Legal advice - risk aversion or value add?
Looking out from a lawyer’s eyes it seems strange that the profession gets criticised for being “risk
averse”. After all, that’s what legal training is all about – identifying, avoiding and mitigating risks.
But if risk avoidance is all you are selling, clients tend to see you as a “necessary evil” and engage
only reluctantly. The dental profession faces a similar marketing challenge. We all know that if we go
to the dentist regularly our teeth will benefit – yet many of will avoid booking a check-up for years on
end. Maybe that’s why advertisements for dentists no longer show images of tooth decay – these days
they are filled with images of dazzling smiles and couples kissing. It must work – when I tell my
teenage son that he should brush his teeth regularly to stop them falling out when he is 40, it doesn’t
have the same effect as when I point out that girls like kissing boys with fresh, minty breath and shiny
teeth.
So how does that apply to legal services? Well, take the “terms of trade” that every business needs
to contract with its customers (and often its suppliers). There are plenty of businesses who write their
own without involving a lawyer. If your lawyer uses the risk avoidance arguments like “it will help you
recover the goods that you supplied if you don’t get paid” or “we will include clauses that will limit your
liability if you get sued” you might decide it’s a risk worth taking. But a message that emphasises the
positive benefits like “having clear/compliant terms and conditions will help you sell more
goods/services because they will show your customers that you are a professional organisation” may
be compelling. This is particularly important if your customers are other businesses that are bigger
than you.
Just as the teenage boy with the fresh breath and shiny teeth may attract the attention of prospective
girlfriends, a well written customer contract can help build the trust in a prospective customer that
leads to the big sale.
A good commercial lawyer understands that approaching any situation only looking for ways to
eliminate risks will never get the deal done. People and companies go into business to make profits
and my job as your lawyer is to maximise the chances that you will be successful. One of the ways to
maximise your profits is to assume the risks that you are in the best position to manage. For example,
if your customer is worried about the reliability of your product, you can offer a longer warranty and
charge extra for that warranty protection. Or if your customer needs the flexibility to cancel the contract
if their circumstances change, you can offer a break fee to mitigate their risk (and yours).
The value of a good lawyer will far outweigh any fee you are charged. The key is to make sure you
and your lawyer have the discussion about what “adding value” means to you before you get started.
This resource has been provided by Nick Hodson Lawyers and is
provided as an information sheet. For further expertise advice in
this area please contact Nick Hodson @ Nick Hodson Lawyers or
call The Engine on 09 869 3761.
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