CWC 31: Using your lawyer as a business advisor (Matt Benson)

Matt Benson, an attorney with Cook Little Rosenblatt & Manson, explains how good lawyers can offer much more than advice on contracts if you're willing to ask.

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Many of us think of lawyers like we do doctors: someone to go to for a fix when something goes wrong. Just as seeing your doctor when you are healthy helps improve outcomes, so does building a relationship with the attorney you use for your agency business.

In this episode, Chip speaks with Matt Benson of Cook Little Rosenblatt & Manson of Manchester, New Hampshire.

Matt has decades of experience in working with business owners on challenges ranging from the formation of the business to its eventual sale. He discusses why — and how — you should leverage your lawyer for more than just legal advice.

“One of the things that we try to do is to make sure that my clients are making fully informed decisions. And some of that is liability considerations. But some of it is also providing information and insight in terms of what we’ve seen done before, what deal structures may work or should be taken into account, what issues may pop up that we’ve seen arise,” Matt explained.

It’s all about helping the client achieve their goals. Matt says he tries “to figure out if a client is at point A and wants to get to point B, what might be the most sensible path for them to get there.”

Chip and Matt discuss a range of topics, including:

  • Finding a lawyer that can give you good business advice alongside legal counsel.
  • Managing the impulse to hear the clock ticking on billable hours.
  • Tapping in to your law firm’s connections for networking.
  • Maximizing the relationship by sharing more information about your business.
  • Helping your lawyer get you the best results by sharing your ultimate goals.

“It’s always less expensive to avoid a land mine than to try to pick up the pieces after you’ve stepped on one,” Matt concludes.

About the Guest

Matt Benson

Matt Benson is a corporate attorney and advises his business clients on a variety of legal and business issues. He represents entrepreneurs of all types and at all stages of their businesses, from start-up to exit. In his work with start-up and other privately held companies, Matt has counseled his clients on a variety of corporate matters, including entity formation, obtaining angel round financing, venture capital or other debt and/or equity financing, executive and employee compensation, contract issues, equity ownership matters, and exit strategy issues.

Transcript

The following is a lightly-edited automated transcript and is not a replacement for listening to the audio.

CHIP: Hello, and welcome to another episode of the Chats With Chip podcast. My guest today is Matt Benson. He’s a lawyer with Cook, Little in Manchester, New Hampshire. Welcome to the show, Matt.

MATT: Hey, thank you very much Chip.

CHIP: You know, I know that our listeners are out there. And they’re listening to this podcast and saying, Oh, my God, I have to listen to a lawyer for the next 20 minutes. What am I going to do? But I have to assure you that I have known Matt for almost 20 years now. He’s been my primary business lawyer for just about every business I think I’ve ever had. And he’s going to give you some really great insights into how you can go beyond the mundane legal issues when you’re dealing with your lawyer and instead get practical business advice. So I’m really excited to have you on the show, Matt.

MATT: Hey, thanks. Yeah, I’m happy to happy to participate. And hopefully I can shed a little bit of light on some of the things that I as a lawyer do other than kind of provide the the ordinary every day kind of legal advice.

CHIP: As it turns out, you don’t merely speak Latin to people, right and type in all caps, you actually, you have some good insights that will help people make better business decisions.

MATT: Yes, my Latin’s a little rusty. But yeah, part of the, you know, the favorite part of my job is actually providing some of that business advice, business experience, business perspective to a lot of what we do. And I think it actually allows a good lawyer to provide more practical advice. It’s easier in some ways to advise your clients about limiting or trying to eliminate liability. But that’s from a practical standpoint, generally, you know, not the way you can proceed when you’re trying to get a deal done.

CHIP: Right. And it, you know, I think one of the things that you and I have done a good job of over the years is that, you know, I’ve usually come to you and said, okay, you know, this is what I want to this is what I want to accomplish, how do I get there? And I think a good lawyer helps you do that, as opposed to saying, No, you can’t do that, yes, you must do that, and instead figures out how to navigate the waters of each individual situation.

