Lawyers are, in part, counselors and advisors. As with accountants, tax professionals, financial planners, bankers, etc., lawyers should play a role in helping to grow and maintain a successful business by giving practical, helpful advice. But all too often professional advisors (lawyers being the prime suspects) stand in the way of business success.
This is due, in part, to the multiple roles advisors play. Lawyers, for example, are called on by businesses to minimize risk, help achieve certainty, decrease exposure to claims, increase profitability, and protect ongoing interests. These can be conflicting goals because the advice given to minimize a particular risk can also act to slow down business growth.
To use a current example: the use of social media in marketing businesses. Have you noticed that a substantial amount of businesses advertise that they are on Twitter and Facebook (and linkedin, yelp, google+, etc.)? In recent months I have seen a sharp increase in the amount of advice offered by lawyers on the risks of allowing employees to use social media. Many lawyers fear that employees may make claims, promises, or misstatements without the business’ knowledge, which could then tarnish the business’ reputation or expose it to potential risk and lawsuits.
But these so-called risks must be counter-balanced with the huge advantages businesses have to gain by engaging in real, meaningful social media marketing. Times are changing, and the way in which consumers and customers view a given business is not based solely (or even at all) on the ads seen on television, magazines, or billboards. So much of traditional media is either ignored or simply discounted. Instead, customers are looking for real, live interaction with real, live people. And when they interact with a business or company, they often perceive that business as a real, live person. Just look at many consumers relationship to companies like Apple. People who love Apple, really love Apple as if it is a person in many cases.
So what is a business to do when the professional advisors say “no” to a critical business idea or initiative? The answer lies in obtaining practical advice. We lawyers are great at pointing out all the things you should not do and all the terrible things that will happen if you do them. And I have written often about the critical need to consult with a lawyer (and other professionals too) before a problem arises, which is still important. However, in seeking out that advice it must be tempered with real-life practicality—also known as common sense.
Common sense if a bit like the U.S. Supreme Court’s definition of pornographic speech—we can’t tell you what it is, but we know it when we see it. So it changes with each situation and each business owner. As a business, you need to know the pros and cons of a given business activity you want to enter into. And you want to avoid the risks that are easy to avoid. But when it comes to a potential risk that cannot be avoided altogether, then you need to make a hard business decision. That decision can only be made by the business itself because each business is different and has a different risk tolerance.
By arming yourself with the facts (both potential risks and benefits) and seeking out practical, common sense advice, you’ll be able to make an informed decision and help your business grow the right way. It’s okay to minimize risks, but let’s keep business growing for the good of our community.