Rainmaking. This is a growing subject of conversation amongst lawyers in this century as more lawyers realize that law practice is law business. Rainmaking involves marketing. One of the simplest and effective definitions of marketing that I have ever read is ‘Marketing is focusing on your customers’ [or clients’] needs rather than your product or service – and profit is the by-product.’ Yes, people will pay you either for pleasure or for taking away a pain. So what are the legal needs of existing and potential clients in business?
Challenges Faced by Businesses
Each business has challenges peculiar to the sector or industry in which it operates and its regulatory framework. This is something a lawyer would have to study in relation to the particular client. But there are challenges that are pretty general to businesses and especially businesses operating in Nigeria, regardless of industry.
The best way to figure this out would be to ask those who manage businesses. According to the Managing Director of an IT-solutions company in Nigeria, some challenges faced by businesses include poor country credit rating which has seen collapse of the credit system, direct foreign exchange (FX) impact, and the subsisting recession shocks on businesses.
For businesses that import and export goods and services relevant for their business, FX-savvy lawyers can advise them on ways to mitigate risks in FX transactions. A business manager may not always contact the lawyer when transactions are in the formative stages. That is why prudent companies hire in-house lawyers. Companies with in-house lawyers maximize their utility by keeping them in the loop when transactions are being considered.
As an in-house lawyer, if your company does business that involves import or export, be alert to FX risks. When drafting contracts with international business partners please include FX-related clauses that can tackle this issue according to the specific needs of the company. This is because it is said that when FX markets move significantly, boards can be very unforgiving of CFOs when a rate drops by 10% but the risks weren’t hedged.
An Information Technology Consultant mentions some other challenges. One is risk appetite, such that most companies bypass some processes and consummate a transaction to attract more business. When there are issues, smart customers leverage on those loopholes. These eventually become legal issues. Also poor documentation, poor communication between companies and their customers, poor staff training, ignorance of the law, and failure to seek legal advice can create issues.
These are valid points. Yes, the entrepreneurial spirit says ‘take your risk for there is no amount of risk that is too much for you to take’. But what kind of risks should entrepreneurs take? I propose calculated risks with an understanding of the market. Why? Because if this approach is adopted you may not frequently need a lawyer to put out fires for you. As lawyers, this is a good point to communicate to clients. It shows we care about their interest.
Poor documentation makes it difficult for a lawyer to act on behalf of a client in cases where evidence is crucial. So help your lawyer or future lawyer to help you. Just approach the request for documentation in a polite and tactful manner so you don’t alienate the business partner—though any honest business partner would have no qualms with documentation.
Regarding poor communication, this causes problems in all industries but seems especially sensitive in the financial sector. It has been said that some banks reconstruct loans with new interest rates that put a customer’s account into a debit balance over time without advance notice to the customer. This cannot be right because section 2.1 of the Guide to Charges by Banks and Other Financial Institutions in Nigeria 2017 mandates a bank to notify a customer of a new interest rate at least 10 business days (5 business days for micro-finance banks) before the application of the new rate. Most litigation cases are a result of poor communication. Business executives should understand regulation in their industry and the implications for the business. Please don’t be reluctant to call in external expertise.
According to a cross-section of lawyers in Nigeria, some other challenges faced by companies include litigation and debt recovery issues (including tax defence), and business advisory issues. The latter includes obtaining licenses and generally dealing with government agencies and regulatory bodies; legal documentation for business operation, partnerships, and contracts; and intellectual property (IP) protection. There are also company secretarial needs – a major concern of corporate clients is that their books and periodic returns to the Corporate Affairs Commission and other regulatory agencies should be up to date and meet regulatory standards. If annual returns are not up to date, for example, this could be a setback when a company bids for contracts, or applies for certain loans or permits. That’s not good for business. Lawyers need advanced record-keeping and organization skills to excel in this regard.
Finally, access to finance is a huge challenge—Small and Medium Enterprises (SMEs) may not have enough money to build their business and expand. Entrepreneurs can take advantage of funding initiatives in the public and private sector. These include the Bank of Industry, Development Bank of Nigeria, the French Development Agency, Tony Elumelu Foundation, etc. Also take advantage of the Secured Transactions in Movable Assets Act 2017 (aka Collateral Registry Act), which codified CBN’s web-based Collateral Registry system initiated in 2015. Movable assets under the Collateral Registry Regulation include equipment, accounts receivable, household items, farm products, motor vehicles etc. Through this system, SMEs, usually without established credit history or real property as security, can obtain credit secured by their movable assets. Please note that only regulated financial institutions may act as secured creditors under this Collateral Registry Regulation.
Of course, lawyers may assist with structuring SMEs in a legally compliant manner to enable them access finance – from business registration to preparing papers for loans.
Wrapping It Up
It is not all challenges faced by businesses that a lawyer may be best placed to solve. But there are numerous business needs which a lawyer can fill once clients are willing to listen. As lawyers—whether external or in-house counsel—let’s listen to and educate our clients. Happy clients who know that you care will gladly show you the money.
Uchechi Anyanele practices law in Lagos, Nigeria. Outside her legal work, she enjoys reading books on self-improvement, proofreading written text, and absorbing musical lyrics. She is passionate about continuous improvement for lawyers.
 Brian Sher, What Rich People Know & Desperately Want to Keep Secret, (2000) 105
 Bea Arthur, ‘From Dreaming To Done: How To Get Your Business Off The Ground’ (Forbes Webinar, 25 July 2018) <https://event.on24.com> accessed on 25 July 2018
 In an interview on 27 June 2018
 One of these is FX hedging. An FX hedge is a transaction implemented by a foreign exchange trader or investor to protect an existing or anticipated position from an unwanted move in exchange rates. See <https://www.investopedia.com/terms/forex/f/forex/hedge-and-currency-hedging-strategy.asp> accessed 14 July 2018
 Jake Gosheron, ‘How Companies With Foreign Exchange Risk Can Protect Their Business From Adverse Market Moves’ (Alliott Group, 1 June 2017)< https://www.alliottgroup.net/practice-management-resources-for-owner-managed-firms/how-to-protect-business-from-foreign-exchange-risk/> accessed 14 July 2018; see also <https://instafxng.com>
 Engineer Austin Odoemene in an interview on 1 July 2018
 You may see also Jimi Osheidu, ‘5 Different Ways to Fund Your SME in Nigeria’ (VConnect Blog, 11 May 2017) <blog.vconnect.com> accessed 1 July 2018
 Senator Ihenyen, in an interview on 20 May 2018