• What does a business attorney do anyways?
• Why should I retain your firm for my legal needs?
• What are the legal challenges in today's business environment?
• What do you charge for legal services?
• How should I choose the best legal specialist?
• Do the large firms have better legal specialists?
• Do the large firms have better resources?
• Are you saying not to hire a large firm?
• What are some red flags I should watch for as a client?
• What qualities should I look for in a business attorney?
• What is an attorney's general role?
• What is an attorney's role in business transactions?
• What is an attorney's responsibility when providing fraud and abuse advice?

What does a business attorney do anyways?

With an understanding of the laws affecting business operations, a competent business attorney will steer you away from behavior that may increase your regulatory and litigation risk. A better business attorney will be able to negotiate, draft and more or less guide you through business transactions and important business decisions. An exceptional business attorney will understand your goals and objectives, will help you explore options, will anticipate future opportunities and obstacles and will assist you in making fully-informed strategic business decisions.

Why should I retain your firm for my legal needs?

Assuming that we have the expertise you need, we will approach your matter with honesty, integrity, and service excellence! We make this bold commitment after working with many of the finest attorneys from the nation's most prestigious law firms. Our experience is also shaped by the many talented executives and professionals we have had the pleasure of serving in various general business sectors. From this perspective, we know how the game is strategically played at the highest corporate levels, but we also understand the unique needs of the entrepreneur and the mid-sized business in today's challenging environment.

In summary:

1. Our goal is to help you make excellent business decisions and avoid bad ones, not to squeeze you out of every dollar in your legal budget.
2. We approach issues and develop solutions with an understanding of your industry and your needs.
3. We have the ability to communicate as non-attorneys. We believe that good communication makes the complicated seem simple, not the other way around!
4. We will collaborate with you and your management team until a solution is implemented.
5. We are acutely aware of the tremendous costs of regulatory compliance failures and of resolving lawsuits. With that in mind, we give advice with significant future value.
6. We explore and explain the viability of various alternatives. This process empowers you to make future decisions with confidence.

What are the legal challenges in today's business environment?

Legal challenges parallel business challenges -- competition is increasingly global, labor costs are skyrocketing, new opportunities are short-lived, investment capital is limited, margins are steadily shrinking and a single liability lawsuit can be financially devastating. And as anyone who has lived through a business dispute in the last decade will attest, the personal and transaction costs of a dispute fought in litigation or arbitration are astronomical.

For those of you who attempt to remain “compliant” in your business activities, you know that the laws and regulations applicable to your business are numerous and increase every year. We have entered an era where private lawsuits, class-action lawsuits, government lawsuits, congressional investigations and constant media scrutiny of business ethics are commonplace.

The federal government and its numerous agencies – not to mention state government agencies - have not been shy about their intent to aggressively pursue white collar criminals and civil wrongdoing in every business sector. The risk of civil and criminal penalties has become a reality for many, even when they thought they were behaving legally and ethically.

With these challenges, where an ill-informed decision or an ill-advised agreement carries tremendous significance, it is more important than ever to get good counsel from your attorneys and professional advisors!

What do you charge for legal services?

Our rates are extremely competitive and based on a number of factors, including the scope and complexity of your project. The most common compensation methodology for business legal services at our firm and throughout the industry is the hourly rate. There may be circumstances, however, where a flat project rate would be appropriate. And at all times, if we believe that another firm is better suited to handle your matter, we will not hesitate to refer you to some of the best specialist attorneys and firms around.

Because many of our clients have benefited from our continued services, we have created the Counsel on Retainer Program™ to provide these services more efficiently. The sophisticated business person knows that there are two important variables in the eventual bill based on hourly rates -- the rate and the number of hours -- and the time variable may be difficult to track or control. Thus, we would also be happy to stay involved in referred cases as a truly objective advisor and overseer of your legal expenditures.

As for overall value, we believe that you will pay less and receive more reliable advice from us than from any other firm.

How should I choose the best legal specialist?

The short answer is that it will take some investigation, similar to your quest to identify other qualified professionals. For example, when you are in need of a medical specialist, you search for candidates who use the most advanced techniques and deliver the best outcomes. You would question whether the professional was experienced in the specific procedure you are contemplating, was knowledgeable enough to discuss the alternative treatments and could produce numerous references from his/her patients.

