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Role of Counsel in Strategic and Business Planning

I was recently asked to provide my thoughts on the role of the general counsel position, regardless of whether the position is filled by an in-house lawyer or the services are provided by a trusted business counselor who is regularly employed by an outside law firm acting as the legal advisor to the company. The answer to this question, like many others, is "it depends" and the best way to explain what thoughtful attorneys can do for their clients is to look at how they might fit into the particular context in which their advice is being requested.

For example, let's look at the role of counsel in strategic and business planning for the client. While the ultimate responsibility for the preparation and content of the business plan lies with the client's senior management team, in-house counsel and attorneys from outside law firms should be closely involved in the drafting process. Obviously, one of the key challenges for any company in embarking on new business activities is identifying and overcoming the legal and regulatory hurdles created by domestic and foreign governments. In many cases, a company will not be able to enter a new foreign market unless and until it is able to identify and overcome the requirements of foreign investment and/or technology transfer laws, a process that will often delay the start of a new investment project or impact the costs associated with the investment.

Counsel can also provide input on laws that may impact proposed new sales or manufacturing activities and, of course, expert advice must be obtained when the company's products must be vetted by governmental approval processes before they can be marketed and sold. In addition, if and when the material in the business plan is being used as part of presentations to investors and other outside parties, counsel should be involved to ensure that the information conforms to applicable regulatory requirements (e.g., securities laws) and does not unwittingly compromise the confidentiality of the company's proprietary information.

Reviewing and drafting business plans are not skills often taught in law schools, so it is important for business attorneys to educate themselves about the planning process as quickly as possible in order to provide maximum value to their clients. In order to get started on establishing and sharpening their skills as a business planner, attorneys should read two or three books on "how to write a business plan", preferably books written by experienced drafters and readers, such as veteran venture capitalists who have taken the time to write about what they see as being the most important points that need to be covered by entrepreneurs looking for funding.

The second step is to actually read a pile of business plans--or similar presentations, such as prospectuses filed with the Securities and Exchange Commission--to get a feel for how drafters actually organize the material. While there is no universal standard for the sequence of words in a business plan, there definitely are some better ways to go about doing it. If possible, attorneys should select samples from companies engaged in businesses similar to those conducted by their clients since this will help them identify topics that should be covered in a client's business plan.

The third step is for the attorney to be sure that he or she is comfortable with the basics of accounting and finance since so much of a typical business plan involves "numbers", either historical data on performance that needs to be interpreted, or forecasts of future results that need to framed into a context of "assumptions" regarding general economic and business conditions and the progress that client intends to make in operational areas such as product development, expanding manufacturing capabilities and contracting with independent distributors to assist in sales and marketing efforts.

Finally, the attorney needs to sit down with the appropriate people from the client and gain a full understanding of how the client's business works. This means learning about the relevant technology and the sequence of steps that are followed from the time a new product idea emerges to the point where the finished product hits the market. This step will go a lot easier if the attorney has already reviewed business plans of similar companies, as suggested above, since the attorney can ask sharper, more focused, questions and will already have a basic understanding of industry or technical jargon.

Like preparing for an exam in law school, the attorney should pull together all that he or she has learned from the homework above to create a customized checklist that can be used whenever the opportunity to draft or review a business plan for a client arises. Such a checklist can provide the attorney with piece of mind that all key issues will be recalled and discussed with the client, even if a particular plan is to be silent on the topic.

For example, the following prompts, which are taken from a more detailed checklist included in my publications identified below, can be used to be sure that marketing and sales activities are fully and clearly discussed:

-- Describe the company's overall marketing strategies and objectives (e.g., how is the company hoping to be perceived in the market and what are its goals with respect to market share)

-- Describe the company's strategies with respect to distribution of its products and services (e.g., direct sales, independent sales representatives, distribution agreements with third parties, etc.)

-- Describe the company's promotion strategies

-- Describe the company pricing strategies, including anticipated changes as brand acceptance develops

-- Identify and describe the company's main "sales pitch" (i.e. the main messaging in its sales and promotion activities)

-- Describe the company's strategies with respect to service and support of customers and distributors

-- Describe the company's sales strategies and activities (e.g., customer identification, sales staffing requirements and compensation, and sales goals and measures)

Alan S. Gutterman is the founder and principal of Gutterman Law & Business (, a leading provider of timely and practical legal and business information for attorneys, other professionals and executives in the form of books, online content, newsletters, programs, training and consulting services. Mr. Gutterman has three decades of experience as a partner and senior counsel with internationally recognized law firms counseling small and large business enterprises in the areas of general corporate and securities matters, venture capital, mergers and acquisitions, international law and transactions, strategic business alliances, technology transfers and intellectual property, and has also held senior management positions with several technology-based businesses including service as the chief legal officer of a leading international distributor of IT products headquartered in Silicon Valley and as the chief operating officer of an emerging broadband media company. All editions of the Business Counselor Advisor are compiled into Business Counselor Update, which is released monthly and available along with other publications by Mr. Gutterman on the West Web site or at Westlaw Next at Business Counselor. Mr. Gutterman can be reached at

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