Here is a conversation that I had with lawyers from time to time. I would provide in a contract that interest would be payable at 18% if my client was not paid on time.
Author: Murray Gottheil
Over my many years practicing business law I formed some strong opinions. Here are two of them which relate to shareholders agreements:
I only know two things about franchising. Here they are.
While I was practicing law, I often came across clients who operated a successful business that they wanted to franchise. They had the idea that they could sign some agreements and then other people would send them money, with very little effort being required on their part.
Death: My favourite topic in a shareholders agreement.
What I like about the death provision is that it is usually not controversial, especially if the shareholders do not have an inkling about who is likely to die first.
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The Power of Doubt
Back when I was practicing law, I used to say that my greatest skill was doing lunch. I did an awful lot of lunch with some pretty good business development results. I have previously written about how I used my lunch meetings to develop personal relationships. You can read about that here: Eating Your Way to A Great Client Base
During my lunch meetings with potential clients, I often used the power of doubt to sell my legal services.
I have decided not to pick on Big Law today for a change. Let’s talk about smaller firms with entrepreneurial founders instead.
Sometimes lawyers call me and tell me about how they feel about their law firms. They don’t call me if they are happy. They call me when they want out. Out of the firm, out of their practice area, out of private practice, out of the practice of law altogether. Out of something.
I have heard a good number of tales of woe. One interesting theme is around the flaws of law firm founders. Serious flaws. The type of flaws that drive good people to head for the exits. I have termed this Founder Deficiency Syndrome. It sort of has a nice ring to it, don’t you think?
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Resentment and My Robot Vaccum
Saint Augustine is reported to have said that “resentment is like drinking poison and waiting for the other person to die.”
There was once a law firm which had a particular department which experienced some turn-over in its associates. Lots of turn-over, actually.
The department in question was headed by a lawyer with a ‘strong personality.’ I am not qualified to give a psychological diagnosis of this lawyer, but if I were, I would probably say that this person was a narcissist. If I was being nice.
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Selling The Extended Team
Back when I was practicing law, I was responsible for bringing in business to feed myself and a nest full of hungry associates and law clerks. In my early days I was not able to do that using LinkedIn, because someone had forgotten to invent social media. By the time that LinkedIn was in full swing, I had already fallen into a pattern of relying on networking to develop business. It worked well for me, and I really enjoyed having my partners treat me to lunch four or five times a week.
Here is a warning for Canadian business owners and their lawyers. Your plan to motivate and reward your employees may backfire if the messaging is not correct from the outset. There is no better way for an owner to screw up the morale of its most valued employees than to start talking about offering them shares in the company before figuring out exactly how to structure the arrangements.