Yet Another Reminder For Why You Don't Let Your Lawyers Make Business Decisions

from the hammers-and-nails dept

One of the common themes around here is that it's bad when you let your lawyers make business decisions. Why? Because lawyers understand the law, and they understand how to use the law -- but they don't often think through the business consequences of using the law. Often, in fact, it's better for business not to use the laws -- even if you can. This has only gotten worse in the internet age -- where using the law to bully is all too often exposed for ridicule, making the impact on business even more negative. However, many companies still have a hard time learning this lesson, and the lawyers are still looking at every situation with their legal hammer as if it's a nail.

The latest such example occurred over the weekend with the Consumerist blog. Last week, the site had an informative, but not particularly earth-shattering, post about 22 "confessions" of a former Dell sales manager, basically providing some good advice for people buying Dell (or, in some cases, other) computers. On Saturday, a Dell lawyer threatened the Consumerist and demanded the site take the message down. Of course, what happens? For all the hype it got, you probably already know: Digg, Slashdot and Fark all picked up the story of the takedown request -- and Dell was forced to apologize and admit it had screwed up (yet again). Of course, this is the type of situation that companies should know enough to avoid already if they stopped focusing on having the lawyers do what they can do under the law, and focused more on what's best for business. This isn't to say that lawyers can't make business decisions -- but that just because you can do something under the law, it's important for anyone (lawyer or not) to take into account the overall impact on the business.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    dorpus, Jun 18th, 2007 @ 6:05am

    Do Lawyers Run the Twinkie Business?

    This is a serious question. I have lived in Alabama for a year and never found a store in the state that sells Twinkies. I just spent a weekend at the beach, spending 5 hours each way driving through back roads to get there, and I could not find a single service station that sells it either.

    You can find Starbucks stores in the most unlikely places in backwoods Alabama, but not Twinkies. Did lawyers do something funny to "outlaw" them here?

     

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  2.  
    identicon
    bgalls, Jun 18th, 2007 @ 6:11am

    Re: Do Lawyers Run the Twinkie Business?

    Is it a trans fat thing?

     

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  3.  
    identicon
    dorpus, Jun 18th, 2007 @ 6:14am

    Re: Re: Do Lawyers Run the Twinkie Business?

    No, it is one of the healthier junk foods. If you want trans fats, son, Alabama has plenty of them.

     

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  4.  
    identicon
    Thomason, Jun 18th, 2007 @ 6:29am

    deciders

    I suppose the founders of DHL and MySpace don't understand business.

     

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  5.  
    identicon
    Anonymous Coward, Jun 18th, 2007 @ 6:42am

    Re: Do Lawyers Run the Twinkie Business?

    If that is the case then they also run Dr. Pepper cuz about 6 months ago Cherry/Vanilla Dr. Pepper completley vanished in Eastern North Carolina. Weired.

     

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  6.  
    identicon
    Overcast, Jun 18th, 2007 @ 7:01am

    A good lawyer understands that. I used to work for a law firm, actually one of the more successful lawyers in my area.

    He chose to not run a big corporate slime pit, but he hired a business manager to deal with business decisions and strategy for him. He openly admitted, he knew the law - but as an intelligent person, he knew it was wise to leave business to a professional.

    I guess it's what separates a good, successful law practice from the bad ones.

     

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  7.  
    icon
    Eric Goldman (profile), Jun 18th, 2007 @ 7:11am

    Who made the decision?

    A good lawyer wouldn't proceed without permission from the client. Now, lawyers can influence that decision and need to avoid swaying a client into a bad business decision. However, it's comparatively rare when a lawyer makes a business decision unilaterally. Indeed, not atypically, lawyers have strongly protested a bad business decision but get vetoed and told to proceed anyway. In those cases, the lawyer takes the fall for the bad result, even if the lawyer tried to steer the client towards the light. Eric.

     

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  8.  
    identicon
    Vincent Clement, Jun 18th, 2007 @ 7:34am

    Re: Who made the decision?

    You are assuming that Dell has good lawyers.

     

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  9.  
    identicon
    Susheel Daswani, Jun 18th, 2007 @ 7:41am

    You need a new title....

