by Tom Mason

We’re living in a do-it-yourself age. That is particularly true when talking about legal issues. Corporations have plenty of choices these days when it comes to legal advice: paralegals and professional mediators, even estate-planning insurance agents can provide some level of legal information service to a company or businessperson. All of these professionals are well-qualified and well-trained at what they do. Add to that a whole industry of legal software, books, websites and other information sources; some budget-conscious corporate executives may be tempted to cut corners and avoid hiring a lawyer altogether. That can be a major mistake.

How can a corporate lawyer help a company grow more profitably in this day and age? The answer is complicated. To get to the bottom of it, I put the question to legal professionals at a number of Atlantic Canadian firms. Here are the top nine answers I came up with:

A lawyer can bring a wealth of experience to the table

Lawrence Stordy is an attorney with Scales. He says that a lawyer can be exactly what a small or a medium-sized business needs to get an edge on the competition. “Many corporate clients are small to medium businesses that do not have a broad exposure to other types of businesses or organizations. As corporate lawyers, we deal with hundreds of small and medium sized companies and draw from our experience from the various business sectors to give feedback and advice to our clients to which they might not otherwise have access.”

A lawyer can help clients to understand the regulatory environment in which their businesses operates.

Almost every business comes with its own particular minefield of rules and regulations. Business regulations in Atlantic Canada run the gamut from exactly who is allowed to open on Sunday to the kind of safety training employees must have. New federal privacy regulations introduced this year have wide-reaching affects on how corporations use client information. Corporate executives are legally bound to certain behaviors that may not be immediately apparent or obvious. It is virtually impossible for businesses to foresee all of the vagaries of the regulatory process when planning for growth. Bringing an attorney in on the planning process can avoid costly mistakes in the future. “We provide strategic planning to keep our clients out of trouble and give them access to the latest developments in the law, whether it be privacy legislation, legislation respecting Sunday shopping and changes to tax legislation,” says Stordy.

A lawyer can determine whether expansion is appropriate given the current life cycle of the business.

Every business operates within a life cycle. Expanding at the wrong time during that cycle can be a recipe for disaster. A good corporate lawyer should understand the cycles in which a corporation operates and be able to offer advice based on that knowledge.

A lawyer can help a corporation with the growth-planning process

A lot of successful companies fall flat when they decide to take the next step and grow, says Bryce Morrison, an attorney with Boyne Clarke in Halifax. “In my experience, business grows when it is prepared and when it is flexible. The business must look ahead and anticipate issues or developments that will arise in the future and plan for them today.  From a legal point of view, this means that a business must consider how it will be organized to best take advantage of income tax laws and limits on personal liability. Furthermore, the plan and organization must be flexible enough to require only minor adjustments in the future, rather than major overhauls.”

A lawyer can help design an effective corporate structure

The decision to incorporate is one of the simplest organizational questions a young company must grapple with. There are many others. If two or more partners are involved in a corporation, a lawyer can draft a partnership agreement that will help avoid arguments, provide clear goals and an effective way to end the partnership and break up the company should the nee arise. The attorney can draft shareholder agreements, business agreements, deal with issues arising out of mergers or acquisitions and many other corporate structure issues.

A lawyer can help secure the resources necessary for growth

When small and medium-sized businesses fail, the culprit is usually lack of financing. Securing venture capital can make or break a company’s expansion plans. A lawyer can help prepare an effective business expansion plan that can secure venture capital. Most experienced corporate lawyers also have their own networks of venture capitalists and financial institutions that they can draw on for clients. “We provide proactive advice to help clients grow and suggest ways in which they might structure affairs from a tax effective and efficient point of view,” says Stordy.

Your lawyer has the best interests of your company in mind

Confidentiality and prohibitions against conflicts of interest set lawyers apart from most other professionals. Any information disclosed to a lawyer, with rare exception, is protected by the attorney-client privilege. Even if your company has to go to court, in most cases your corporate lawyer cannot be compelled to testify or reveal privledged information. Accountants, insurance agents, credit counselors, bankers, brokers don’t have that same benefit. In the same vein, lawyers are also ethically prevented from representing two or more clients with conflicting interests. Most other professionals can assist clients with competing interests. For example, a bank can provide banking services, an insurance company can sell insurance, or an accountant can manage the books for any number of businesses which are in direct competition with each other.

A lawyer can act as an effective team leader during the growth or expansion process

Many growth expansion issues extend beyond the scope of legal expertise. A good corporate lawyer can work with other qualified professionals who can create an effective team to work on behalf of the client. In fact, lawyers are required to do this in order to meet professional standards: they must engage other professionals whenever it is in the best interest of the client. When planning an initial public offering, for example, a lawyer may be committing legal malpractice by not involving an accountant or a stockbroker. Above and beyond that, a good corporate lawyer recognizes his or her limitations and knows when to bring the expertise of another professional to the table.

A lawyer can be an effective safety net when disaster strikes

Let’s face it. Things don’t always go as planned in the corporate world. Lawsuits, regulatory mishaps, bankruptcy, liability issues and other legal problems are also a fact of business life. A lawyer who is part of the planning process of your business can be much more effective in dealing with legal pitfalls than someone who must be brought in at the last minute to fight a legal challenge. “I often see business clients when it is almost too late,” says Morrison.”