How Can Lawyers Think Strategically?

Behind every great deal is a lawyer advising against it

This is one of the lawyer jokes, which clearly illustrates the common perception about lawyers. Unfortunately, many will agree that the above statement is true and will complain about lawyer’s lack of business judgment and ability to think and work strategically.

For every lawyer, the day-to-day challenge is to change such perception. Lawyers should stop telling their clients that they cannot do something without offering alternative legal ways to achieve their client’s business objective. Lawyers should work hard in transforming themselves from being viewed as show-stoppers and blockers to the business into being a trusted adviser and business facilitators.

A successful lawyer will continuously thrive to acquire a lot of knowledge beyond the law and will try to have a true understanding of the business of their client, the bigger picture beyond the given transaction and the goals behind the client’s request.

Therefore, before lawyers attempt to advise their client, they will need to understand the industry, the business and risk model, the market forces, the client’s market share, client’s competitors, major customers and suppliers, the value of the deal in question, client’s business strategy and vision.

This bigger picture will enable lawyers to not only advise on how to solve a legal issue, but how to approach the issue and handle it in line with the client’s overall company’s business strategy and taking into consideration the client’s bargaining power and position within the market. Often times, lawyers tend to jump into knowing the details of the transaction without seeing the bigger picture, this is why many lawyers lack the vision of how can their legal advice affect the business.

That been said, in addition to the big picture, lawyers should of course still dig deeper and understand the details of the transaction in question, they will need to know what is the nature of the transaction, whether there is import/export involved or whether the deal is completely local (this will give a hint whether export control regulations are applicable and whether there is a need to explicitly exclude application of UNISG), the risks involved and whether such risk can be limited.

For example, in a breach of contract situation, a typical lawyer may recommend suing the other party, but a strategic lawyer would contemplate the underlying business relationship and whether jeopardizing that relationship would hinder the company’s ability to do business or affect the company’s market position.

A traditional lawyer’s approach is to exclude all risk or minimizing risks, but a strategic lawyer would rather first understand how much risk the business is willing to accept and think of ways to mitigate those risks rather than completely excluding them.

A strategic lawyer will have a vision and would think of cross-licensing as a more efficient, cost and time saving option rather than patent litigation. On the other hand, strategic lawyer will go for litigation and will not consider settlement regardless of cost and time if such litigation would set a precedent that can negatively affect the business in the future.

To conclude, the ultimate factor that determines a lawyer’s success is their ability to re-brand themselves from just being technicians (merely stating what the law is on a particular matter) into being business partners where their advice actually serves and enhances the business and help the business gain competitive advantage.