How to Choose a Lawyer for Your Government Contracting Company
July 22, 2014
How to Choose a Lawyer for Your Government Contracting Company
By: David Robbins, Chairman, Government Contracts Practice, Shulman Rogers Gandal Pordy & Ecker, PA, firstname.lastname@example.org, 301-945-9254
My colleagues in the Government Contracts Bar and I get asked all the time “how do I find the right lawyer for my growing government contracting company?” This is a challenging, gut-wrenching question that entrepreneurs and executives agonize over. A lot rides on the decision. Are you ready to move to the next level? Graduating from the 8(a) program in the coming years? Are you preparing for eventual sale? Or are you getting big enough that competitors and former employees are starting to notice and bring nuisance suits? You need a lawyer, but how to choose? This five-part series will help answer the question “how do I know what lawyer is right for me?” by breaking the analysis down into vitally important component parts.
QUESTION 1: DOES THE LAWYER UNDERSTAND MY BUSINESS?
The first and foremost question to ask is whether the lawyer understands your business. There are many ways to understand the business, but one of the easiest ways to assess your potential lawyer’s “business chops” is to see if he or she has spent time outside of the law. Has he or she worked as a contractor? Spent B&P time and resources on a major effort? Serviced government client needs? Been face-to-face with a government customer, managed their concerns, and won them over? Grown a business line? These lawyers are more likely to be able to advise you about the risks you need to know, but then focus on helping you with the business strategies you need to succeed.
QUESTION 2: WHAT KIND OF LAWYER DO I NEED?
The second question to ask is what kind of lawyer do you need. Government contract law is a broad field, encompassing multiple sub-specialties and areas of expertise. Do you have a lawyer on staff who can issue spot, handle what he or she can, and then farm out the other matters? If so, finding a lawyer with a particular area of expertise to compliment your in-house lawyer’s skills makes sense. For example, if your in-house lawyer is an expert with contract administration, but you really need someone for the occasional bid protest, then seek out a government contracts litigator. However, and as is more often the case, if you are looking for dedicated support from outside counsel, you likely need a government contract law generalist. You need a lawyer who understands business and government contracts law so he or she can issue spot, prevent problems, draft or review contracts, litigate when necessary, and help you achieve your business goals. This requires the ability to prioritize risks and – most of all – to find business-focused solutions for those risks. Look for lawyers with broad experience, a wide range of representative matters, and an ability to put himself or herself in the shoes of your customers (and regulators). This will help you meet customer needs, assuage customer concerns, and protect your enterprise. Ask questions when interviewing potential lawyers about how they would handle particular problems you face, and make sure the answer addresses how your customers are likely to react and interpret your actions.
QUESTION 3: WHAT SUPPORT SHOULD MY LAWYER HAVE?
You have to trust me on this. I cannot cite you statistics or studies. I can just work from my experience and the experience of people I look up to in the Government Contracts Bar when I assert that government contractors and commercial firms that dabble in government contracting will have the following legal needs at some point in their climb from small through the ranks of the middle market:
– government contracts counseling (which may include SBA rules, but is more broad than that)
– government contracts-focused litigation (e.g., claims and protests);
– compliance counseling;
– corporate transactional;
– and financing.
They are less likely to need commercial litigators or investigation response/defense attorneys, but that is also possible.
I have yet to meet a solo practitioner who can practice at a high level in all of these areas. In my opinion, your lawyer will need some support and the amount of support needed will increase as your business grows, new issues arise, or it gets “big enough to get noticed,” and starts attracting suitors, purchasers, financiers, . . . and lawsuits.
Companies need to ask how much time they have to manage the legal function, and whether relationships with various attorneys and multiple law firms (and the associated pricing structures, billing arrangements and conflicts issues) are worth the time that could otherwise be spent managing the business. You can find very good practitioners in these disciplines with diligent effort, but you need to invest a good bit of time for this structure to work well.
