Creativity is another critical aspect of helping the client achieve its business goals. To be truly successful, you must be creative . . . to think “out of the box.” One of my partners, Ron Wilder, has been extremely successful in doing that. I recall a situation in which a big corporate client had a commercial lease that everybody said was unbreakable. Ron thought about it for a while, we brainstormed about it, and he came up with maybe ten theories, which would enable the company to get out of the contract. At the outset of the process, no theory was too silly to exclude. Then we did preliminary research on all ten theories. Three or four of them were discarded because they were so far off the wall that they just weren’t reasonable. We winnowed the list down and came up with two or three that might work. We did further research on those legal theories and on the underlying facts and came up with something we thought would work. It really astounded the lessor that there was a reasonable theory by which we could avoid this onerous agreement. When we first called him, he laughed and thought it was ridiculous. He said, “It’s a ‘hell or high water’ financing lease with a big bank that was written by a Wall Street law firm to be unbreakable.” We sent him a memo supporting our position, and he grudgingly gave us a lot of respect. Ultimately, the client was able to get out of this lease by making a payment of less than 10% of the $4 million that was due for the remaining term of the lease. Since then this client calls Ron whenever he has a difficult contractual issue.
In another situation our client wanted to acquire another company, and it turned into a hostile takeover battle. The target company had a “poison pill” – a nasty device that makes it very expensive to go forward with a hostile takeover. We took the time to analyze the poison pill in excruciating detail and found what looked like a way to avoid the adverse impact if we could get control of the company, change the board of directors and redeem the pill by 5 p.m. all on the same day. We went to the client and talked about what we had found and the risks involved. If it turned out that our approach was challenged in court, as it likely would be, and the judge found against us – and we would be before a judge in the hometown of the target company who might not be entirely objective – it would be disastrous for our client. The client had a reasonable appetite for risk and decided that if we had confidence in our reading of the poison pill, we should go for it. So we did. We mapped out something similar to a military campaign. One minute after midnight we closed our tender offer. We had people stationed in the courts in three different states poised to file and/or respond to lawsuits, and we had people at the securities depositories to get the stock that we had bought in the tender offer transferred and get proxies for that stock. We were able to replace the board of directors with new directors and redeem the poison pill with hours to spare. But you’re always working hand-in-hand with the client, making sure the client is on board, and it’s not the lawyer running the show. The client ultimately has to make the decisions.
What I’m trying to show with these examples is the importance of being creative and also being confident in your conclusion – feeling comfortable with yourself and the advice you’re giving, and having some measure of boldness to take risks to achieve a result.