Lawyers often ask me about the principles or practices that I use to train my teams or coach my clients. While there are many powerful principles that I have had the good fortune to have been taught over my legal career, the most useful has always been the ability to explain great lawyering and deliver it to an organization. The following three principles form the foundation for my legal practice. I hope they prove useful to you and spark a conversation or introspection about what you are already doing or what you want to change.
What is great lawyering or compliance work? Let's start with what is bad lawyering. Bad lawyering is answering the client’s question incorrectly. Mediocre lawyering is answering the client's question correctly. A lot of lawyers can answer questions correctly, so you really won’t distinguish yourself from your peers if that is where you land. Great lawyering (or compliance work) starts with asking the client "What are you trying to do and why are you trying to do it?” or "What's important about that outcome." Once you know the answer, you can chart a path to the desired outcome and figure out how to get from “here” to “there.” Most lawyers don’t spend the time or the energy to ask the question, and without it they can’t be great. Some don’t ask because they want to answer a client’s question as quickly as possible and move on to the “next thing.” Some don’t see themselves as needing to know about the business to be successful and relevant. Both risk the business not valuing their input or not asking in the first place. This first principle sets the foundation for the next two.
So, if you ask “what are you doing” and “why,” what do you do next? You always get to “Yes.”
When the client explains to you what they are trying to do, always say "Yes." Sometimes it's "Yes, AND." Such as:
A) Yes AND I can do this cheaper and easier; or
B) Yes, AND that's not allowed and the first thing we need to do is get a law changed and we might need to meet with some trade groups, or a lobbyist; or
C) Yes, AND I think the risk/reward is not great here and we should elevate this; or
D) Yes, AND we are all going to jail and I can't go to jail because [Insert your funny line here, like "I never share bathrooms"].
Answer C should be carefully considered/elevated and strategically decided. D is obviously a “NO.” And when you couch the obvious "NO" with a "YES" you are ensuring that the business partner is invested in the outcome of the decision and they likely won't risk their own future. If they still say "go" when you tell them everyone is going to wear stripes and get free healthcare for life, elevate the issue. You don’t want to be on the front page for that reason. When considering your type of "yes," and how you deliver it, you must consider point 3 below.
What kind of "Yes, AND" answer you give depends in part on the risk/reward ratio. Risk is an important part of business, you can't succeed in business without taking risk. Effective risk taking requires an understanding of both the risk and the reward. Try to capture both the likely risk (not the worst case scenario) and the likely reward (not the best case scenario, the likely scenario) and compare them using math. You might be a Political Science major (guilty) and you still need to master simple math to engage your client where they are.
Would you risk $1 Million dollars to make $1 Billion dollars? Of course you would. And what are the chances of that happening? What if the chance of making the $1 Billion dollar mark was only 1/10? Would you then risk $1 Million to make $100 Million dollars? Probably. What if the risk were $1 Million dollars to make $1.1 Million dollars? Why would you take that risk? Use math. Quantify the risk, if at all possible (e.g. what is the $ amount of liability to the Company if this risk actually occurs?).
Dig in, understand the likelihood of the risk and the likelihood of the reward as you get to "yes." Do not get hung up on hypothetical or academic risks (e.g. a “run on the banks”). Look for ways to mitigate risk (through contractual clauses, changing how services are provided, insurance, etc.). Make sure the business is making an informed choice about risk by helping your business partners escalate risk awareness appropriately.
Finally, watch out for existential risk. Sure, the ratio of risk/reward might be amazing, but are you putting the very existence of the company at risk? If something is legal, is it ethical? These types of existential risk/reward decisions are rarely wise and at the very least require the highest levels of knowing approval. If the risks involve ethical concerns or any potential violation of law, make sure to escalate to your supervisor, the General Counsel, the CEO and the Board of Directors, in that order.
The bottom line here is, if you get a bad outcome, will you and your CEO/client consider this decision a mistake? The answer should be NO. You’ve looked at the upside and downside. You’ve measured everything as well as you can with the time, resources, and information that are reasonably available. You’ve done all you reasonably can do to control or mitigate the risk. Based on all of that, this decision is the best course of action now. If the answer is “YES, this will be a bad decision if it does not go well,” then you are not making a good decision based on what you know and can control. You are rolling the dice and hoping for a good outcome.