Or, does a more “full service” firm make sense for your company? I am partial to full service firms—that is why I joined one. When used properly, full service firms can cut down on the time and effort companies need to spend managing their lawyers, but there is very important caveat to keep in mind. Companies have to trust that the government contracts attorney they use to manage the relationship will tell them, openly and honestly, if their partners are the “right lawyers” for their specific projects and if not, offer names of other lawyers at other firms who may be worth considering. To be clear, full service firms can do a lot very well. But be wary of any pitch that says “we have the very best lawyers for every type of legal need.”
QUESTION 4: ARE CONNECTIONS WITH THE GOVERNMENT IMPORTANT FOR MY LAWYER TO HAVE?
Many companies hear that various lawyers have good relationships with relevant regulators and the ability to pick up the phone and try to resolve problems informally. That has value because it can get a company heard and give the company a chance (or another chance) to explain its “side of the story” before a more formal or potentially adversarial process begins. But, especially in a practice area like government contracts that boasts so many former government officials, it is important to note that “sweetheart deals” generally do not happen on the basis of relationships alone. Old fashioned “good lawyering” matters.
Were I in the position of hiring outside counsel, I would break this question down into four subparts, in decreasing order of importance to the decision:
(a) does the lawyer have a reputation for quality work and is s/he knowledgeable in the area?
(b) can the lawyer explain how the government will react to alternative courses of actions, why the reactions will happen, and recommend how to manage those interactions before they occur?
(c) does the lawyer have relationships that can be leveraged for the company?
(d) how can those relationships lead to a better outcome for the company?
Relationships matter, but not as much as the quality of the lawyer with the relationships and his or her ability to “think like a regulator” to the benefit of their clients.
QUESTION 5: HOW DO I EVALUATE LAWYER COSTS?
There is no question that legal fees are a concern for growing contractors. There are many ways to analyze these fees. But what follows is the analytical framework that several business leaders have told me they use, and I agree with wholeheartedly. Analyzing legal fees can be accomplished by reviewing the following four categories of need:
1) I am looking for a lawyer to be part of my company’s management, to have input on strategic decisions, to keep me out of trouble and help me grow/prepare for sale/etc. These contractors likely need to focus on finding an “outside general counsel” to be a stable, available strategic advisor and the legal fees should be considered in the same way as salary and incentives for a key company officer are evaluated. You do not want a rotating series of attorneys, but a single point of contact that gets to know your business. That work can be accomplished on a retainer basis with set monthly amounts no matter how many strategic legal questions you might have. Note that these arrangements involve up-front legal spend for the strategic advice, but generally lead to many fewer crises down the road.
2) I have a real problem that is “bet the company” big. This requires the most talented practitioner you can find (and afford) with expertise in the area. This is an area where cost matters less than expertise. The best lawyers in a particular area will be able to help mitigate your risks and keep you in business. That is worth a premium. But do not fall into a trap and believe that price equals quality. Find the best lawyer first, and be willing to pay for him or her in this situation.
3) I have occasional legal needs to fill. If you have the time and the bandwidth to do so, this is an area where seeking proposals can help you reduce costs with a variety of discounts or alternative fee arrangements.
4) I have ongoing compliance obligations where I need help with policies, procedures and periodic audits. This is a great area for lower rate providers with high skill levels to assist. The savings from the lower rates will help preserve cash for other business operations while the higher end capabilities will help prevent future emergencies. And, in the event an emergency does happen, you will have high quality compliance materials already in place both to guide your lawyers working “bet the company” issues, and to help argue for lower penalties and fines under the Federal Sentencing Guidelines for Organizations. Note, this is not an area where the lowest cost should automatically get the work. It is too important an area from a corporate risk management standpoint for that. But there is also no need to pay the high-end rates. This is an area where you may want a highly qualified practitioner, but at a firm without the extreme overhead expenses.
By analyzing these five questions and their various subcomponents, contractors and subcontractors will be in a much better position to select the “right lawyer” for their legal needs.