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Who You Gonna Call?

Published Thursday Jan 12, 2012

Author ERIC COOK

It's a beautiful sunny day on the Seacoast and you are the CEO of a company that is humming away nicely producing widgets. The phone rings and it is your front desk person telling you there are four people from the NH Department of Environmental Services asking about hazardous discharges in a nearby river. Who you gonna call?

Big companies can afford in-house attorneys and staff that can research and create books of policies so that when bad things happen, like visits from regulators or accidents, they have the resources to quickly and correctly handle them. Small companies-which account for most employers in NH-cannot carry that same overhead. Too often, creating and implementing crisis management plans and comprehensive policies take a back seat.

The problem is that when something bad does happen, it's too late to take the time to carefully research the issue, thoughtfully create a response, and then carefully implement it. And the actions you take at that moment will have implications going forward, sometimes
expensive implications.

What you need is a quick list of go-to lawyers who have the expertise you need that you can call immediately. Here's how to formulate that list.

Navigating the Legal Minefield

Why call a lawyer in a crisis? In a situation like the example above where regulators are onsite and there are potentially severe legal ramifications, you need to have access to someone who is familiar with the relevant law and your business, who has dealt with similar situations before, and who may even personally know the inspectors. The same logic applies in a situation where you discover some sort of wrongdoing that violates the law. The building may not be burning down, but you need to talk to someone who can guide you and your company through the risks at hand.

In this era of legal specialization, an attorney experienced in the complexities of your particular situation is just the crisis manager you need. The challenge is knowing whom to call for what situation.

In the throes of a crisis, many companies will call someone familiar, be it the in-town sole practitioner from Rotary who helped them form the LLC, or the expensive New York firm who helped them with financing. The problem is that the local attorney may know nothing about dealing with the DES, or the New York firm might have a big environmental practice, but it's based in Albany and is unfamiliar with NH regulations.

So you either have a local person charging a relatively low rate who knows nothing about the area of law, or you have out-of-towners, charging a high rate, who know nothing about the specifics of NH environmental law. In either case, you are behind the curve and bleeding money while the attorneys educate themselves.

Categorizing your Legal Needs

The right solution is to have on tap and ready to go a list of attorneys already identified for specific needs. The first task is to identify your company's universe of legal needs.

Every company has different legal needs, but below is a list of the legal needs common to most companies:

  • Corporate governance
  • Finance
  • Contracts
  • Labor and employment
  • Intellectual property
  • Litigation
  • Insurance/risk
  • Compliance
  • Import/export
  • Environmental
  • Immigration
  • Merger and acquisition

Once you have identified your universe of needs, then you should categorize them as either routine or special. Routine legal needs are those common to all or most businesses such as labor and employment, litigation and contracts. Whether you run a biotech nano factory or a sub shop, you have employees and contracts, and you might get sued or need to sue someone.

Some areas of the law, like contracts and finance, are generic, meaning you can find good help anywhere. You should still look for local help when you can, as the rates are usually better, and if it all goes south, they know the legal forums where the dispute will be resolved.

Special legal needs are those that are unique to your company. If you run that biotech nano factory, you probably have some  unique IP needs, perhaps even some immigration needs if you bring in foreign scientists, and your contract needs are definitely beyond the scope of some local firms. There are attorneys out there with Ph.Ds in biology who work on biotechnology IP and contracts every day. They are rare and expensive-but you need them to ensure your success.

Making a Call List

Once you have identified your universe and categorized it, you need to find the right attorneys.

For routine and generic legal needs your best bet is local. If you have an employment law issue, you want a NH attorney who does NH employment law all day, who teaches other NH lawyers the subject and who practices in front of the NH Department of Labor regularly. If you get sued, or need to sue someone, you want a litigator who is experienced in the NH state and federal courts and who knows the people: From other litigators who are likely to represent the opposing party to the U.S. Attorneys and state Attorneys General who also practice in those courts.

You want a local attorney for routine needs because, in most cases, the rates at NH firms are less than firms in Boston, D.C. or New York. Not only are the rates lower, but in many cases the attorney may have served as a state regulator, or may have practiced in front of the regulator for some time and already has a professional relationship established. Having an attorney who is known to the local regulatory boards, courts and law enforcement rather than a fancy out-of-towner brings with it some level of credibility and familiarity that would be absent with a stranger.

For special legal needs, such as areas that are product- or service-specific to your company, you need to find a subject matter expert who knows your product or service. If you make high tech widgets that you want to export to Pakistan, you need someone who knows ITAR (International Traffic in Arms Regulations) and the widget industry. Probably that attorney will not be local, but in the era of the flat world, it does not matter if that expert is in Manchester, NH or Manchester, England.

To make your call list, use the Internet, trade journals, other companies, and the attorneys you know. The good attorneys will tell you when they are not experts in a subject and will want to help you find the experts you need. You are much more likely to keep using the employment lawyer who helped you find that perfect bio-nano manufacturing IP attorney, so ask.

Once you have identified the legal issues, categorized them, and found appropriate attorneys, organize all that information into a binder and train your senior management on its existence, where it is located and how to use it. Remember, you might not be there the day the agents come to call.

Finally, identify the largest NH firm on your list and the largest national firm. Get a contact from each to put into the General Crisis category. This is to cover that crisis that does not clearly fall into one of the other categories, but is one where you definitely want some legal help fast. When in doubt, call both.

While a comprehensive crisis management plan that is well thought out and practiced is nice, it's unrealistic for a small company. You can put together a simple plan by having a list of lawyers to call for specific circumstances. With that plan in place, you will know exactly whom to call whatever trouble comes your way.

Eric Cook operates General Counsel Consulting in Portsmouth. He can be reached at www.generalcounselconsult.com.

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