Who doesn’t enjoy a joke that begins, “An attorney, an accountant, and a CEO walk into a bar…”? But all joking aside, properly managing your credit union’s relationship with outside counsel is no laughing matter.
Credit unions regardless of size need attorneys for issues such as real estate settlements, collections, bankruptcies, contract reviews, compliance documents, and employment issues. Unfortunately, many credit unions fail to effectively manage the relationship they have with their attorney—and waste thousands of
dollars in the process.
But managing your attorney relationship shouldn’t really be that difficult. Follow these five steps and your credit union will reap the benefits of retaining a lawyer:
1. Understand why you need an attorney. While this first step may seem obvious, it’s often overlooked. Before you engage the services of an attorney, you need to know why you need one. Framing the issues is a logical starting point in the counsel relationship.
Are you trying to avoid a problem or is it at your doorstep? What is the substantive issue? Does it involve litigation, contract negotiation, a regulatory problem, or a board governance issue? Is this really an issue for an attorney or your accountant? Are you looking for advice, expertise, technical assistance—or a fall guy? What is the expected work product? Your answers will direct the credit union to the proper resource.
2. Select the right attorney. You wouldn’t go to a podiatrist with an ear infection, so don’t go to a real estate attorney when you need an employment law expert. While an attorney not experienced in a particular area might accept your business, you’ll often pay them to research the issue and get up to speed, resulting in unnecessary billable hours. And experienced credit union specialists are able to share valuable “lessons learned” from other clients who’ve experienced the same issues you’re
facing, even if they can’t share names and details.
Remember that all of the requirements for appropriate third-party vendor due diligence apply to selecting an attorney. From references to data security, your vendor review file should reflect a reasonable investigation into your attorney’s credentials, experience, state licensing status, and business practices.
How do you find the best attorney for your needs? Do your research. This includes checking the law firm’s website and asking directly for an explanation of the attorney’s practice areas and experience. Ask around, particularly ask other credit unions what lawyers they rely on to address similar issues.
Finally, interview attorneys. Do they seem to know what they’re talking about? Do they represent other credit unions? Never overlook an important question—do you believe the person you’re interviewing has the necessary interpersonal skills?
And make sure they don’t have a conflict of interest, which means they represent someone or an entity with an interest adverse to yours. It’s really the attorney’s duty to determine the possibility of a conflict and disclose that information to you.