Ray Gehani is an authority on business economy.
As Assistant Professor of Management and International Business at The University Of Akron’s College of Business Administration, he says he’s fascinated by concepts upon which economic value and wealth are created. And he has unbridled enthusiasm for what he calls “the new knowledge-based, inter-connected economy.”
“In the old industrial economy, value and wealth were created by processing physical resources, as Carnegie and Rockefeller cornered physical resources of steel and oil to create wealth,” he explains. “In today’s knowledge-based economy, value and wealth are created by mining and refining knowledge.”
Refuting Shakespeare’s suggestion to shoot all the lawyers, Gehani says that, now more than ever, companies should harness the critical thinking skills of lawyers to gain a sustainable competitive advantage. That’s because today’s business environment is one in which ideas rule, and lawyers are the most successful miners and refiners of knowledge and ideas.
“Business lawyers are the gatekeepers of legal boundaries, and they span the bridge of taking crude opinions, data, information and even emotions, and processing those to extract new knowledge that is profitable to them, to their clients and to society,” he says.
Gehani cites the Firestone Tire recall.
“Who can and will play a critical role in the final settlement? Lawyers on both sides will refine the mountain of information and emotions to extract new knowledge that will save other lives,” he says. “And when the liabilities are going to be assigned, the lawyers will say that it is also important that we empathize with the customers rather than just fight for what is right or wrong.”
Gehani contends that competent attorneys with integrity can be a great asset to any business because they’re experts at finding a needle of valuable knowledge in a haystack of details. The wise counsel of a good lawyer can be priceless on issues such as business formation, sensitive communications, intellectual property and financial issues, he says.
Such an endorsement is heartening to Akron attorney David Kern, who specializes in tax and corporate formation at Buckingham Doolittle & Burroughs LLP.
Kern explains that business attorneys are able to shepherd businesses through convoluted issues by looking with 20/20 hindsight at what was effective for other clients.
“The whole host of issues that impact businesses can be well analyzed by attorneys because we can help plan around the pitfalls, depending on the route a client wants to take,” says Kern.
He uses examples such as identifying the most suitable legal entity for a business that results in the best tax benefits, helping an entrepreneur determine costs and contingencies in assembling a work force or guiding a tech company through the process of implementing new ideas while exploiting available technologies.
“Attorneys also bring a level of objectivity to the analysis,” he says. “I come to the table with an accounting agree, a law degree and a master’s in tax law, and I would say that my ability to critically think certainly helps in refining the analysis.”
For example, a client might be presented with a roll-up transaction that promises stock options and other financial rewards. But when an attorney scrutinizes the business plan or the SEC filing, the lawyer can spot weaknesses and safeguard the client’s best interests.
“It’s my job as the attorney to look at the transaction, assume the worst case scenario, present that to the entrepreneur and work with the client to build in protection if they decide to move forward in that transaction,” says Kern.
Gehani says attorneys are able to “build in protection” due in large part to their mastery of words and concepts.
“Lawyers have the discipline of very specific communications skills, and they use words carefully in terms of the cost implications of the words,” says Gehani.
Unfortunately, says Gehani, the legal profession has failed to educate the public about how it adds value to business, to the economy and to society as a whole.
“In the absence of such education, all we see how they take a big chunk for themselves from whatever value they create,” Gehani says. “They should be highly concerned about the low public image of their profession, and take the high road of educating us about legal issues, rather than taking the low road of accounting for every billable minute.”
Marc Gertz, an attorney specializing in bankruptcy and commercial law at Goldman & Rosen Ltd., acknowledges Gehani’s opinion as an accurate appraisal.
“The public perception of attorneys has always been that they inflate hours and are greedy. And since we deal with words, concepts and knowledge, some clients have the perception that they can be a better lawyer than the one they’ve hired,” says Gertz. “But many of us in this profession feel very strongly that public education is the best way to go, and it also legitimizes what it is we do for a living,” says Gertz.
Kern and Gertz point out that many in their profession are working to alter such negative perceptions. In addition to hosting client seminars, Buckingham Doolittle & Burroughs is enhancing its monthly newsletters and Internet site to provide free corporate planning ideas and advice about important legal issues pertinent to its areas of specialization.
“Most of my clients don’t even get billed for general business discussions, because I want to know what’s going on in their businesses, to help move their companies forward,” says Kern.
Likewise, Goldman & Rosen is packing its client communications full of free advice on issues germane to the firm’s specialization and is working to improve its Internet offerings. And Gertz confides that since the early ’90s, he’s been spreading the word about banking and consumer law by presenting seminars to organizations and businesses, lecturing at colleges and universities — even enlightening youth within the public school system.
“As much face time and good advice that people in our profession can give to the public and to business owners, the more they need to be involved in those processes, and the better off the public will be,” he says. “And certainly, you’d like to be in a position to speak with as many small businesses as possible about the variations of bankruptcy law, so that if they get in a position where things are going bad, they know which way to turn.”
Hearing this, Gehani reiterates, “The high road of the legal profession should be to help us know and understand the legal matters, rather than to have us use lawyers as crutches every time we have some trouble.”
Kern agrees. “From a position of judicial economy, if you get your attorney involved early, you’ll achieve the result you want accomplished.”
Laughing, Gertz concurs, “In terms of businesses, what you want to have is somebody that’s a financial planner for a business, so that you never have to consult with a bankruptcy attorney like me!”
How to reach: Buckingham Doolittle & Burroughs LLP, (800) 686-2825; Goldman & Rosen Ltd., (330) 376-8336; University of Akron College of Business Administration, (330) 972-8140; Akron Bar Association, (330) 253-5007
