Top 3 Reasons Why A Lawyer Needs To Understand The Client's Business Strategy.

Top 3 Reasons Why A Lawyer Needs To Understand The Client's Business Strategy.Let’s say you are one of the lucky lawyers who is consulted by actual businessmen who make money. Lucky because not all lawyers can independently generate business. Only some do.

Smart businessmen will usually come before they get into trouble – they will also pay better because they care more about protecting their business than saving a bit of money by going to an ineffective lawyer. They can also afford to pay better, as they take good care of their booming business and do not have to pay out big-buck judgment day compensations and/or bribes here and there (we certainly hope so).

They can also focus on their actual business rather than running after ten regulatory bodies, banks and investors trying to save their neck for non-compliances. Those are the clean, smart, focused, well paying sophisticated entrepreneurs – every lawyer’s dream clientèle. If you see them, help them with everything you have. An important thing to note here: entrepreneurs are mostly frustrated after initially trying to work with a majority of lawyers and now stay miles away from the average Indian lawyer. They use their trusted networks to find the ones who understand their business and provide startup friendly services.

I know most of my readers are from sophisticated law schools, some of you are fancy mooters and great debaters, and maybe toppers read this blog too? Well, how many of you understand the basics of business? Even the simplest concepts like revenue models discounted cash flow, burn rate, or project management is not understood! Talk about vocational studies – despite all your knowledge of takeover code and contract act – you can’t even join in a conversation between a couple of new age (or old age) CEOs talking about their business strategy.

Download Now

To top that, business models and processes have changed like crazy. The new age businesses, where the real growth seems to be happening, carry out very different sort of activities. If you are their lawyer, you’d have to protect them in the course of those businesses. If you don’t understand their world by stepping into their shoes, and you are trying to draft their contracts, End User License Agreement or website usage policy, may the universe have mercy on the soul of your client.


Well, the smart clients figure out quickly – and move on. Even if you are in a firm that advises businessmen, you could be the star just if you knew how businessmen think, what value they seek, and what they want you to understand. If you can speak their language too, then there’s nothing like it.

Traditionally, this is the example cited to explain why lawyers need to understand business strategy. Think of a business making low-cost products, on thin margins, and with lots of competitors – it will need more legal support to protect it from product liability suits, finetuned distributor agreements, strong trademark protection. Think of another business, with a niche and patented product, not much competition – it will spend more on Intellectual Property creation and enforcement.

Here are some reasons why a business lawyer in this day and time can’t afford to not learn how business is done:

Reason #1

Clients don’t trust lawyers who don’t have understanding of their industry – this is why experience is highly valued

(c) Museums Sheffield; Supplied by The Public Catalogue Foundation
(c) Museums Sheffield; Supplied by The Public Catalogue Foundation

He has come to you so that you can protect his business. If you don’t get how this business is done, he will never trust you. Everyone wants God and lawyers to understand things without having said anything. If you don’t know how business is done, you wouldn’t even ask the right questions.

Quick tip: before talking to your client at length about the services he wants, figure out how business is done in his domain or industry. Talk to those who may have some idea. Tell him what he has not thought of or doesn’t know. And remember that every good businessman knows some law.

Reason #2

In the beginning of your career, you need to establish your expertise with every client

young lawyer

Heck, some clients will even take pride in knowing more than you. If you let them get away thinking that way, you are screwed. Your bills are even more screwed.

They need to understand that you are the expert – and the only way they’ll understand this is if you can tell them how the law you are talking about is connected to their business. That is the job of a lawyer – to explain to him how his business realities interact with the law. If you don’t get the business part, you will simply not be effective.

Quick tip: Listen to your client – before paying money to come to you, he or she is most likely to have thought of some strategy. If you don’t get that out first and deal with it, it will come in the way of what you need to do eventually.

Reason 3#

This is how you compete with more experienced lawyers and brand names – by having superior understanding of a niche

business lawyers

There would always be more experienced lawyers. You are competing with them for clients. More experienced lawyers are not preferred because they know more law! The laws are the same for all the lawyers. It is just that because they have been around for long, they understand a business better. People in the business find it easy to work with them.

However, something has changed over time – as I said earlier, there are some very different sort of new age businesses around these days – and even the most of the rest are also being forced to change the way they do things quite rapidly. E-commerce, for example has shaken traditional business models across geography and business size. Many young lawyers are taking advantage of the rapidly changing business scenario, by building in-depth understanding of profitable business niches. We saw this happening in Regulatory Litigation in the last decade. This happened with startups, this is still taking place with cyber crime practice. Now we have law firms specializing in education, and startups focusing just on business registration and licenses! Some lawyers have built empires just by doing labour law compliances.

If you are a young, enterprising lawyer – that’s your market. Take an emerging area and become an expert at that.



  1. […] Why a lawyer needs to understand Client’s business? […]


Please enter your comment!
Please enter your name here