MATT: Yeah, one of the things that we try to do, at least I try to do is to make sure that my clients are making fully informed decisions. And some of that is liability considerations. But some of it is also providing information and insight in terms of what we’ve seen done before, what deal structures may work or should be taken into account, what issues may pop up with that we’ve seen arise. So trying to take a more holistic approach to try to figure out if a client at point A and wants to get to point B, you know, what might be the most sensible path for them to get there.

CHIP: And I think the idea of informed decision making is really the key here. Because most deals, whether you’re selling a business, or doing a deal with a client, or setting up some sort of a partnership, you know, there are always going to be things where you’re going to have to make concessions. So you’re never – no side is ever going to get 100% of what they lawyer might write in a in a dream document. So you have to understand where you willing to compromise, what risk you’re willing to take on. And you know what the most likely scenarios are in the future to that you’ll have to handle with this legal document.

MATT: Yeah, in the spirit of compromise, nobody gets everything that they want. And actually, I don’t think that’s the, that would be a hallmark of a good deal. If one side gets everything they want, and the other doesn’t, or gets nothing that they want, that’s not a deal, in my mind, that’s going to be successful, longer term. So it’s really trying to figure out from the deal perspective, keeping in mind, obviously, what you need to get for your client is a better approach and working with your client and communicating with your client to make sure that your client has his or her eyes wide open. Regarding the different considerations that should be thought through. Yeah, it really is important that so it’s, it’s the communication is really important, as well as that informed decision making, they go hand in hand.

CHIP: And I think one of the advantages that a good lawyer brings to the table in these situations is they’ve typically seen lots of different deals, often with companies similar to your own, whether you’re a PR and marketing agency, or some other kind of business. And so they can offer you perspectives and say, you know, yes, this is a risk, but I rarely see it play out, or this is a risk, and it’s something that happens all the time. So you really need to be attuned to it. And I think that’s something that a lot of folks, when they’re working with their lawyers, aren’t thinking about, they’re thinking more about, okay, my lawyer has got, you know, he’s got the proper training. He’s been, you know, he’s been to law school, he’s passed the bar exam, he’s, you know, he checks all of the technical boxes, but it’s really their vast network of experience and all the different scenarios they’ve seen, that makes a good lawyer, a good advisor.

MATT: Yeah, I think that experience component is something that a good lawyer can bring to the table. You know, oftentimes, we’re dealing with a client that have never done the cut deal that they’re looking to do, maybe the sale of their business, they’ve just never gone through the process before. So they may not fully understand and appreciate what the due diligence process looks like, what they should ordinarily expect, you know, a buyer to be looking for, why a buyer might be asking certain questions or be looking for certain information. And all of these things are kind of less legal, but more part of the business deal and business strategy. But a lawyer can be, because of that lawyer’s experience doing deals, doing deals in the past can be a valuable resource and tool to try to give the client, you know, better information, with better information comes better decisions.

CHIP: And you can say things like, well, this is, you know, the fact that they’re asking for this is a red flag this is this is, you know, usually a sign that perhaps they’re, you know, the buyer is not serious, or that you know that they’re focused on the wrong thing. There’s a lot of sort of signs and signals that you can take out of your vast experience and share with your client who, as you say, in most cases, whether it’s selling the business or or doing a major deal, most business owners aren’t doing tons and tons of these over the course of their career. So they simply don’t have that same background and experience to make those judgments without additional information.

MATT: That’s right. And it might not be readily apparent why the buyer’s asking for certain information. So trying to ferret some of that out could also be part of the process, or maybe we’ve seen, you know, a similar situation in a prior deal. So hopefully, you know, with that experience and background and expertise, you know, the lawyer can help advise on some of those business terms and business issues and general deal strategy, things that come up in the course of trying to get a deal or transaction done, that the client just may not have ever seen before or ever really had to think about.

CHIP: And so if someone’s working with a lawyer for the first time, you know, how do they make sure that they’re they’re maximizing the advice that they’re getting? What are what are some tips that you can give them to make sure that they’re going beyond just the the black and white of the agreement and, and really trying to get those insights?

