Involving lawyers in strategic planning can pay handsome dividends, but are some companies missing a trick, asks Chaman Salhan, chief executive of legal firm 2ndOpinionNow
During my time at Cass Business School, studying banking and international finance, I was taught that businesses could maximise profit through successful marketing, careful financial management, a culture of innovation and a strong corporate strategy. Never once did I hear mention of how the right lawyer can also add profit. Is this because we don’t or because a lawyer’s real worth is undervalued?
Businesses – and lecturers – see them as relevant only when there is a corporate problem. But I believe the incorporation of lawyers into the fabric of strategic planning from an early stage will ultimately pay dividends.
Indeed, hiring a good lawyer can add up to 10 per cent to a company’s profit. Here are six ways to achieve this:
Any competent lawyer will have multiple clients, each with their own USP. The lawyer will know the strengths of the business and have access to the decision-makers. Most businesses spend a fortune on attracting customers, but the right lawyer can arrange social networking events. In one case, I was able to introduce a rapeseed manufacturer to a substantial savoury manufacturer, thereby increasing profitability for both companies.
Businesses need airtight contracts to ensure payment. In reality, potential defaulters will only chance their luck if they believe the bark will not be followed by a bite. If lawyers make the potential defaulter fear the bite, they will pay on time. One of my clients had been chasing aged debt for nearly a year without success. Within one month of becoming involved, full payment was received.
Managing staff is crucial to business performance. Contracts of employment (including performance-related incentives), complaints procedures and restrictive covenants will help to improve productivity, tackle disciplinary problems that may arise and, hopefully, prevent staff departing with key customers.
4. Establishing and protecting your USP
If the business has a patent, copyright, trademark or other USP, it needs to be registered and protected. Theft of intellectual property or confidential material can have a devastating impact on any business and it needs to move quickly to stop the abuse. This can be achieved by emergency injunctions and followed up with a whole raft of measures including private criminal prosecutions. Defamatory remarks must be stamped out. Recently, we successfully stopped a troll who targeted businesses hoping they would pay money to him to protect their brand.
Problems with a regulator or HMRC can distract senior management from what they do best – namely, making the business work. The opportunity cost of dealing with a problem is rarely measured. Regulatory work also encompasses barriers to entry. Lawyers can help companies think outside the box. One of our clients recently broke the American market after receiving our support and assistance. Their CEO remarked: “I never dreamt it was possible.”
6. Exit strategy
Shareholders want to be able to exit the business, recoup investment and be rewarded for risk. The right lawyer can help steer the business towards progressive exit policies, whether by way of market flotation, acquisition by a competitor, or sale of interest to other shareholders or employees. An effective exit policy encourages inward investment.
The right lawyer will protect the business and pre-empt problems, enabling management to focus on making money for shareholders; introduce the company to new suppliers and customers; help it enter markets it never thought it could conquer; and help business owners exit in an easy, efficient and equitable way. A good lawyer is one of the soundest investment decisions a company can make.
Could you benefit from this type of lawyer/client relationship? Find out more at
020 7936 3177
Chaman Salhan is a member of IoD Central London