|It seems most of us have a steadfast aspiration to do everything in our power to avoid falling into the clutches of estate agents, dentists, women’s hairdressers and, of course, lawyers. A straw poll will elicit emotive terms like: “pain”; “I don’t know what they actually did to/for me”; “the costs were outrageous”; and “how do they get away with it?”
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.