MATT: Yeah, I would say that one of the critical things is to look at the lawyer that you’re using, as you know, more than just, you know, an expense if you can, but consider the lawyer, somebody who hopefully will be a longer term long standing kind of partner in your business, somebody who, when certain issues come up with somebody you think you can turn to for trusted advice. And if you’ve got the right lawyer for you, that’s something that’ll just evolve over time. And, you know, I always find that I can do my job better, when I’ve got that level of a relationship with a client, because I’ve got, you know, a longer term relationship, I’ve got more context, because I know more about the ins and outs of their business. So I think that that would be a critical part in, you know, trying to make sure that you’re, you’re maximizing what you can get out of your lawyer, not just from a legal point of view, but also from a business point of view.

CHIP: Well, I think that’s a good point that, you know, building a relationship with all of your professional advisors, but lawyers in particular, I think there’s a benefit to working consistently with one. So, you know, my my advice always to folks is, you know, find a lawyer that you can build a relationship with, and as you say, work with over time, for two reasons. One is because you’ll get better advice, because they’re smarter about it. But the second is, it’ll be a more efficient process. You know, since you and I have worked together for so long Matt, you know, if I’m doing a deal or working on agreement, or something like that, you know, we can sort of shorthand some of the conversation, you know, what my risk tolerance is, and my general philosophy is on different things, I know what yours is. So, you know, we can get to the point faster than if I were working with a new lawyer for the first time. So I think there’s real benefit in building those kinds of professional relationships that will stand the test of time.

MATT: Yeah, I think you’re right. And I think that there are also things that you can talk through with your lawyer about how to get there, you know, each lawyer operates a little bit differently, you know, I enjoy when I can just grabbing a cup of coffee with a client, or maybe a lunch, not as a billing event, but really as an opportunity, did you sit down outside the, the structure of hourly billing or whatever, and just have a conversation about their business, you know, and just get to know them and their business a little bit better. And I think you can do your job better if you have that level of knowledge about kind of who they are, how they operate, where they’re looking to get with their business. And you can also, you know, try to find clever, maybe outside the box ways to work with your lawyer. For example, we’ve got some clients that we work with, that we do some hourly billing for, but also find different billing structures that we think may help us in the longer term, develop and maintain a relationship with that client.

CHIP: Yeah, and I think that’s particularly important, because, you know, many of us as folks who are hiring lawyers, or accountants, or whatever, we hear that clock ticking in our head every time we’re talking, in fact, you and I have joked about this periodically over the years, you know, I’ll sit there and say, Well, you know, I’m at minute nine, it’s time for me to jump off, I don’t want to get to that 10 minute increment or whatever. And, and so I think that as you’re… as you work with your legal counsel, and try to figure out whatever kind of billing arrangement it is, something where you’ve got a retainer relationship, where you have the opportunity to reach out and talk to that lawyer for advice, without being as concerned about, Oh, my God, am I running up my bill this month by doing this? I think that’s, first of all, it’s beneficial to you, the business owner, but I think, you know, there’s also value for your legal counsel, as they start to learn more about your business from the questions that you’re asking.

MATT: Yeah, we do have some clients with, with which we’ve got a kind of a retainer arrangement. And I think there’s, it works really well with certain clients with certain relationships. And by that, I mean, with a client with whom you’ve had an opportunity to work to see how much work they may need from you on a on a regular basis, there’s got to be communication, and a steady communication between the client and the lawyer about how the arrangement is working. But what I find it, it’s done for, for me with some of my clients has allowed an opportunity for the client to pick up the phone and not feel as though that clock is ticking with every call, or even have other people at the company feel as though they can tap into the legal resource and get some answers and get some guidance on certain things without having to feel as though their boss is going to see another, you know, legal bill for, you know, a couple hours of time. So if it’s set up the right way, I think maintained the right way, and evolves over time, it can be a great tool to allow the lawyer and the and the client to have a more kind of consistent and in depth relationship, set of discussions, so that the lawyer is better able to do his or her job and the client feels as though the relationship that they have and the services they get they get are better than they would otherwise.

