In the best interests of the client
Selling the house on Trade Me, getting a set of dentures for your 21st birthday (like many did in the bad old days), persuading a friend to take her/his life into own hands and snip away “c-a-r-e-fully” are possible solutions to the rest of that list, but if you are contemplating getting into or out of an SME, or you’re the owner or manager of one right now, you’ll just have to pucker up and step over the threshold of fear and doubt when approaching a lawyer.
Seems there is no really effective way to do without their services without taking inordinate risks, which will inevitably prove costly. So, let’s examine the options and end with a better understanding and modus operandi for positively getting the best out of your legal interactions at a reasonable price.
Remarkably that is all possible. You see, a good deal of the negative mystique which developed around the legal profession is Dickensian, deserved and disappearing, especially in New Zealand. A number of professional surveys in recent years have shown that lawyers generally have moved into the ‘service industry’, are far more negotiable on charges and are increasingly being viewed as positive business partners, rather than the last resort, a must-to-avoid type of commercial and personal mythology.
So what are your options, given SMEs are seldom awash with spare cash?
We’ve looked at a Shortland Street, big-name practice (with a surprisingly strong focus, history and case for linking up with SMEs), Simpson Grierson; world-class specialist patent and intellectual property (IP) practice AJ Park; a solid mid-sized Auckland generalist operation, Fortune Manning; and a well-established law firm focused on acting for businesses and their owners in Wellington, Gibson Sheat.
They all reckon “there’s never been a better time”; but then again, that’s just what you were expecting from them.
Fortune Manning has been voted Mid-Size Law Firm of the Year, been a finalist and first runner-up, while being a significant presence in Auckland business and legal circles for more than a century. According to David Selkirk, managing partner, “by providing quality, reputable legal advice in specific areas”, they have come to be regarded by larger firms as “punching above their weight – without clients incurring the costs associated with top 10 law firms”.
He believes that in this techno-age, you should “Google” the lawyers/firms you might be looking at engaging.
Trends in the market
Selkirk also has a very succinct and insightful view on trends in our local legal ‘market’, as he calls it, over the past five to seven years – a number of which are most favourable to clients, it would seem. These include:
• Clients becoming more sophisticated in their knowledge of what they require and the price they are willing to pay, as they realise law firms, like banks, are there to provide them with a service – “lawyers are no longer held in the same high regard as a species; there is no longer the same fear about negotiating with lawyers to gain more favourable terms”.
• Boutique firms – many have sprung up as a consequence of practitioners becoming disillusioned with positioning and treatment in the top tier legal firms. Relative size means they are more flexible and keen to meet client demands. Consequently, they have made significant inroads in a relatively short period of time.
• The economic climate has seen an increased demand from clients asking their lawyers to move away from time/cost billing to a ‘value billing’ approach – a fixed fee for the work to be undertaken, rather than paying by the hour. Those firms which were early-adopters of this approach are keeping their clients; those not prepared to negotiate are finding their clients are ‘shopping around’ for alternative advisers.
Tony Southall chairs Gibson Sheat, and despite being deeply immersed and very au fait with the bureaucracy and red-tape jungle that is our capital city, has a very informal, broad, professional approach to the law and clients.
“For us it is a real privilege to be asked to help someone solve a business or personal problem and it’s rewarding to do so. We enjoy making a difference, making our clients’ lives easier and helping them to achieve a goal.
“We try hard to really understand a client’s legal issue in its wider commercial or personal context. This enables us to look at issues ‘holistically’ and find alternative or simpler solutions which will minimise legal input, yet still produce the right result for the client commercially. With businesses, it really helps if clients share their business plans with us. This provides us with the client’s long-term ‘game plan’ and that context is extremely valuable in determining our legal strategy to remove, avoid or alleviate a legal issue.
“Business lawyers should be utilised as part of the ‘inner circle’ on key business decisions or plans. Lawyers are often very well-networked and know other professionals or business contacts they can tap into and help a business to achieve a strategic goal quicker,” says Southall.
Has he an example of how this all came together, cost-effectively, to the obvious benefit of a client?
“We advised a client to undertake an internal systems and legal compliance check and to position the company to be acquired by an overseas competitor. It worked a treat. The business owners became very wealthy and retired early,” he notes.
Compliance is also a topic of great relevance to SMEs in the opinion of Craig Nelson, senior associate at Simpson Grierson.
“View a compliance programme as an essential tool to help you make more money and keep the money you have made. And know that the consequences of failing to comply can severely damage your business and brand. To quote: ‘It takes 20 years to build reputation and five minutes to ruin it’.”
In mid-2009, Standards New Zealand introduced the Compliance Standard to New Zealand, NZS/AS 3806:2006” – a “rollicking good read”, according to a very much tongue-in-cheek Nelson.
