Lawyer-Client Relationships Go Both Ways
from
July/August 2007
by James Burnett & John Ward
To get the best work out of your lawyers, you need to do your part. Prestigious attorneys tell what makes a client great.
By every measure, Martin Lipton is one of the nation’s elite attorneys. A founding member and name partner of Corporate Board Member /FTI Consulting’s seven-time Top 20 firm Wachtell Lipton Rosen & Katz, he is immortalized in law school texts as the inventor of the “poison pill” defense against hostile takeovers. The boards of directors of name-brand corporations like Disney, Home Depot, and Morgan Stanley seek his counsel, and the American Academy of Arts and Sciences tapped him as part of a team to literally write the book on Restoring Trust in American Business in the wake of Enron and the subsequent corporate scandals. He and his 75 counterparts at Wachtell regularly gross the highest per-partner profits in New York City’s ruthlessly competitive legal market; in 2005, their take was just under $3.8 million each, according to American Lawyer .
Lipton reached the pinnacle of his profession by getting results for an array of companies, some easier to work with than others. At 75, after more than a half-century of practicing law, he knows that not all clients are created equal. Asked what separates the great ones from the others, he says, but only for openers, “The best are those that come to a firm with interesting cases.”
Though the fees they charge generally don’t change from client to client, the psychic income—and with it, the motivation—lawyers generate from a case depends a lot on its details. Even if it requires the same billable hours to write, a brief bound for the Supreme Court will inevitably get more thought put into it than a routine motion prepared for a humdrum bankruptcy hearing. Not every case is inherently compelling.
It’s in the workaday proceedings that the proper care and feeding of your outside counsel can become most vital. As the client, you don’t ever want to lose a case because you didn’t do your job. Talk to sought-after attorneys in disciplines from intellectual property to criminal defense to directors’ and officers’ liability insurance, and it becomes clear that regardless of their legal needs, great clients—smart clients—share a handful of core attributes, starting with a willingness to be clear and complete when communicating with counsel.
Like a lot of lawyers of his stature, acclaimed intellectual-property litigator Morgan Chu, 56, of Irell & Manella in Los Angeles will do whatever’s necessary not to get out-hustled by opposing counsel. He’s pulled all-nighters “many, many times” in 31 years of practice, and still regularly puts in full workdays on Saturdays and Sundays. “Twelve months ago,” he writes in an e-mail—drafted while he ducked out of a meeting he was attending in preparation for a recent trial—“my wife and I had a trip to West Africa arranged and fully paid for.” It was the second time they’d planned the trip, which cost more than $20,000, nonrefundable. “A client matter arose just before we were to leave.” Chu canceled his plans. Priorities are priorities, he says.
So when another client came to him late last year with a chancy project that needed to be completed on a near-impossible timetable, there was never a question about whether Chu and his team could hit the deadline. Rather, the question was: Was rushing it through in the best interests of the client? “And when some key people with the company said, ‘We don’t want to hear just the answers we would like—we want your independent advice,’” says Chu, that simple instruction proved pivotal. “We worked as hard as we could to see if we could achieve the goal in the time available without incurring enormous risk. And in the end, when we laid it all out, the company said, ‘Okay, we understand.’” What the company now understood, thanks to Chu and his colleagues, was that the perils outweighed the benefits of plowing ahead. The client decided to back-burner the project until it could be pursued more safely.
It may seem strange that something as basic as clear, robust communication with their clients ranks so high on lawyers’ wish lists. But that kind of full exchange of information doesn’t happen as consistently as it should. Yes, federal encroachment on attorney-client privilege has had “a chilling effect on the way we communicate,” notes Bruce McLean, chairman of Akin Gump Strauss Hauer & Feld in Washington, D.C. But that and other barriers can be surmounted. And attorneys interviewed for this article were unanimous in pointing out the harm in failing to do so.
“It’s paramount,” says D&O insurance specialist Carolyn Rosenberg, a partner at Reed Smith Sachnoff & Weaver in Chicago. “I don’t know how you can do your job effectively if you’re not getting an accurate picture or perspective, or all the information you need in order to resolve the problem. It just hamstrings you.”
