What’s the difference between a lawyer and a doctor?
Lawyers often do not need second opinions.
Let me explain: Many corporate transactions (or decisions) require advice from an outside adviser — an investment bank; an accountant; a lawyer; whoever. (Back when I was an outside lawyer, I used to think that lawyers were special. Now, you all look alike to me.) In many of those situations, the corporation needs one, strong outside opinion. If someone offers (or requests) a second opinion, then you should think hard. In a few situations, you might want a second opinion. But, frequently, obtaining a second opinion may do more harm than good.
Let me illustrate with two examples….
Example one: Your company is considering acquiring another entity. You obtain a valuation of that entity. You’re now ready to do the deal: You have an opinion; your decision-makers are fully informed; act.
Suppose someone now requests a second opinion. This can happen: An influential person involved in the process might think the valuation is not quite right. Or your acquisition might involve one of your corporate business units buying something from a different business unit. The acquiring side of your business might think the price is right; the selling side might be less happy.
Does it do you any good to obtain a second opinion in this situation? If the second opinion precisely matches the first, then you’ve gained some comfort and created no trouble. But if the second opinion differs significantly from the first, where have you left yourself? Which of the two conflicting opinions is right? Should you now commission yet a third opinion, to break the tie? At that point, the vote may be 2 to 1 — or, worse yet, 1 to 1 to 1, depending on what the third expert says. What then? Retain a fourth expert? This might be a good way to insure that experts are fully employed in perpetuity, but it’s no way to run a business.
Even if the second expert opinion varies only slightly from your original one, that second opinion can cause trouble. If litigation arises, opposing counsel will highlight small differences in assumptions or conclusions and trumpet those differences before a jury of twelve men good and true. Sitting in the back of the courtroom, you may well regret having obtained a second opinion to “strengthen” your position.
For my second example, move the same situation into the boardroom of a public company. The board is considering some transaction. The board does not solicit two opinions, but somehow ends up receiving two — perhaps opinions provided by two different law firms overlap in some area, and the firms reach differing conclusions on the overlapping issue. Or perhaps a non-legal expert — the investment bank or accountant — throws in some tangential advice that both overlaps and conflicts with the advice you received from a law firm. You now have a second opinion. Congratulations — what should the board do?
It’s dangerous for a board to act when it possesses two diametrically opposed opinions. Depending on the circumstances, that may be liability waiting to happen. And it’s hard to solve this problem once it exists. The corporation can obtain a third opinion, but that doesn’t eliminate the second one, and the third opinion may create new problems of its own.
What to do?
First, if you possess two conflicting opinions, get the authors of the two opinions together in a room and have them work out their differences. Perhaps law firm A overlooked something that law firm B considered. When firm A takes that new information into account, then firm A can revise its opinion. Or perhaps the differences between the two opinions involve matters of judgment, and firms A and B can, on reflection, conclude that there’s a middle ground upon which they both agree. Or perhaps there’s some other way to conform the two conflicting opinions.
More fundamentally, however, remember that lawyers are not physicians. Do not solicit gratuitous second opinions. Corporations often need one strong, compelling opinion, and no more. A second opinion adds no value and may violate the Hippocratic Oath: It may do some harm.
Mark Herrmann is the Vice President and Chief Counsel – Litigation at Aon, the world’s leading provider of risk management services, insurance and reinsurance brokerage, and human capital and management consulting. He is the author of The Curmudgeon’s Guide to Practicing Law (affiliate link). You can reach him by email at [email protected].