When I am estimating costs for a project for prospective clients, particularly those new to the formation of business entities and deal-doing, a common source of confusion is why there needs to be a fee paid to my law firm as well as to a corporate service company like CT Corporation or CSC. So, I thought it would be useful to briefly outline the different roles that each of us plays in the creation and maintenance of entities.
I am very much a member of the target audience of Billions, the Showtime drama about the intersection of law and finance in New York. As a corporate lawyer with the professional background to decipher at least some of the dense jargon, I sometimes have to suspend disbelief at the plot twists, including a U.S. Attorney who doesn’t recuse himself from a criminal investigation of a hedge fund that employs his wife, as well as a coordinated FBI mass arrest of politicians at a funeral service.
On Twitter recently, a journalist asked for suggestions from other journalists on what advice one should give to college students looking to pursue that field. The TV critic Emily Nussbaum replied “I tell them not to take advice from anyone over 50, bc the industry has changed so much that our career paths aren’t replicable and our advice doesn’t match the landscape.” Is the same true for established lawyers advising students considering law as a career? (If true, I have about a year and a half left, as of this writing, in which I am capable of providing relevant and useful guidance to the young.)
Over the holidays, I finally got around to reading Bad Blood, the story of the rise and fall of the blood testing startup Theranos and its founder, Elizabeth Holmes, written by the Wall Street Journal investigative reporter, John Carreyrou, who broke the story that led to the company’s downfall. I cannot recommend the book more highly. However, you’re not here for book reviews, so let’s move on.
In a recent transaction that I worked on – obviously, I can’t give too much detail to protect client confidentiality – I noticed a weird dynamic. In a typical negotiation, when the lawyers from each side are speaking without the principals present, there is some degree of emotional detachment from the ultimate outcome, even though each attorney knows his or her role is to represent the client’s interest. Lawyers will say, for example, that it’s not worth continuing to argue about a particular bone of contention because it is a “business issue” that needs to be worked out by the principals. However, in this transaction, the other attorney, though he was unfailingly polite and even-keeled, would make fairly routine requests from our side seem thoroughly unreasonable, putting me on the defensive.