“The Standard, which originated in Australia, has been adopted in New Zealand as ‘a voluntary guide for organisations to customise and develop their own compliance system’ and essentially provides a benchmark for setting up a compliance programme.”
Broadly, it covers four themes: commitment to compliance; implementation; monitoring and measuring; and continual improvement. Put that way, it sounds relatively benign, although one suspects it will not help New Zealand’s rating in the next “Simple to set-up a business” review.
“The good news is that the Standard is just that: you can implement your own compliance programme. It does not need to be a complex detailed programme, but it does need to be effective – reduce the risk of mistakes and be capable of being implemented simply and cost-effectively,” Nelson says.
No, it isn’t simply lawyers looking for new avenues of revenue in tight times: clients (existing or new) can do a good deal of the documentation themselves, before running it past their legal advisers. SMEs could regard it as doing their own ‘due diligence’, highlighting how your company conforms to the likes of trade practices, fair trading and the rest. It will be worth having up your sleeve in times of volatile credit and forced acquisitions, Nelson assures.
Which is a cue to ask him how a big name nationwide firm can compete with the former high-school mate, around the corner, who has set up his own legal practice.
“Our big advantage is that we have specialists who are current on everything pertaining to their field of expertise. They don’t have to spend costly hours getting up to date with an aspect of law they might have only come across at university,” says Nelson.
“We will have people with knowledge readily available, able to provide a tailored and cost-competitive service through having a team of specialists in each discipline on tap.”
Nelson believes the secret of controlling costs with any size of practice is to know in advance what, when and how you want the task to be addressed.
“It’s the same as when you come to build a house. If you know what you want, right down to the level of finishes, you are not going to spend anything like the person who walks in and says ‘Build me a house’.”
Simpson Grierson will be prepared to meet with you, assess your expectations and give you an estimate of costs upfront.
What about going directly to a specialist – even a multi-expert, if you like – in a defined-discipline firm?
Anton Blijlevens is a partner in A J Park Law and A J Park Patent Attorneys’ Auckland office. He specialises in all aspects of patent and related intellectual property (IP) law – in particular for mechanical and manufacturing patents. He is a qualified engineer, a registered patent attorney, a lawyer and a copyright and designs specialist, all in one. And he is typical of the highly-qualified types you encounter in these corridors of (intellectual) power.
Surely he’s going to cost a fortune and not be interested in a little, local SME? No and no, he reckons. And he’ll put his money where his mouth is, with a free, no obligation initial consultation. That’s something to reckon with, given the senior people at A J Park in Auckland, flit about the world consulting to global giants too.
“The general firms tend to limit their IP involvement to trademarks and copyright. As a specialist firm, we also have strength in patents, another branch of IP. At A J Park, fully half the staff working on the patent team are technically qualified – engineering, biotech, physics, software etcetera. That means when inventors come in we can talk shop with them.
“That’s probably the most significant difference between a law firm with an IP practice and ourselves. Which probably leads us on to why would you deal with us when inventors are perfectly capable of filing a patent themselves?”
Blijlevens implies the devil is not so much in the detail, but it is really the lack of detail that puts you in the hands of the devil. An “and/or”, instead of an “and” or an “or” can have massive consequences. It’s the one vague paragraph in a 30-page document which lets the wolves in. Too many inventors live to see a cunningly crafted derivative of their masterpiece become an icon and a proverbial gold mine.
“In our patents’ team we have the technical and the legal qualifications, so we are able to extract maximum value from the legal system for our clients. One of the most significant things we do is documenting, accurately and in great detail, the specifications of the client’s invention. They have to be technically accurate and contemplate ‘design-around-options’, so that someone cannot change ten percent of the product and get around the patent,” says Blijlevens.
“We then assess the patent systems around the world to cost-effectively get the best value out of the process for the client. That is so much more effective in the long run, than being brought in to try to tidy up matters when they have gone horribly wrong,” he adds.
The final word is from the NZ Law Society on what to do if you are not happy with your lawyer?
“If you are not satisfied with the way your lawyer is doing the work for you or you feel the cost is too high, or you are unhappy about a lawyer’s conduct, you should first raise your concern with the lawyer or law firm, and use their complaints’ procedures to try to sort it out, says Sue Ewart, a senior manager at the NZ Law Society.
“Should you feel this is not appropriate, or you are still unhappy after doing so, you have the option of taking the matter to the Lawyers Complaints Service, run by the New Zealand Law Society. There is a brochure too: ‘How to complain about a lawyer’. And you can call 0800 261 801 or go to the website www.lawsociety.org.nz.”
Here’s hoping you never have to.
Kevin Kevany is an Auckland-based freelance writer. Email email@example.com