At the outset, good clients put everything on the table for their outside counsel, including facts that on the surface may seem almost secondary to the task at hand. That starts with being explicit about how much you’re willing to spend. “It’s very important that a client give clear direction so that budgets don’t get overrun,” notes Katharine Martin, a senior corporate partner and the head of the business-law department of Wilson Sonsini Goodrich & Rosati in Palo Alto, California. Also, says Martin Lipton, if you’ve talked to another firm about the case, say so. And don’t neglect to mention “what advice was given and why you’re seeking additional advice,” he says. That will help the current firm better understand both your situation and your expectations.
It’s a good idea to tell the attorneys how you’d like them to communicate with you. “Some clients may want to be copied on everything. Others, once they trust you, may say, ‘Just give me the high points,’ or ‘When you need me, call,’” says Rosenberg. You should even spell out what medium you’re most comfortable receiving updates in. “Some folks are e-mail, BlackBerry folks,” Rosenberg says. “Some desire communication through the phone and voice mail or in person”—the last being a good way to facilitate a level of candor not easily reached in a memo or e-mail that might later be subject to subpoena. Lawyers aim to please. Many will happily adapt to a client’s style, especially if it gets needed information flowing more freely.
Sheila Birnbaum, a New York City-based partner at Skadden Arps Slate Meagher & Flom, specializes in tort defense. Two years ago she was an integral part of the Skadden Arps team retained by Chiron, a California pharmaceutical concern, after British regulators shut down its factory in Liverpool, England. The shutdown forced the company to default on promised flu-vaccine shipments to the United States, leading to widespread shortages; class-action lawyers pounced, and the Justice Department and Securities and Exchange Commission each launched investigations. Because Chiron’s CEO and general counsel moved quickly to get Birnbaum and her colleagues everything they needed, she says, “we were able to decide very early on what our general strategy was going to be.” Chiron avoided federal punishment, and “within a year of the crisis, all the litigation was resolved,” she says.
Birnbaum has also seen things work out less smoothly. “Sometimes clients keep the lawyer in the dark. Most of the time I don’t believe it’s nefarious. They’re not doing it purposefully. Sometimes they don’t know all the facts themselves,” she says. “What they need to do is permit you to interview the parties in the corporation who have the info about whatever it is you’re responding to.” If the outside attorneys continue to press for more access, they’re not being pesky. They’re just performing the duties the client hired them for. “You can’t rely on somebody telling you what they believe the facts are,” says Birnbaum. “You have to go in yourself and find out what really went on, because that helps you make better decisions.”
If strong communication is the foundation of a productive relationship between lawyer and client, then the next level up—the “higher consciousness,” to apply the mystic’s term—is reached when the client embraces the lawyer as a true partner. “Where we think we do our best work is when we’re really integrated with the client and we feel like we’re kind of a member of their business team,” says Bruce McLean. Birnbaum, for her part, has noticed that with the best clients “there’s a real give-and-take,” as well as “mutual respect and cooperation in reaching the corporation’s overall goal.” Put another way, it’s the difference between giving a painter orders on what color the room should be, or bringing in a decorator to go over the entire floor plan and being willing to consider setting the brushes aside in favor of knocking down a wall to make the whole space function better.
Lawyers say a partnership mentality creates advantages for clients in any legal proceeding. It is probably never more essential, however, than when a company finds itself charged in a criminal case.
“If it’s a major problem, a criminal case has a lot of parts to it—law enforcement, civil litigation, regulatory, maybe a congressional part, and maybe a public-relations part,” says Robert Bennett, a Skadden Arps partner who works out of the Washington, D.C., office and has represented President Bill Clinton and Secretary of Defense Caspar Weinberger, among other luminaries. “A good client will involve you in all those things. You have to be very careful in these cases not to have what I call ‘crosstown hypocrisy.’
I can’t be going in to the SEC or the Justice Department and saying one thing, then having the client or someone acting on behalf of the client, whom I’ve not been coordinating with, saying something opposite or inconsistent. A company can get into a lot of trouble that way.”