CHIP: And ultimately, it’s better for the business if you’re reaching out on a regular basis and working with your lawyer on different issues. Because it’s it’s often easier to deal with something at the early stage of a business negotiation, or, or working on a document before a crisis or conflict comes up, as opposed to dealing with it later on down the road. And a lot of business owners that I know will say, Well, you know, I’ll let the other party’s legal counsel handle this, they’re a bigger company that, you know, they can eat that cost. And, you know, I’ll just kind of judge it on my own. That’s a pretty risky strategy, you’re much better off talking to your lawyer early in the process and making sure that, that they’re giving you good sound advice so that you don’t get bitten by that later.

MATT: So I think I think there’s actually two things here. One is yes, because you can avoid landmines, right, it’s always, generally speaking, less expensive to avoid a land mine than to try to pick up the pieces after you’ve stepped on one. That’s number one. Number two is what’s happened to me occasionally, in the retainer relationship – but even outside of that is hearing from a client, some commentary about a plan that they have with their business or something they’re looking to do, or some issue that’s come up, that they haven’t really even realized is a is a legal issue. You know, one that’s becoming increasingly common these days is, you know, how are my clients dealing with privacy policies and those kinds of things? And are they aware of some of the tightening that’s being done around privacy policy, laws, statutes, rules, regulations, not all of them are, some are more aware than others. But as we talk through with them, different issues, you know, they may not even realize that what they’re doing could be an issue. And then just in the course of having a discussion, we’re able to, you know, enlighten them a little bit, give them some education so that again, they can make better decisions going forward.

CHIP: Yeah, I would add to that, I think the the other area where, particularly in the the agency space, a lot of people aren’t aren’t thinking of things as legal issues when they should, and that’s employee and employment issues. And that’s an area where you can get into lots of trouble these days, if you’re not being very careful about what you’re doing, particularly as more agencies are using independent contractors, for example, and understanding what standards are being applied by different states, by different governing entities. And that’s something you need to be working with both your lawyer and accountant on. But there are also plenty of employment policies that you may have, that you may not even consider to be a legal issue. But if you start talking with your lawyer, they may say, Oh, hold on, you know, I just I heard you say that you want to reward employees this way? Well, you need to think about, you know what this means. Or they may say, I’m doing some hiring, and you realize they don’t know what questions they should or shouldn’t be asking in the interview process. These are all things that the more you talk with your lawyer, the safer you’ll be over the long term, which means hopefully, the bigger your business can become.

MATT: Yeah, along those same lines, there are in the world of employment law, and I’m not an employment lawyer, but I know enough to be dangerous, at least I know enough to, to figure out some of the questions to ask. But as you grow, there are just different thresholds for the number of employees you have to have before certain rules and regulations start to kick in. And if you’re just unaware that when you hire one more person, you may be subject to subject to some rule you weren’t even – you didn’t even know existed, you know, you could be creating a problem for yourself, just just because you you don’t know that there’s an issue there. So again, having that relationship with your attorneys generally aware about your business and how big you are and what your game plan is, should spark a discussion. And at least a question from the attorney about, hey, were you aware that, you know, if you add another couple of people, you should be thinking about, you know, implementing a new policy to address this issue, because once you get to a certain size, it is something you have to take into account.

CHIP: Now, the other area, where I think that a lot of lawyers can be helpful is the fact that they have typically pretty large networks, both of other professionals and clients and all that. So they can be very useful to you for things like market research, and networking. And when I say market research, I don’t mean disclosing confidential information about their clients, of course, but you know, they often are seeing a broad spectrum of the business space that you’re involved with. And they may be able to offer in those coffees or lunches or whatever, some insights for you that that go beyond the legal but help you better understand the environment in which you’re operating. They can make introductions, potential of potential folks that you can do business with, or other professionals that you might hire, whether that’s an accountant or whatever. And so I think you need to really make sure that you’re taking advantage of the networks that your lawyer has as well.

