Why So Few Lawyers Are “Trusted Advisors”, and Why It Matters


The Point

Though prized by earlier generations of corporate executives for their wide-ranging wisdom, today’s most highly sought-after lawyers tend to be narrowly-focused technicians.

How did that come about? The technician specialties are highly rewarded financially, and they offer stable work. And, with the legal system’s intrusive and unreasonable demands on business enterprise, such specialists’ help is imperative.

But the C-suite, and the frontline for that matter, face a broad category of business decisions that demand mature practical judgment, in addition to mastery of legal technicalities.

This Matters to Your Business

Consider the following:

I was associate general counsel at a Fortune 500 corporation. Senior management had identified an acquisition target.  I was assigned to join a half dozen attorneys from the most prestigious law firm in our West Coast city to conduct due diligence in an Eastern city.

Among our concerns were five separate securities fraud lawsuits naming the target as defendant. Brought by different groups of plaintiffs. In different federal courts throughout the country.

The law firm had assigned a partner from their securities defense practice. Harvard College. Columbia Law School. Crème de la crème.

She analyzed the five cases, assisted by associates from her firm: Laying out the evidence as she’d read it in the due diligence materials, then applying court precedents to the statutory text and applicable regulation. Then concluding, on each one: “We would win a trial of this case.”

In the midst of this process, I blurted out:

“Your legal analysis is flawless. But it’s all beside the point. The real question is this one: Should my company spend good money to become a defendant at all in this bad situation?”

The Senior Vice President running the deal saw my point, and killed the deal: “One of these fraud suits is a ‘legal problem’. But five of them, from different plaintiffs in different places? That’s a management problem. An integrity problem really.”

Because …

Earlier this week, Bloomberg Law published an interview with Tim Mayopoulos, former top lawyer for Bank of America, and former CEO of Fannie Mae, who was tapped earlier this year to salvage Silicon Valley Bank:

“’I tend to look for people who are not only good technicians, but those who are prepared to bring a broader business perspective to a set of problems and recommend a course of action,'” Mayopoulos said.

“The most valuable legal advice [Mayopoulos] has received hasn’t been something that came to him after thousands of billable hours or millions of dollars in fees, he said, but an ‘honest, candid, trusted perspective’ about a specific achievable outcome.'”

“My sense is that 40 years ago, clients thought of their most sophisticated lawyers as wise people, and now they view them as experienced, knowledgeable technicians.”

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