Risks, Goals, and Pictographs : Lawyering to the Social Entrepreneur

Scholars have argued that transactional lawyers add value by mitigating the potential for post-transaction litigation, reducing transaction costs, acting as reputational intermediaries, and lowering regulatory costs. Effective transactional attorneys understand their clients' businesses and the industries or contexts in which those businesses operate. Applied to the start-up social enterprise context, understanding the client includes understanding the founders' values, preferences, and proclivity for risk. The novel transactions and innovative solutions pursued by emerging social entrepreneurs may not lend themselves well to risk avoidance. For example, new corporate forms such as the benefit corporation are untested, yet appeal to many social entrepreneurs who wish to use a single entity to pursue dual missions. Novelty in a transaction or governance arrangement, as opposed to precedent, means that the risk of litigation or regulatory inquiry may rise. However, a lawyer — and particularly the student attorney without practice experience — may be prone to risk aversion. Lawyers are often described by themselves and by others as “conservative, risk-averse, precedent-bound, and wedded to a narrow, legalistic range of problem solving strategies.” On one hand, risk aversion can inhibit a lawyer's ability to “think outside the box” and take the innovative approaches that their social enterprise clients need. On the other hand, a lawyer's risk aversion may add value to a social enterprise to the extent that the lawyer can be a “sounding board to help clients balance risk-prone ideas.”In this essay, I discuss (i) plausible risk profiles of attorneys and their social enterprise clients; (ii) a client-centered lawyering approach that deters a new or student attorney from projecting her own risk aversion onto her clients and allows her to act as a “sounding board” armed with legal analysis to help her client make informed decisions; and (iii) one of the counseling tools that facilitates this client-centered approach. The counseling tool — a pictograph, or visual representation that communicates three-dimensional qualitative information — dictates that the client's preferences take priority over the attorney's risk profile, but also allows the attorney to present and frame the advantages and disadvantages of a particular decision point in relation to the client's expressed goals