MATT: I think in this day and age of, you know, everything being online and being able to search online for whatever you think you may need, that personal connection, you know, from your lawyer to somebody else in his or her network, that may be able to provide a service you need, really shows should show that that person is at least you know, vetted, you know that the lawyer has worked with that person before, that person has a good reputation. And if you’ve got a good relationship with your lawyer, and you ask for somebody who can help us, a CPA or some other area of expertise, you can talk through what it is you’re looking for in that person. And the lawyer through his or her network can make a couple of suggestions about people you may want to call as a client. And, you know, see if you can get somebody who really fits the needs of the business and the stage that it’s in.

CHIP: And of course, your lawyer will also have lots of other good connections in the legal community. So you said you’re not an employment lawyer, I know that Cook, Little has an excellent employment law practice. I’ve taken advantage of that over the years myself. But you know, you would have not just the relationships within your own firm. But if there’s a particular specialized need that a client needs, you would know outside your firm, where to refer them as well, if they had something that was beyond the scope of what you guys could deliver.

MATT: Yes, so at Cook, Little, we are a business law firm. So there are certain things that we do well, and certain things that if we don’t feel we do them well we don’t touch. You know, estate planning would be one, divorce would be one, criminal defense would be one. But we’ve had clients who have had needs in all of those areas over time. And as they, as those needs arise, we’re not going to try to advise them on those things, because they’re just not in our wheelhouse. But we’ve got very good relationships with other lawyers and other firms, who we feel very comfortable referring our clients to knowing that they’re going to get good service from a good lawyer who can help them with a particular need that’s come up. And that can be important, you know that you know that. Not only is that person been vetted by your lawyer, but it’s somebody with whom your lawyer feels that he or she can work, which just means that if there are issues that come up that cross over the line from a divorce case, for example, back to the business, that the lawyer and the divorce lawyer, your business lawyer, your divorce lawyer can work together to kind of figure out what path would make the most sense. So the fact that they have a relationship can be helpful as well.

CHIP: Absolutely, and and most of these things, or many of these things, in the personal space, often do bleed over for the entrepreneur into the business world, whether that’s divorce or estate planning, or even God forbid, criminal law, you know, those are, those are things that can often have an impact on the business so that, you know, if there’s an existing relationship between those different lawyers and their law firms, or they understand each other, at least, you know, there’s real benefit there. But I think the other benefit, as you said, is that they’re essentially pre-vetted, because most of us are not working regularly with lawyers in some of those spaces. So if we need that expertise, it’s not like we’ve got someone already in our Rolodex. And so getting someone who’s a personal referral is a often a much better bet than just going to the the Yellow Pages, I guess, well, I guess nobody really goes to the Yellow Pages anymore. But googling, shall we say, to find the answer.

MATT: Keep in mind, that network does extend beyond lawyers who practice in areas where your lawyer or your lawyer’s law firm do not, you know, it can extend to while we mentioned CPAs, it can extend to investment bankers for a client that may be looking to sell a business, different kinds of business advisors, you know, maybe CFO type resources, you know, so the network should extend and does extend generally, you know, well beyond the legal world. And that’s why again, the lawyer can be a business advisor as much as a legal advisor, if you’ve got kind of the right business lawyer, help them look over your shoulder and, you know, deal with issues as they come up.

CHIP: And it can also expand beyond geography as well, because most law firms have certain jurisdictions which they’re particularly comfortable operating in, you know, they know the laws of particular states that their that their clients typically operate in. But if someone’s got, say, a specialized employment law need in Virginia, you know, you can refer them to someone who potentially would be a better fit for that particular challenge, then you might. So, and particularly as businesses and agencies, in particular, are becoming more geographically dispersed, this is something that a lot of agencies need to deal with.

