The decision to go to law school was an easy one for me; it had been my dream since I was 12 years old. What I didn’t plan for was how this dream would impact how I perceived the business world. Law school not only prepared me for the legal profession, but it also gave me a system of best practices that I use today as an entrepreneur.
A whopping 80 percent of new businesses fail within 18 months. If you want to be in the 20 percent that succeed, you need every possible tool available—and law school offers many of the most useful ones.
Here are five key law school lessons that helped me start and grow a successful business:
Plan for Your Desired Results
Lawyers win cases by assessing situations, deciding on desirable outcomes, and building strategies to achieve those results. In business, this means understanding your issues, forming your goals and then strategically planning how to achieve them. Everything you do should lead you to your goals.
In law school, a single exam determined my grade every semester. If I wanted to gain high marks, I had to actively plan my semester to achieve my goal. In business, every quarterly result is your semester grade. If you actively plan to reach your milestones, you will see more long-term success.
Assess and Proactively Address Risk
Entrepreneurs deal with risk on a daily basis. Unfortunately, some entrepreneurs don’t plan for ways to mitigate those risks. Instead, they hope for the best. This puts them at a disadvantage because they start to become reactive, and that leads to rushed decision-making. By proactively managing risk, you can make calculated, thoughtful decisions. These types of decisions are the foundation of all successful companies.
Law school makes a person to see risk everywhere. If several lawyers gather in a grocery store, they’ll start making lists of hazards—it’s sad but true. But this type of risk assessment is critical for entrepreneurs. Awareness is the first step; only then you can start to proactively protect your business.
Value Your Emotional Intelligence
The ability to use emotional information to make decisions is a critical skill. When drafting agreements, a lawyer’s job is to craft language that is as favorable to the client as possible. When opposing counsel receives an agreement, he knows it’s not personal; it’s what’s in the client’s best interest. And he does the same thing.
Being passionate about your business is a great attribute, and it’s necessary for success. But passionate business owners often lose sight of the feelings and viewpoints of others. This often harms business relationships. Thinking about how others feel and perceive things will position you for healthier relationships and give you peace of mind. I suggest taking some time to develop your emotional intelligence—it’s a trait necessary to drive success.
Get to the Root of Problems
Every lawyer knows that the key to understanding a case is being able to accurately identify the problem. Knowing what problem you are trying to solve will save you time and allow for proper strategy formulation.
Too many entrepreneurs treat the symptoms of a problem rather than the root cause. Look past the details and identify the source of the problem so you can take action as quickly and efficiently as possible. By wasting your time putting out fires—rather than getting rid of the matches—you lose focus on the big picture.
Understand the Why
A lawyer needs to ask a simple question—why?—after making a decision in reference to a client. If we can’t answer the question, then we aren’t properly preparing for that client. This could lead to major sanctions. Similarly, as an entrepreneur, not answering the why can lead to major missteps.
After making a decision, ask yourself why you settled on this solution. Understanding the “why” will equip you for future decisions, protect you against yourself, and create transparency if you are reporting to a board of directors. Entrepreneurs too often rely on gut instinct. This can occasionally work, but most of the time, understanding the why, and being equipped to explain it, keeps the decision-making process transparent and consistent.
My law school training has helped me develop an entrepreneurial mindset. I’m able to understand how my business needs to grow and what barriers might creep up. Not all entrepreneurs need a law degree, but thinking like a lawyer can give you the tools you need to protect and grow your business.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
Image credit: CC by Embejada de los Estados Unidos en Uruguay