As with the “practice of medicine,” the “practice of law” has become extremely sub-specialized in the past century. The difference is that attorneys obtain the same state license when they pass the bar exam and are generally free to proclaim whatever specialty they choose, with no additional internship, licensing or certification requirements.

Do the large firms have better legal specialists?

While many excellent attorneys practice at large firms, we do not believe that this is a good assumption. And it is no more logical than hiring a medical specialist from a large medical group based on a similar assumption of medical quality.

To see why this is a poor assumption, let's glance inside the operations of many large law firms. Because of the significant starting salaries, many large firms attract (1) the academically successful law school students and (2) the students who managed to attend top-tier law schools. These attorneys work on delegated projects and are annually rewarded for their total billable hours recorded. If an attorney sustains a significant billable hour performance (relative to other firm attorneys) for 8 to 10 years, the firm may “reward” that attorney by allowing them to buy into the firm's partnership.

So when you hire an attorney (or even a “partner”) at many large firms, you are almost guaranteed to get an attorney who was academically successful in school and who has found a way to invoice a lot of hours. You are not guaranteed to get a highly-skilled attorney or an attorney with the necessary experience or expertise to handle your matter. Thus, rather than looking at the size of a law firm, we would recommend that you ascertain whether the attorneys dedicated to your matter have a high level of integrity and possess the requisite experience and expertise.

One more insider tip. Many attorneys at large law firms pump up their resumes by using their “relationships“ to get appointed to boards, by paying for articles to be written about them and by creating awards that are sponsored by their firms or voted-on by their colleagues. And if you think many of these lawyers actually research and write the various articles they credit themselves with (as opposed to their employed associates), I have some prime swampland in Florida that's for sale.

Do the large firms have better resources?

In the old days, the big firms could spread certain fixed costs (such as the cost of the legal library, non-attorney personnel, rent and database information) over a larger number of attorneys.

From a cost standpoint, we believe that the economies of scale of the larger firms have almost evaporated with the growth of communications technology, access to information and subcontracted legal services. Many of these outside support companies are faster, better and less expensive than employees working in word processing, document production, and trial preparation. And with instant access to information, including contract forms, case reports and legal research materials, the playing field has practically leveled.

Today, the real benefit to the large firm is a revenue one. This is why many firms have "merged" in the last decade. With the ability to market that the firm's expertise spans a large number of subject areas, the firm can cross-refer matters to other firm attorneys.

Are you saying not to hire a large law firm?

Not at all! There may be circumstances where the best legal specialist resides in a large firm or your matter calls for an army of attorneys to handle a myriad of issues. We believe that there are many excellent and ethical attorneys working at large firms. As stated above, if your matter calls for it, we will not hesitate to refer you to some of the best specialist attorneys in the industry, regardless of firm size.

But please, do not make the mistake of believing that you have retained a good attorney because their letterhead has a lot of cities and they charge you $500 per hour.

What are some red flags I should watch for as a client?

Another one of our pet peaves is the poor service delivered by most firms. You have probably heard attorneys talk about the “art” of practicing law. In our experience, too many attorneys dwell on the “art” and ignore the fact that it is also a service business. Let's face it, if you are like most, you have become accustomed to poor legal service and view attorneys as a necessary nuisance rather than a valuable team member and decision making resource. This is a shame! In addition to being unresponsive and inefficient, substandard legal service reveals itself in many ways. See if any of these ring a bell:

• Your attorney seems to care more about accumulating hours and using every available discovery tactic than working to resolve the dispute.
• Your attorney is willing to conduct comprehensive research on every issue and make any argument as long as it is supported by a shred of fact.
• Your attorney behaves as if every term in every document is vital and potentially a deal breaker when negotiating a transaction.
• Your attorney speaks and writes in some foreign legal tongue, making even the simplest matters appear complicated.
• Your attorney always pushes the ethical envelope under the guise of “creativity.” Please note that this same attorney will bill you with the same “creativity.”
• Your attorney gives regulatory advice that amounts to telling you what you want to hear without asking additional questions. Please note that this same attorney will regurgitate bad advice they have given other clients and then develop amnesia when the result of their advice is scrutinized by the courts or regulators.
• Your attorney takes no interest in whether you implement the advice and vanishes after you pay the final invoice.

