Biglaw, In-House Counsel, Partner Issues

On Ambrose Bierce And Business-Hostile Legal Advice

How can you give "business-friendly" legal advice to your corporate clients?

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Ambrose Bierce once said: “War is God’s way of teaching Americans geography.”

Ambrose Bierce, Esq., would have said: “‘Business-friendly legal advice’ means telling the client that it can do illegal stuff.”

Bierce, Esq., would have been funny, but wrong.

It’s important for lawyers to give useful advice. But many lawyers, both in-house and out, don’t seem to understand this. I’ve recently seen (or heard about from others) senior folks in businesses or in-house law departments ask not to receive advice from certain lawyers: “Don’t go to her! She’ll just tell me that everything is illegal!”

Or: “Don’t go to that firm! They’ll give us some theoretical answer that we can’t possibly use, and we’ll end up having to figure out a solution for ourselves anyway.”

Those reactions (and those words) make sense to business people and in-house lawyers; clients need real advice, not self-defensive crap. But some lawyers — typically at firms, but occasionally in-house, too — don’t understand this. To help those folks, here are illustrations of what “business-friendly” (or the opposite; shall we call it “business-hostile”?) advice sounds like . . . .

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I gave one example of business-hostile advice a couple of years ago, just after the United Kingdom passed its Bribery Act. At a seminar, someone asked a partner at a major London firm what the new Bribery Act meant for business entertainment. The question was plain enough: “We don’t want to commit (or even be accused of) bribery, but it’s routine to buy a client a cup of coffee or lunch. What limits shall we impose on client entertainment to be sure we comply with the new Bribery Act?”

The speaker’s answer was equally plain, but not exactly “business-friendly”: “Set a limit of $0. [He actually said £0, but I’m taking a little poetic license here.] Don’t spend a penny entertaining clients. That’s the only way to ensure that you comply with the Bribery Act.”

Several weeks later, that same law firm invited a few folks in our law department to attend some events at the 2012 Summer Olympics — courtesy of the law firm, of course.

So this must be the rule: Give the most conservative legal advice possible to your clients, because then clients can’t blame your firm for having given bad advice. But impose on yourself only reasonable interpretations of rules — because the firm’s gotta do business, doesn’t it?

That’s being “business-friendly” to yourself, but “business-stupid” to your client. Your client will notice this.

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We of course understand that the safest legal route for our company is simply to close our doors: “Doing business creates terrible legal risks! If you sell a product or service, then someone who buys your stuff could be unhappy! This could result in lawsuits! Lawsuits force you to incur defense costs, and judicial results are terribly unpredictable. Not only that: Once you start selling stuff, some regulator will probably insist that it oversees some aspect of your business. Regulations are burdensome; compliance is expensive; and if the regulator ever threatens you with legal action, it could be quite difficult to defend yourself! Just hang it up. Don’t sell anything! It’s not worth the risk!”

Business-friendly advice doesn’t mean telling the business that it can do illegal stuff. But it does mean thinking about risks, assessing them fairly, and then telling the business what choices it can reasonably make (within the bounds of the law) at what risk. Recommend a course that the business can properly take; adjust your proposal, as reasonably possible, to accommodate the business’s needs; and then move forward, with everyone’s eyes open to the risks.

And there’s more to it than that. “Business-friendly” means not just giving measured advice, but also giving advice that clients could reasonably implement.

An example illustrates the point: Suppose a company does business in 100 countries, including the United States. The company will surely be striving to design rules that it can implement globally, minimizing the amount of tinkering needed between countries to comply with local laws.

Why? Because the business people who must follow the company’s rules are not lawyers. The business folks don’t want to root around in your computerized database of thousands of dense, incomprehensible rules to try to figure out what they can do. The business people (understandably) want one simple rule that they can understand and follow.

So when someone asks you how a rule should be implemented in the United States, here’s the business-hostile answer: “The states all have different laws on this subject. You should implement 99 different rules to be used in countries outside of the United States, and then have another 50 different rules to govern what you do in each of the states.”

The client might innocently follow up: “How does choice of law work in the 50 states? Suppose a guy from our Los Angeles office meets a New York client for a lunch in Chicago, and they close a deal for some property in Dallas. Which state’s rule applies?”

The business-hostility continues: “My goodness — you’ve spied a wonderful issue there! We’d like to do a 50-state choice-of-law analysis for you, and then you’ll incorporate that choice-of-law analysis as part of your company policy. Anyone who’s going to lunch with a client can go into the database, find the relevant state’s law, read our choice-of-law analysis, and decide how to proceed. If your sales guys have any questions, they should call us. That’s actually an important point, because these policies raise difficult legal issues, which only fine lawyers (such as those at our firm) could possibly answer.”

At this point, I’m crying out to Ambrose Bierce’s ghost for help.

Remarkably, the ghost of Bierce, Esq., answers my call, and he gives slightly more practical — you could say “business-friendly” — advice: “Look at the laws of all 50 states. Decide if there’s a common denominator that would satisfy the laws of all 50 states. If there is, and if the business can live with that standard, then make the common denominator your rule. Everyone will be able to understand that rule, and everyone will be able to follow it.”

The ghost is talkative (for a spirit), and so continues: “If there’s no common denominator, identify the states that are outliers. If you have to restrict your corporate activities in Alaska, maybe the business can live with that. Or maybe we can re-jigger the rule some other way. Or maybe we can get relief from some local regulator.”

In any event, the answer is not to create a rule that only lawyers could love and that mere mortals could never follow.

Or maybe I have it all wrong. After all, Bierce did define “lawyer” as: “One skilled in circumvention of the law.”

Mark Herrmann is the Chief Counsel – Litigation and Global Chief Compliance Officer 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 and Inside Straight: Advice About Lawyering, In-House And Out, That Only The Internet Could Provide (affiliate links). You can reach him by email at inhouse@abovethelaw.com.

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