the Right Transactional Attorney for Your Business
Partnering with a skilled transactional attorney is not just a matter of fulfilling a legal requirement; it’s about positioning your company for long-term success. If you’ll forgive the pun, such a relationship should be more than “transactional” if one is looking to optimize the value being delivered by the transactional attorney. For general counsel and company leadership, this partnership can be the key to navigating complex transactions, mitigating risks, and seizing opportunities in a proactive and efficient manner — and not just when obvious need arises.
To begin, make sure the baseline metrics have been applied, evaluated and vetted. The foundation of any successful transactional attorney-client relationship is built on a few fundamental characteristics of the attorney:
- Specialized Expertise: Completing complex transactions requires a deep understanding of the broad transactional landscape, context of the particular deal and leverage. A valuable attorney brings a wealth of experience in using this understanding to navigate the transaction’s complexities and issues that arise, and it cannot be overstated how valuable specialization and deep experience are to the partnership. (There’s that word again…partnership…which to me means a collaboration between attorney and client to accomplish an objective in pursuit of mutual benefit.)
- Corporate Governance Awareness: Proper corporate governance is non-negotiable. A skilled attorney ensures that all actions taken are in line with legal and governance requirements, which is crucial for securing the necessary authorizations and avoiding legal pitfalls. This often comes with an attorney who has the ability to add some breadth to the specialized expertise mentioned above.
- Process Management Skills: Efficient process management is crucial to keep transactions on track. A well-organized attorney can help streamline the transaction process, minimizing delays that can derail deals. Anything that delays or complicates transactional matters brings unnecessary and unwelcome costs and consequences. Process (and people, for that matter) management is a critical aspect of ensuring that a transaction runs smoothly. A transaction that starts on the wrong foot can lead to chaos down the line. An attorney who is organized and process-oriented can help set up the transaction in a way that minimizes potential issues, keeps all parties aligned and working toward the same goal, and ultimately leads to a successful closing. It starts early and is applied often.
Beyond the Baseline: Proactive Risk Management
One of the most significant ways a transactional attorney can add value is through proactive risk management. Note: this isn’t just about avoiding risk. Rather, it’s often about understanding risk in the context of the overall business objectives. Too often, attorneys reflexively get bogged down in an attempt to eliminate all risk from a deal. It’s part of our nature and instinct as attorneys to shield our clients from risk. But in so many cases, success in business is about balancing risk and reward and taking calculated risks, not avoiding risk altogether.
An effective transactional attorney works closely with the business team to:
- Identify and Quantify Risks: Rather than treating risk as a blanket negative, a high-value attorney will help identify specific risks and work with the business team to quantify them and ultimately evaluate them against the potential returns.
- Mitigate Risks: Once risks are identified, the attorney can work with the business team on mitigating them through various means, such as contractual provisions, implementing certain processes, procuring appropriate insurance, or enlisting team members to actively manage the risk.
- Differentiate Between Business and Compliance Risk: It’s crucial to distinguish between business risk — which should be weighed against potential returns — and compliance risk, which is non-negotiable. Legal compliance is black and white; the law must be followed, and there’s no room for compromise here. High-value companies never wager compliance risk for expected returns, and high-value attorneys know the difference and communicate it timely and effectively to the client.
More than Lip Service: Find a Strategic Business Partner
The phrase “strategic business partner” is often thrown around in the legal community (and others), but the highest-value attorneys truly embody it in practice. To genuinely be elevated to the realm of strategic partner, an attorney needs to bring more than just legal expertise; he or she needs to bring business acumen to the table as well. The latter is far less common than the former.
A partner delivering bona fide strategic guidance would bring all of the following, in addition to the specialized transactional law expertise and proactive risk management:
- Experience in the Boardroom: An attorney who has been part of executive leadership teams and sat in the board meetings in which business decisions are made at the highest level understands the broader implications of — and how companies determine why, when and how to pursue — each and every material transaction. From this experience, he or she can provide insights and perspective into how a transaction fits within the company’s overall strategy and how it will impact the organization beyond just closing the deal.
- Know the Business: The highest-value attorney takes time to learn the business of its client (the team, the operations, the culture and what matters). This knowledge is used directly and indirectly throughout every transaction that attorney is involved in, to not only get it completed, but to capture the value and the other things that matter to the company in that transaction (and to avoid wasting time, energy and resources on things that don’t matter).
- Facilitating Business Growth: By understanding the strategic goals of the business, a transactional attorney who is a strategic partner to the organization can positively impact and facilitate company growth by providing not only smart legal advice, but ongoing counsel that aligns the transaction objectives with the company’s business and growth objectives.
- Long-Term Relationships: Building a long-term relationship with a transactional attorney fosters trust and efficiency — alluding back to the “baseline” metrics we opened with. The long-term nature of a relationship with an attorney that is not just a “transactional” one adds regenerative value that continues to build upon itself as the relationship between the high-value attorney and client team evolves, right along with the company itself. When an attorney understands a business and its market inside and out, he or she can offer advice that is tailored to very specific needs and situations, with the ability and foresight to anticipate issues, challenges and opportunities, even before they arise.
It’s Okay to Be Highly Selective — Recommended, Even
In today’s increasingly complex business environment, one in which the stakes continue to escalate (bringing both risk and reward), the importance of having a high-value transactional attorney who can serve as a trusted partner to the organization cannot be overstated. For companies and their general counsel, this partnership can bring a wealth of benefits, from expert legal advice and proactive risk management to strategic business insights and streamlined processes that yield financial returns. By working closely with a high-value transactional attorney, your company can navigate the legal landscape with confidence, ensuring that every transaction contributes to its overall success, as your legal partner contributes to your business’s long-term growth and success.
To explore these benefits and how they may help your organization, contact Kenton Bednarz at [email protected], or call him at (248) 380-9300, extension 111.