Believe it or not, poor legal service is so prevalent that you may not recognize it. Has your attorney delivered written advice and documents that are long, use a lot of big words and footnote a lot of laws, but in the end make you feel like you need a decoder ring to understand them?

Unfortunately, these service failures are all too common in the legal world. The real bad news, however, is that poor performance will eventually cost you more than the firm's inflated bill. If you can't understand your attorney or the written documents, do you think your staff or the opposing party will when attempting to implement the terms? And more importantly, do you think the regulators or the courts will have any clue about the parties' intentions?

What qualities should I look for in a business attorney?

Based on Hollywood's portrayal of attorneys, you might think that a good attorney wears expensive suits, has an aggressive personality (“I will fight for you”), lives life a little recklessly and thoroughly enjoys arguing! If so, you may be surprised to hear that many experienced attorneys loathe these qualities and know that this type of attorney is a barrier to both problem solving and appropriate client advocacy.

Having an attorney you can trust is invaluable. And if that attorney has the necessary expertise to handle your matter, we would recommend that you maintain that very important relationship without reservation. In other cases, because it is often difficult to determine who is really qualified to give you legal advice and by what standards you should judge an attorney's performance, we offer the following positive qualities for your consideration:

1. Integrity. Since everyone claims to have integrity, it is often difficult to verify. We offer a couple suggestions. First, as part of your due diligence prior to an attorney engagement, you may want to seek referrals and review the attorney's written positions on certain subjects. If written positions are not available, ask some tough questions. Second, after you retain the attorney, you need to watch for some dangerous behaviors. An attorney who is willing to push the ethical envelope for you is not doing you any favors in the long run.
2. Specialized Expertise. A logical extension of professional ethics and integrity is the attorney's realistic understanding of what they know and, more importantly, what they don't know about certain practice areas. An attorney should not pretend to have the expertise to handle your family law issues and your business transactions and then handle the defense of your liability lawsuit. Would you go to your dentist for an elective knee surgery or to your orthopedic surgeon for a cardiac procedure?
3. Business Experience. It almost goes without saying that your business attorney needs to understand the various categories of “business law.” But they should also understand business--the strategic business decision making process and the overall basics of finance, budgeting, marketing, management and operations to even begin to give you advice that will assist you in developing solutions. How can you tell whether the attorney is business savvy? Talk to them about some of your latest non-legal challenges. Ask questions. Is the attorney responsive? Does the attorney speak your language or speak in “legalese”? Does the attorney give you advice via one-inch thick rambling memoranda with 50 case citations and footnotes, leaving you to figure out how to implement everything? Do you feel like you are educating your attorney about business and then paying $500 per hour to get your words into a formal-looking document?
4. Analytical Thinking Ability. While a basic understanding of business and business law is important, nothing can replace the ability to quickly process information and think logically when given a set of facts. In addition, the ability to think around corners and prepare for potential outcomes is one of the reasons why many seasoned business people involve their attorney in every significant decision.
5. Oral Communication Skills. This is the skill that you will first recognize and remember about your interaction with your attorney. Most attorneys believe they possess superb oral communication skills, especially the ability to persuade you that they are competent or persuade a judge/jury in the courtroom. There is certainly more to oral communication skills than “persuasion” and since less than 1% of civil disputes find their way into the courtroom, persuasion is not nearly as important as the ability to convey information clearly.
6. Written Communication Skills. Attorneys have performed so poorly in this area that many business people don't even bother to read things drafted by attorneys, whether correspondence, court documents or contracts. Legal writing is so pitiful that the government has been forced to pass laws that certain documents and agreements are written in “plain English.” Your attorney should write clearly, unambiguously and efficiently. An attorney who can't write is about as valuable as a microsurgeon with shaky hands.
7. Organization Skills. Some matters are relatively simple and contain fairly soft deadlines. The bulk of legal matters, in our experience, have numerous individuals involved, important deadlines, and various complicated documents. In these situations, you may need your attorney to orchestrate these variables, prioritize their importance and ensure that nothing is overlooked. An attorney lacking organization skills will miss opportunities and add to your workload.
8. A “Big Picture” Regulatory Understanding. There are very few decisions you make as a business person that do not have some sort of regulatory impact, either now or down the road. In this environment, you need an attorney who has a deep understanding of the laws and the legislative intent. Your attorney should also understand the applicable regulations and the thinking of the regulators.
9. Cross-functional Experience. Sure. You need an experienced litigator if you are pursuing or defending a civil action in court. You also need an experienced white-collar criminal attorney to defend a prosecution for fraud. What may not be as obvious is the need for a transaction attorney to understand how contracts will be interpreted if there is a dispute and whether the regulatory issues have been handled appropriately. Attorneys with this cross-functional approach make sure the language is absolutely clear, unambiguous, comprehensive and completely understood by the parties prior to signing. They also spend time educating the client about the prospective litigation and regulatory risk.
10. A Service-Oriented Approach. The practice of law is a “profession” and a service business. Historically, many attorneys and law firms have not focused on the service part or do not have the business acumen to understand its importance. With the increasing use of communication technology, e-mail, the internet, alternative dispute resolution, legal do-it-yourself products and access to information about attorneys and law firms, attorneys will continue to feel the pressure of competition and will be required to improve in this area.

