By Mark Snitchler

This e-mail address is being protected from spambots. You need JavaScript enabled to view it

It is true that in a tight economy, most businesses need to scale back expenses.  But the value of a general counsel can far exceed that of other typical cuts.  Business owners and entrepreneurs need to examine whether or not reductions in or elimination of their legal budget makes good business sense.

Too often, business owners only call their lawyer when trouble arises. The call to counsel might be necessitated by the action of a former employee soliciting company customers to difficulty with a supplier over purchase terms. These problems, however, may have had simple and cost effective fixes had the client discussed their operations in advance with their lawyer.

When used regularly, your legal counsel provides an invaluable sanity check regarding the decisions most important to your business.  The change must start with the business owner's recognition that legal counsel is more than a problem management specialist.  Think of your lawyer as a trusted advisor who can help you avoid many problems in the first instance.

To allay a client's fears and to generate a more efficient use of counsel that truly serves as the company's "outside" general counsel, ask your lawyer for an annual "maintenance package" of legal services.  This would consist of attendance at your annual and quarterly business meetings, and include discussions about your general business operations, including issues such as real estate acquisitions, divestitures, new financing, the adding or the departure of partners in the business, to questions involving collection of old receivables.

By having regular meetings with your attorney, your legal professional will develop a greater feel for your business and will be better equipped to answer "quick questions" that are responsive to your needs and without spending an inordinate amount of time to understand the context of your question.  Regular communication with legal counsel can help the business owner avoid unnecessary risks or at least understanding the risks of a transaction before acting.

When the cost of these basic services is spread out over the year, the fees are surprisingly modest and especially compared to the savings that could be realized by avoiding expensive mistakes. A good general counsel is more than just a form of risk management.  Your legal counsel should be viewed as a strategic partner who proactively identifies your needs and threats before they become too costly to face.

As the world's marketplace gets smaller and smaller and competition grows, every business is looking for a competitive edge anywhere they can find it. The cost of legal counsel should be viewed as preventative business maintenance. By recognizing legal counsel as a prophylactic expenditure, there is simply no reason why every small business does not employ outside general counsel.