A business leader asks outside legal counsel questions about EU privacy obligations related to a new product launch. Counsel confidently responds with thorough, well-supported answers that align with the applicable law and regulations. Naturally, this makes the executive feel confident about the attorney’s knowledge. But that’s not the entire story.
Business executives excel at judging if their attorneys are capable, knowledgeable, and efficient. However, savvy executives take it a step further and evaluate if their attorneys help them make better business decisions. In conversations with my clients, I think it boils down to counsel’s ability to toggle seamlessly between “throughput” mode and “judgment” mode.
Throughput vs. Judgment
Throughput refers to an attorney’s ability to perform a high volume of work competently and quickly. Throughput is critical for routine legal work, such as high-volume commercial contracts or standard compliance issues.
By contrast, judgment refers to an attorney’s ability to guide a client toward better decisions. For instance, predicting and mitigating future risks, crafting contract language to close business faster, modernizing a business process, or accelerating a client’s compliance maturity.
Good legal counsel seamlessly move between throughput mode and judgment mode, employing the best approach given the context. Superior legal counsel consistently use judgment mode to achieve better client outcomes, even when executing on throughput work.
Evaluating Counsel
Criteria such as years of experience, pedigree of training, the size, stage, and industry of clients, and client recommendations are all important indicators of capability. But these criteria demonstrate what the attorney has done, and are not reliable predictors of which mode the lawyer will assume in your engagement. For instance, a highly credentialed, accomplished attorney could function strictly as an expert technician, while an attorney with considerably less experience or pedigree could consistently provide proactive strategic advice. In some cases, attorneys may function differently depending on their comfort level with a given situation.
The strongest counsel relationships are not built on judgment or throughput alone, but combine both as appropriate. How are clients supposed to evaluate these skills in their counsel? I recommend three stress tests.
The Ambiguity Test
This test evaluates counsel’s behavior in situations where there is no clear legal answer and a judgment call is needed. An attorney that functions strictly in throughput mode might provide a memo of all risk considerations rather than a clear recommendation, and in doing so, entirely shift the legal risk-allocation call to the business. By contrast, a judgment-mode attorney identifies key risks only and makes specific recommendations with pros and cons. Judgment-oriented attorneys are willing to own recommendations and decisions rather than just presenting options.
For instance, say due diligence during an acquisition reveals potential ownership gaps with valuable intellectual property. Judgment must be exercised about the likelihood of a problem arising, the potential impact if it were to occur, and whether to proceed with or renegotiate the deal. A throughput-focused lawyer might provide the business with a list of the possible scenarios and the risks associated with each position, and leave the business to decide from the options. By contrast, a judgment-oriented lawyer would take it a step further and recommend a path forward. The attorney may say, “I recommend moving ahead with protections in place rather than delaying the transaction. You are accepting XX risk, and here is why I believe you should accept it and move forward.”
The Disagreement Test
The disagreement test evaluates whether counsel will push back on the executive team when they disagree on an important matter. For instance, say the executive team wants to proceed with a deal before all the legal issues have been ironed out. An attorney exhibiting throughput-mode behavior might remain quiet in a face-to-face business meeting, and then email concerns afterward. By contrast, a judgment-mode attorney is not afraid of raising issues and recommendations in real-time, working the problem and driving towards a practical solution. Say an acquisition is scheduled to close within two days, and a major due diligence issue has just been uncovered. A throughput-oriented attorney might tell the executive team, “This will delay closing, we must mitigate the issue with additional language in the acquisition agreement.” A judgement-oriented attorney would instead assess real-world risk and weigh that against the appetite of both sides to reopen the acquisition agreement. Then, make a recommendation and explain why. The goal is not to stop the transaction, but to guide the business leaders to an informed decision.
The Compression Test
The third and most revealing test is the impact that time pressure has on the quality and decisiveness of counsel’s advice. When the deadline is tight, throughput-mode attorneys’ advice tends to get vaguer and more hedged because there is no time to research in depth every element of an issue. On the other hand, judgment-mode attorneys become more decisive under pressure. They draw on pattern recognition from their experience, employ real-world risk analysis, and counsel the client within the context of the time pressure.
Suppose a customer threatens a lawsuit if you don’t respond to their demands within two business days. A throughput-focused attorney starts their work by moving as quickly as possible to meet that deadline, and may become flustered when they realize the deadline can’t be met. In contrast, a judgement-oriented attorney immediately challenges the deadline and helps the business confront that issue with the customer, before starting any legal work. Rather than weakening good legal judgment, time pressure reveals it.
Putting It All Together
The best way to conduct these three stress tests is to revisit recent situations that tested your counsel relationship. Consider how your counsel assessed the issue, weighed the risks and options, and guided you toward a decision. These reflections can provide valuable information about whether your counsel is effectively transitioning between throughput and judgment and helping you make better business decisions.
Mendi Sossamon, a Partner at Potomac Law (PLG), crafts legal solutions to help businesses grow. She leverages more than 27 years of legal experience, which includes a stint in Big Law, running her own law firm, and serving as a Deputy General Counsel for a billion-dollar company. Based in Austin, Texas, Mendi focuses her practice on outside general counsel services, complex corporate and commercial transactions, intellectual property strategy, and commercial optimization.