While declining to name names, Bennett offers a very lawyerly “composite” example. “You have a situation where the government is conducting an investigation and it’s trying to turn people inside the company against the company,” he says. “And we’re conducting interviews of its employees, and we’re trying to keep some control of the witnesses in an appropriate way. Without anyone discussing with me what the press strategy should be, an article appears that says, ‘This is an honest company and we will not tolerate wrongdoing.’ That’s fine, but then there are words to the effect of, ‘We are going to fire anybody who was involved.’ Now someone who could have either stayed on the reservation or gotten off the reservation feels that that statement makes him the scapegoat, and he decides he will no longer cooperate with the company and will say and do whatever it takes to protect himself .”
Bennett continues, “This is an example of where you should have had a closer working relationship between legal and PR. It was perfectly okay to say, ‘We’re not going to tolerate wrongdoing; we’re conducting an internal investigation; we will take appropriate action.’ But the statement went so far and was so specific that an individual felt he was being identified, even though his name wasn’t used. Had we been working together more closely—given my knowledge of the individuals, which the PR department did not have, and how they were reacting—we could have fashioned a statement which accomplished the PR goals but at the same time did not increase the risk for someone to go out and say something that was not accurate to save his own skin.”
The kind of coordination Bennett describes is to a large extent the byproduct of a corporation’s culture, and by the time the company is in crisis mode it may be too late to try to instill it. Katharine Martin says that responsibility for fostering a collaborative attitude rests in the upper reaches of the organization chart, with directors and officers—the same people who can send the message that mischief won’t be tolerated in the first place. “Setting the right tone at the top regarding the company’s attitude toward compliance, ethics, and governance in general is very important,” she says. “Great clients that get great service are those that respect advice and respect lawyers, and you want to establish that from the top. If you do that, it provides a much better environment for outside counsel.”
It’s noteworthy how often prominent attorneys come back to the word “respect” in talking about the qualities of the ideal client. A lawyer like Bruce McLean, after all, wouldn’t seem to be concerned about gratitude from the people who pay his fees; the 1,900 attorneys and staffers working under him in 15 offices around the world are reminders enough that he’s good at what he does. Yet if you question him about the best experience he’s had with a client recently, he’ll tell you about the following case: The company, which he won’t name, was in a critical, very critical, situation, and “they didn’t think they had a chance to win,” he says. “We had a legal theory that was definitely a stretch—there was support for it, but it was still a stretch—and we managed to prevail not just at the trial-court level but all the way through to the Supreme Court. The appreciation that the client expressed, from the CEO to the in-house lawyers we worked with every day, was extremely rewarding.” Basically it came down to this: The client said thank you, and that meant a lot.
Some view the relationships between attorneys and clients as exclusively transactional, as hourly rates charged and invoices submitted. Often that’s undoubtedly true—all those lawyer jokes come from somewhere. But the companies that get the best work out of their law firms have more emotional ties to them. Katharine Martin speaks of the McClatchy Co. newspaper chain, which she’s advised since she passed the bar back in 1987, almost as if it’s family: “Having a relationship with them for that long period of time and building a level of mutual respect”—yes, there it is once more—“has been really important to me.” Says Martin Lipton, “Recognize that loyalty is a two-way street.”
Carolyn Rosenberg talks fondly of cases during which she’s been called in by directors and drilled on the rationale for her chosen strategy. “The intense give-and-take at an extremely high level was really exhilarating,” she says. “I find it a very rewarding experience, mutually, to be allowed to give that kind of presentation to the board.”
Open communication. Trust. Respect. Those are the key attributes that make a client great. (For other tips on how to get the most out of your lawyers, see the box “Advice for Clients—And It’s Absolutely Free” on page 67.) At bottom, the good client is the client who realizes that like all relationships, the one with the lawyers takes work. “Sometimes I hear of clients who view their lawyers as if they were the enemy, who believe that the lawyer is a necessary evil,” says Morgan Chu. “What they really should be doing is viewing each other as colleagues.” When you’re going to expect a guy to bag a trip to Africa to be there for you, that’s not an unreasonable request.