MATT: Yeah, that’s right, and it doesn’t necessarily mean you need a big national law firm, either who has an office in each of the 50 states, you know, firms like ours, are part of members of affiliations of law firms that spread both nationally and internationally. So if an issue does come up in a state where we don’t operate, and don’t have expertise, we’re able to through our our affiliation with tag law, find a qualified firm in that state. So not only may we have a personal relationship with a lawyer in the other state, but we may also be able to tap into our law firm affiliations, to find a firm that will meet the needs of the client in that particular area.

CHIP: And so, you know, as we run towards the end of our time here, you know, if you were if you were going to advise someone on how to find a lawyer that that really meets their need, I mean, would you encourage them to interview a number of different lawyers and law firms before they get started? Rely mostly on personal referrals? What, what do you think is the best way for someone to find that best match that we were talking about earlier?

MATT: You just mentioned, you know, don’t feel as though the first lawyer that you talked to is necessarily going to be the right one, sometimes it is. But you shouldn’t be shy about, you know, talking to more than one. And, you know, we have found that, you know, that we tend to have better relationships with those that are referred to us from people that know us. So that personal referral from somebody else, you know, maybe another business owner, maybe your CPA, who happens to know a lawyer that they think would fit with what you need, fit your personality, fit your kind of business profile is important. And then once you get in front of those lawyers, you know, trying to make judgments about whether or not that person has the experience that you think you’re going to need, whether that lawyer has kind of the educational background that you think you’re going to need, from law school, or maybe business school and other places, and whether or not, you know, that lawyer has the judgment that you think you’re going to need to help you make decisions going forward. That can be a hard thing to assess and address, but can be really important down the road. That’s part of what you pay for when you go to your business lawyers to help you make decisions, taking into account everything that you think is relevant. But that judgment can be important, and that judgment can be, you know, educated by the expertise and background of the lawyer. So asking some questions, maybe running through some scenarios, asking about, you know, prior prior transactions and deals, talking to others that have used that same lawyer are all good ways to try to find what for you would be the right match.

CHIP: Well, I think that’s, I think you’ve touched on something really important there. And that is to understand the background of the lawyer that you’re going hire. So, you know, it may be as you say, education related, you obviously have a business education, in addition to your your legal one, which I think is beneficial. But you want to be thinking about the kinds of clients that that lawyer typically works with. I mean, you know, Uncle Joe may be a fantastic personal lawyer for you, you know, maybe does some general Family Law, those sorts of things, but maybe not the best fit when you’re looking to have an attorney for your agency. These are the kinds of things that you want to explore with them and make sure that they know generally about the kind of business that you’re running. You know, if you’re an agency, you’re running a professional services business, you want to make sure that your attorney has experience in that space. And you know, doesn’t deal just with, say, tech startups or with manufacturing firms or things like that, where they may not know, the terminology and the challenges and all that. So the more you can understand about the background, the better you’ll get both the legal advisor as well as a business advisor.

MATT: And I think that’s part of why that experience can be so important. Do they know the lingo, do they know some of the other players? Do they know the issues that commonly come up in those kinds of businesses? And what are some of the effective ways to deal with those issues? So there’ll be more more efficiency and more effectiveness if you you’re using a lawyer who’s got maybe not broad experience in a variety of different areas of law, but rather somebody who is maybe more focused on the particular issues that you need help on in the particular industry in which you’re involved.

CHIP: Well, Matt, this has been a fantastic conversation, I think we’ve given or you’ve given in particular, a lot of good insight for the agency owners who are listening. If someone would like to learn more about you or follow you online, where can they find you and your firm?

MATT: The easiest would be to go to our website, www.clrm.com. The name of the law firm Cook, Little, Rosenblatt & Manson. But people normally can track us down just to Cook Little. We’re based in New Hampshire. So if there’s anything else that comes up other questions, I’d be happy to chat.

CHIP: And of course, none of this has been legal advice today, so..

MATT: That’s right. I appreciate the disclaimer.

CHIP: Matt didn’t give a disclaimer, so I will do it. So thanks again, Matt, for joining me. Thank you all for listening again. My guest today has been Matt Benson of Cook Little in Manchester, New Hampshire.

MATT: Thanks very much, Chip.

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