How to be a better business leader by thinking like a lawyer
Can a practicing lawyer be a good leader? Maybe or maybe not.
What we are talking about are the mental models that guide an attorney’s decisions. It is not necessary to have practical knowledge, but rather legal principles that can aid in the management of small business growth.
Here are 3 legal concepts that are useful for growing businesses:
- Due process
It means providing notice and an opportunity to be heard and is based on the principle of fairness.
Small businesses often lack clear job descriptions, performance metrics, standard processes, or evaluation reviews. It may confuse employees as to what they should do, whether they are meeting targets, or how to get back on track when they get off it. Situations like these may lead employers to act when it is too late.
To adapt to the concept of due process in business, we can rephrase it as notice and opportunity to perform. Give clear instructions on the job expectations and opportunities to perform and improve.
Sometimes the lack of process can be intentional as founders fear that creating a system will bureaucratize the business, a fear that is both reasonable and counterproductive. As your business grows, it needs to grow out of the “all hands on deck” mentality and more towards clarity of roles.
- Generalist judges
Judges do not specialize in a particular body of law, but rather they exercise general subject matter jurisdiction. Hence, they are generalists.
CEOs are also generalists, in the sense that they are not functional experts, but they make key decisions regarding various functions. It takes a lot of confidence to ask someone for clarification when you don’t know much about that subject.
For example, the CEO may not know the technical aspects of software, but they rely on the technical experts, such as the software engineer, to provide the CEO with the required information to make the decision.
- Precedent
When a judge gives the verdict, she/he is doing two things. Firstly, by applying the law even-handedly and secondly, by setting a precedent for future actions.
Let’s look at a case in the US where a bank was sued because its teller refused to pay the robber who took a customer hostage and was subsequently killed by the robber. The small payment would’ve saved a life, so it would make sense that the court sided with the plaintiff, but the court sided with the bank. Reason? Even though paying the ransom was the right thing to do, the court reasoned that ruling otherwise would “encourage the use of hostage” as robbers would know that banks are required to pay a ransom.
Similarly, business leaders make various decisions and negotiate with different stakeholders. Some stakeholders may receive special treatment, but consider that others may come to discover it and make similar demands. The leader must now justify the disparate treatment.
As business owners and entrepreneurs, you are constantly seeking concepts that help your businesses grow and evolve. And, we can confidently say that adding these principles- developed over hundreds of years of jurisprudence- to your cognitive process will be benefitting.
Try them the next time you are about to take a decision and see yourself the results!