What is an attorney's general role?

Regardless of the type of matter, the essence of an attorney's “legal services” is taking facts, applying them to the applicable law and then delivering advice. The prudent client assimilates that legal advice with other information prior to making a fully-informed business decision.

The better the facts and the better the attorney understands the applicable laws (and how they will be interpreted by the regulating authorities and the courts) the better the legal advice. That said, it is our philosophy to gather all of the available facts, to expose missing facts and then to give you advice with legally appropriate options.

When receiving advice from your attorney, we caution you of the following attorney behavior, which could create more legal exposure in the long run:

• Attorneys who engage in “solution-driven” collaboration when an issue implicates fraud laws.
• Attorneys who pride themselves on their ability to find “creative” justifications for a desired transaction.
• Attorneys who are willing to “paper over” undesirable facts.
• Attorneys who seek to be “business partners” and forget about their role as the attorney.

These behaviors are very dangerous in today's regulated business environment and even more dangerous in the healthcare industry. If an attorney is not acting as an “attorney” in the relationship, the attorney/client privilege does not exist, the “advice of counsel defense” will be compromised and the attorney's professional liability insurance may not apply!

What is an attorney's role in business transactions?

Much of your interaction with a business attorney will come in connection with oral or written contractual agreements. The initial interaction may be to discuss a potential arrangement or to discuss a problem with a party's performance under an existing contract. And if you retain a business attorney to be involved in negotiating and drafting a new written agreement, there is a real opportunity for the attorney to provide present and future value.

1. It is our philosophy to ensure that all of the parties' issues are clearly set forth in the written contract and the terms do not violate applicable law. We believe that it is wholly unethical to purposefully draft vague language or hide an important matter in a non-related provision or in the small print.
2. It is our philosophy to ensure that the client's business objectives are clearly, plainly and unambiguously reflected in the contract language. While most attorneys will state that they share in this objective, why then are most contracts drafted by these attorneys riddled with archaisms, redundancies and unnecessary language? In fact, you may believe that contracts are meant only to be understood by attorneys and that “legalese” is a language attorneys are taught in law school. Nothing could be further from the truth.
3. It is our philosophy to ensure that the contract language is sufficiently clear to avoid any unnecessary disputes and contains streamlined conflict resolution procedures. Because of the significant costs of pursuing a dispute through litigation or arbitration, this is where an experienced business attorney can provide significant future value. In order to do so, the attorney needs to understand business operations, your specific industry, your contracting party's business and the nature of the transaction. The attorney also must have the ability to predict future problems. (As an example, imagine the resources that have been expended by both the City of Anaheim and the Angels baseball organization over the contractually required use of the “Anaheim” name, which could have been avoided with clearer contract language.)
4. It is our philosophy to ensure that the contract provides reasonable options for the client if the contract goes awry. For example, if the contract contains reasonable termination options, the damages can be limited to that stated time frame. In addition, most contracts should contain an informal dispute resolution process and then a clear and unambiguous formal dispute resolution process. Again, due to the enormous costs of dispute resolution, an experienced business attorney can provide significant future value in this area.
5. It is our philosophy to encourage the client to conduct due diligence on the contracting party and to carefully consider the risks of contracting with them in the first place. It is sometimes wise to avoid a potentially bad contractual relationship rather than to extract yourself from it. Giving this advice, however, is not very financially lucrative for the attorney, but it is the right thing to do.

