What Is a General Counsel and Why Is One Important for California Companies?
Every company in California should have three experienced external business relationships: a business attorney, a CPA/Tax Expert, and a banker or financial funding source. These are important resources you can turn to at any point in your business journey to seek sound advice and counsel and to inform good decisions which enhance the value and success of your business.
What is a general counsel, and why is an experienced business attorney a strong asset for any business owner? Your general counsel should be an attorney who has decades of experience in business law and the specific industry or vertical market(s) you serve. The vast majority of businesses formed in California fail within the first five years. What is the difference between those who fail and the companies who not only survive but grow into profitable ventures?
The answer to that question is related to the answer to another question: Why do professional and Olympic athletes need and/or have a coach? Why do those who are some of the most successful and talented individuals on the planet need a coach?
Your business general counsel is a lot like the coach of a professional or Olympic athlete. Your general counsel should be a business attorney with decades of experience who has helped many other companies like yours in every aspect of business from formation through a merger or acquisition, from advice and counsel as an employer to corporate governance and compliance. You need a trusted advisor you can turn to with questions, challenges, disputes and opportunities. You need someone who has “been there, done that” that can help you to avoid the pitfalls and challenges which cause most businesses to fail.
The heart of business is the transaction. Business transactions involve a variety of relationships including employees, customers, suppliers and vendors and other business and professional relationships. The likelihood of success in any business transaction is directly related to the quality of the contract which governs that transaction or relationship. Your general counsel should have an extensive catalog of contracts they have developed and proven over the years which can be efficiently and economically tailored to meet your unique application.
Why not just download forms and contracts? First, California is one of the most legally complex and risk-laden environments for any business owner. There are too many unique legal issues that must be meticulously addressed. Second, in the event of any dispute the legal benefit of the doubt goes against the party who provided the contract. So, any ambiguity or inaccuracy in the form or agreement you downloaded can and will be used against you. If you are in business in California, a dispute is inevitable.
Who do you turn to when you face important business decisions? Who can help you to formulate strategies to increase your business, reach new geographical and vertical markets, protect the intellectual property and trade secrets associated with your company and protect you in the event of a dispute or lawsuit? Who will keep you up to date on changes in federal, state and local laws as an employer and help to make sure your employee handbook, policies and procedures and internal processes are legally sound and enforceable? Who can you turn to in those times when you face an important business challenge or opportunity?
The answer is your business general counsel. Like the coach of a professional or Olympic athlete, your general counsel should be an attorney with decades of real-world experience in California who has worked closely with companies of all sizes in your industry or market. Look for a business attorney who owns a firm and faces the same type of issues you face as a business owner and employer. Look for a legal partner who has guided many other companies through mergers, asset purchases and acquisitions who can also help with everything from the formation of a company to the contracts which support it.
Your general counsel should have extensive experience in legal disputes, mediation, arbitration and trials. However, they shouldn’t be focused on padding the fees associated with a dispute, they should provide strategies to resolve any dispute or lawsuit quickly and cost-effectively. Your general counsel should be one of your closest and most trusted business advisors.