    The title should be "Yet Another Reminder For Why You Don't Let Your Business Managers Make Business Decisions". How many in-house lawyers at Dell have broad executive authority? I assume not many. Lawyers are known as 'counselors' since they provide advice. Business managers usually call them (whether external or in-house) when they have a problem and want to know what their legal options are. It is unusual for a lawyer to commandeer the business making process. Mike blames lawyers who can't make business decisions. It it much more probable that we have business managers who don't know their own businesses, and decide to rely on the advice of their lawyer. Perhaps lawyers often give bad advice, but given that business managers ultimately make business decisions, we must hark back to Obi-Wan Kenobi: "Who's the more foolish: The fool, or the fool who follows him?"

     

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  10.  
    identicon
    comboman, Jun 18th, 2007 @ 7:42am

    Lawyers DO understand business

    Lawyers DO understand business, they're just in a different business than their clients. Is a mechanic going to recommend unnecessary repairs? Is a plastic surgeon going to recommend unnecessary procedures? Is a lawyer going to recommend unnecessary lawsuits? You know the answers.

     

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  11.  
    identicon
    Stephen, Jun 18th, 2007 @ 8:12am

    sword, lash, voice, cash

    The man who founded the Umayyad dynasty, Mu'awiyah, had a great saying: I will use sword if I must, but only after I try the lash, and I will use the lash only after I try the voice, and I will use the voice only after try cash.

    At no point does he mention using lawyers.

     

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  12.  
    identicon
    Joe Smith, Jun 18th, 2007 @ 8:13am

    Re: Re: Who made the decision?

    Most managers will defer to a wet behind the ears junior lawyer.

    Lawyers are trained to err on the side of over-stating the client's case on the theory that you can always back off an over-stated position but it is much harder to recover from under stating your position. On top of that "aggressiveness" is seen as evidence of being keen and well motivated. Combine all of that with a lack of maturity and the arrogance that most law students have and no one should be surprised when lawyers write that kind of letter.

    (Some of my best friends are lawyers but there is no reason I can't be realistic about them).

     

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  13.  
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    Jerry Fletcher, Jun 18th, 2007 @ 8:20am

    You're missing the big picture!

    Forget about the stupid lawyers people! Can't you see what's going on here? Who knows how deep the Twinkie/Cherry-Vanilla Dr. Pepper conspiracy goes? I for one am abandoning the city for my fortified wilderness shelter today. Don't try to find me. Good luck to you all.

     

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  14.  
    identicon
    Sushi, Jun 18th, 2007 @ 10:24am

    Give Dell some credit

    They could've easily pushed harder, and then go quiet for the world to forget about. Instead they came out and openly apologize. Swallowing their pride is a pretty hard thing for companies to do these days it seems like.

     

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  15.  
    identicon
    Benchman, Jun 18th, 2007 @ 11:14am

    Some Lawyers Get It

    If you read through the email exchange between the Dell lawyer and the Consumerist lawyer, the Consumerist lawyer points out and advises the Dell lawyer to not push any harder for a takedown as it could lead to lots of attention. The Dell lawyer dismissed this notion...

     

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  16.  
    identicon
    ProofReader, Jun 18th, 2007 @ 2:00pm

    Just WHICH side are you on?

    You said: "Often, in fact, it's better for business not to use the laws -- even if you can."

    Didn't you mean "use the lawyers"? Or was this some sort of freudian slip?

    Of course, many modern incarnations of burning Rome...er, corporations (e.g., Enron) didn't "use laws", at least not the ones that weren't in their favor.

    BTW, weren't the imperial lawyers the first in line for "the blade" during that everso snippy French Revolution? Maybe they had the right approach...

     

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  17.  
    identicon
    Charles Griswold, Jun 18th, 2007 @ 10:00pm

    Re: Just WHICH side are you on?

    Didn't you mean "use the lawyers"? Or was this some sort of freudian slip?
    I'm pretty sure he meant what he said. The laws in question would be the . . . errr . . . questionable ones that the Dell lawyers used (or attempted to use) when they issued the threats to The Consumerist.

     

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  18.  
    identicon
    IronChef, Jun 26th, 2007 @ 2:05am

    Yeech

    I posted an analysis on "What Dell needs to do to re-gain its #1 market position" a few weeks ago... Its simple, really- cultivate a culture... Understand what your end user wants. Instead of hiring expensive lawyers and consulting firms, increase the flow of communication between your senior management and the customer facing employees.

     

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