What is an attorney's responsibility when providing fraud and abuse advice?

If your business is regulated, you have probably retained attorneys for advice ranging from licensing to contracting to general regulatory issues. With the increasing civil and criminal enforcement, not to mention the ramifications of losing your status as a government contractor, it is important for you to understand your attorney's responsibility and the value of competent legal advice.

Since the answer to this question could fill volumes, the following is a brief summary of key points. (We use the health care industry as a primary example.)

• Overview. First and foremost, an attorney should not represent that he/she is capable of giving healthcare fraud and abuse advice without a depth of knowledge and experience in giving advice on these matters. The attorney also needs to understand the healthcare business and have a vast working knowledge of the contemplated arrangement. In those areas where the government authorities have not yet plunged (such as managed care provider fraud), the attorney needs to understand the likely application of the various laws and give you advice that offers present and future value.
• Bad Advice. We have seen many articles in legal publications concluding that bad advice (from any professional) will not insulate the client from legal exposure. In connection with this fact, we believe that one of the biggest misperceptions in the healthcare world is the business person's belief that having an attorney look at something magically gives it a stamp of “approval” or insulates the business person from scrutiny.

Your remedy for bad (or incomplete) advice is a malpractice lawsuit against your attorney. In a lawsuit against your attorney for malpractice, the professional insurance carrier may turn to the “fraud” coverage carve-out and argue that the attorney's advice is not covered under the policy. When the smoke clears, this is what you may be left with (1) a potentially illegal arrangement, (2) an arrangement that no ethical attorney will touch in the future for fear of criminal liability and (3) a lawsuit against your attorney. When the arrangement is eventually questioned by the authorities, the advice-of counsel “defense” will be compromised and the authorities may conclude that the attorney was acting as an accomplice or co-conspirator in the fraud. If the authorities charge the attorney, the attorney will act in his/her own best interest rather than yours.

• Dynamic Legal Environment. The healthcare fraud and abuse laws are numerous and dynamic. To protect companies and individuals who make a good faith attempt to comply, various government agencies provide constant interpretive guidance. In addition to decisions from the various federal courts and appeals courts, there is a plethora of information regarding the government's stated and probable positions on almost every type of arrangement. If that is not enough, a healthcare company can submit a proposed arrangement directly to the Office of Inspector General for an advisory opinion. What are some of the lessons in all of this? One lesson is that an attorney practicing in this area had better find a way to stay very current on the laws and their interpretation. Another lesson is that the government's investigative agencies and attorneys have no reason to be sympathetic to non-compliant individuals and arrangements.
• Fact Inquiry. An attorney's opinion on any subject is limited by the facts they have been given by the company. If the attorney has knowledge of certain additional facts (such as the underlying business motivations, the people involved, the parties' history, the company's culture, etc.), they cannot ignore these facts when giving an opinion. We believe that the attorney with this outside knowledge has an obligation to ask for additional information and verification of certain facts. If management's course of action is inappropriate, it can be stopped at this stage. If management's course of action is appropriate, the additional documentation and verification will assist management in the future. If management's course of action is potentially problematic, management will be in a better position to understand the risks inherent in the transaction when making a fully-informed decision.
• Inside Counsel. Because healthcare is such a highly regulated industry, most larger healthcare companies have hired attorneys to work as company employees reporting to a “General Counsel.” Much has been written and discussed about the General Counsel's conflict of interest when he/she is responsible for “compliance” matters and, at the same time, responsible for and rewarded by the financial performance of the company. Because of this conflict, many companies have created a separate and independent Chief Compliance Officer role that reports directly to the company's board of directors.

Unfortunately, this is just one of many steps that needs to be taken to minimize the conflict of interest and to mitigate fraud and abuse compliance problems. In our opinion, it does absolutely nothing to solve the problems if the remaining employed attorneys are still responsible in some degree for reviewing arrangements for compliance purposes. In other words, for this fix to be meaningful, the separation needs to not just occur with the General Counsel/Chief Compliance Officer, but with every single employed attorney!

That said, the inside counsel has a very important and difficult role when giving advice on fraud and abuse compliance. In comparison to outside counsel, they are in a position to know a lot more facts, to know the history of the individuals asking the questions and to know the additional questions that need to be answered in order to give comprehensive advice.

At the same time, as company employees, they are more closely connected with management and will have a continuous working relationship. Thus, saying “no” or asking these additional questions or requiring additional documentation or attempting to steer management from dangerous behavior may be met with considerable resistance and complaints. Especially if management has been empowered to believe it can get a “better” legal opinion from outside counsel (also mistakenly referred to as “approval” from outside counsel), even if that opinion comes with ten pages of conditions and limitations at the end of the opinion, which nobody reads.

If the General Counsel appears to be aligned more with management than the attorneys, management will continue to see their employed fraud and abuse attorneys as roadblocks if they refuse to find a way to get a deal done or are unwilling to “paper-over” problems.

Some companies even escalate this conflict dynamic by forwarding attorneys' complaints about management's compliance behavior to the specific managers. Or worse yet, they put management in a position to evaluate the “performance” of these attorneys! All in all, while the inside attorneys are in the best position to give thorough advice and expose problems to senior management, it is almost impossible to do so without total insulation and employment protection.

• Other Compliance Improvement Barriers. The following represent other barriers to true compliance improvement:

1. If the General Counsel retains any oversight responsibility or reporting authority for compliance performance;
2. If the General Counsel does not have a working knowledge (or is disinterested) in the underlying company operations or the cause of past compliance problems;
3. If the General Counsel does not have an understanding of the fraud and abuse laws, including the “one-purpose” test under the Antikickback Statute;
4. If the General Counsel believes (or worse yet has stated to the authorities) that there are no outstanding compliance problems;
5. If the General Counsel apologizes to management about the company's compliance policies and procedures, thereby minimizing their importance;
6. If the General Counsel and senior management pressure the attorneys not to be better attorneys, but to be better “business partners” and more “creative” in their analysis;
7. If the General Counsel tells management that he will be changing the legal culture by approving arrangements more quickly and removing a “no” culture;
8. If the company bases or increases attorney compensation according to the financial performance of the company;
9. If the General Counsel does not strive to educate management about the applicable law and the government's remedies; and
10. If the General Counsel and the attorneys believe that the company will obtain a settlement and release for past behavior and transactions (i.e., a "clean slate").

• Outside Counsel. For those companies that do not have inside counsel, the outside attorney's responsibility when providing healthcare fraud and abuse advice is relatively clear – obtain as many facts as possible and then deliver comprehensive advice on the suggested course of action and any alternatives. As with inside counsel, it is the outside counsel's responsibility to ask additional questions and obtain verification of certain stated facts. Moreover, outside counsel may also have an understanding of the company's objectives and culture, which would necessitate further inquiry. If outside counsel knows that management is simply seeking a stamp of approval or has already engaged in the activity or is withholding facts, we believe it is the attorney's responsibility to share this with senior management and the company's board and/or refuse the engagement.
• Professional Responsibility. If, after rendering advice, an outside law firm believes that management intends to engage in inappropriate or illegal behavior, they are obligated to share it with senior management (or the board if the action is supported by senior management). The failure to do so reflects a misunderstanding of who the “client” really is when hired by a company. The same goes for an inside attorney, although this information may be suppressed or given cursory treatment as it makes its way through the reporting layers. And unless the conflict insulation steps described above have been taken and management is serious about fraud and abuse compliance, that attorney will probably be committing career suicide by raising concerns in the first place.