Gretchen Jankowski Of Buchanan Ingersoll & Rooney On The Top 5 Mistakes Businesses Make Without Legal Counsel
An Interview With Chad Silverstein
Ignoring demand letters
Legal problems do not go away by putting demand letters into one’s revolving file. A demand letter is a formal request to resolve a dispute on specific terms. Proactively addressing these is imperative. The time to resolve an issue is not after the lawsuit has been filed.
In today’s fast-paced business world, the complexity of legal matters can often be overlooked, leading to significant repercussions for businesses of all sizes. From startup ventures to established corporations, the absence of legal guidance can result in critical errors that affect growth, operations, and sustainability. These mistakes range from issues with contracts and intellectual property to compliance and employment law, each carrying the potential for financial loss and reputational damage. I had the pleasure of interviewing Gretchen Jankowski.
Gretchen Jankowski is a member of the Firm’s Board of Directors, a Shareholder and Co-Chair of the Litigation Section at Buchanan Ingersoll & Rooney. Gretchen has a national practice with a depth of experience in complex commercial and business disputes, antitrust and trade regulation, class action defense, unfair competition, false advertising, franchising, securities across numerous industries including technology, healthcare, energy, aerospace, consumer products and manufacturing. She has tried jury, bench, and injunction cases across the country in multiple state and federal courts as well as in private arbitrations, secured favorable settlements for clients, and has handled significant, bet-the-company litigation matters.
Thank you for joining us. To start, could you share your “origin story” with our readers? How did you begin your career? What challenges did you face in the early days? How did you overcome them?
I began my career at an AMLaw 100 firm. I chose that Firm because of its ranking without understanding the culture, its connectivity (or lack thereof) to the local legal market or the types of cases I would be working on. I was so happy to be hired that I never considered whether it was the right fit. It took me four years of working insane hours to realize that there was more to life than the almighty billable hour. While I have an incredible work ethic and give my all to my clients, being a well-rounded lawyer and person requires more than being tied to your computer morning, noon and night. And being well-rounded allows me to get even better results for my clients.
Is there a particular book that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
Grit: The Power of Passion and Perserverance by Angela Duckworth. I read this book around the time that it was published while on vacation. It made an impression because it demonstrated through data that those that succeed must have grit. It is not enough to simply be smart or have the right credentials. I look for grit during the recruitment and hiring process. It also was mandatory reading for our then-teenage high school daughters.
Do you have a favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life or your work?
Don’t be an undergraduate school, law school or law firm snob. There are talented people everywhere. You will miss talent if you limit your company or your legal department to candidates that come only from top tier schools and law firms. Many talented, bright people make educational and employment decisions based on many factors in addition to their abilities.
How have you used your success to make the world a better place?
I am committed to training and mentoring the next generation. But what that means is giving the next generation hands-on learning opportunities in the form of courtroom and deposition experiences. I was given early opportunities, and I believe that if a lawyer shows promise, that lawyer regardless of experience, should be given a chance to thrive. Further, lawyers leave law firms when they are not passionate and excited about what they are doing. A lawyer in the Litigation Department should not be taking their first deposition years into the practice of law.
What is the most common legal mistake you see businesses make due to the lack of proper legal counsel, and what are its potential consequences?
It is amazing to me still how much business is done on a handshake. One common legal mistake businesses make without proper legal counsel is neglecting to properly structure their contracts. Maybe they used generic templates found online or maybe they simply did not pay enough attention to the specific legal nuances involved in their industry or the particular transaction. Everyone is friends until something goes wrong — but when things go wrong, and you don’t have a well-written contract to fall back on, businesses are vulnerable to losing legal challenges, losing business, and incurring significant litigation costs.
Can you share an example where early legal intervention could have significantly altered the outcome of a business dispute or challenge?
The demand letter example is a good one. Simply put, a demand letter is a formal request to reach an out of court resolution over a dispute. Responding to this letter strategically can prevent the lawsuit altogether particularly when the demand letter is addressed to a business taking preventative steps such removing or revising a statement about their product that is potentially false or misleading and ceasing to use a logo or statement that infringes another company’s trademark. The Lanham Act (the federal statute which covers trademark and service mark infringement, unfair competition, and false advertising) can subject a company to treble damages plus attorney’s fees if a plaintiff is successful in court.
How do changes in digital technology and online business practices complicate legal issues for businesses without dedicated legal advice?
While digital technology, AI and online business practices enable a business to be more productive, such technology comes with increased legal risks. It is easier for a business to have their sensitive data comprised either through a cyber attack or misuse by former employees. An online presence also makes it easier for competitors and plaintiffs’ attorneys to analyze one’s platforms to determine what violations of various state and federal laws exist. As the FTC has demonstrated, enforcement actions are on the rise, particularly as it pertains to generative AI. Legal review of a company’s use of AI and digital technology is even more important than before.
In your experience, how does the absence of legal counsel impact a business’s approach to contracts and negotiations, and what advice would you give to mitigate these risks?
Without legal expertise, businesses may lack the necessary understanding of contract law and relevant regulations. They may inadvertently agree to terms that heavily favor the other party, exposing themselves to undue risks or liabilities, or they could overlook important provisions such as dispute resolution mechanisms, intellectual property rights, confidentiality clauses, or termination conditions. Businesses often want to include provisions that are anticompetitve and violate the antitrust laws. To mitigate those risks, businesses should consult legal counsel well before they sit down at the negotiating table.
What legal pitfalls do new businesses often overlook during their initial setup and growth phases, and how can they proactively address these issues?
It is exciting to start a new business. Leaders are rightfully bullish about their product and service offerings. But in their excitement, they sometimes overlook important basics, such as entity structure and intellectual property protection. Choosing the appropriate legal structure for the business (e.g., sole proprietorship, partnership, corporation, LLC) is crucial. Each structure has different tax implications, liability protections, and administrative requirements that can significantly impact the business’s operations and legal obligations. Similarly, failing to protect intellectual property assets such as trade secrets and confidential information can leave the business vulnerable to misappropriation and unfair competition. Knowing how to protect the information that gives a business a competitive advantage is criticial, particularly given the FTC’s final rule banning the use of non-competes in the employment setting.
List and briefly explain “Top 5 Mistakes Businesses Make Without Legal Counsel” based on your experiences and insights?
- Ignoring demand letters
Legal problems do not go away by putting demand letters into one’s revolving file. A demand letter is a formal request to resolve a dispute on specific terms. Proactively addressing these is imperative. The time to resolve an issue is not after the lawsuit has been filed.
2. Drafting their own commercial contracts, or failing to have a written agreement at all
It also surprises me the number of contracts that are used without the benefit of legal review. There is merit to having a lawyer, particularly one that litigates and tries commercial disputes, review a contract because that lawyer often understands which provisions and what language may create unnecessary legal challenges. Use of boilerplates often is a mistake, particularly at the hands of a nonattorney. The pandemic, for example, resulted in many companies revamping their force majeure language because many boilerplate force majeure provisions did not cover the pandemic.
3. Using confidentiality, nondisclosure, nonsolicitation and/or noncompete agreements without the benefit of legal review
Most business folks understand that there is merit in using these kinds of agreements. And many of them exist on the Internet. That said, there is tremendous variation across the states in what will be enforced and what will not. What works in Pennsylvania may not work in California. And with the FTC’s latest ban on the use of non-competes in employment, businesses need to make sure that their agreements have sufficient teeth to protect their valuable assets. Because the legal landscape is changing daily, having a lawyer advise a business and review these types of agreements in advance is critically important. Penalties for violations can be stiff depending on the jurisdiction, and use of unenforceable agreement may embroil a business in expensive litigation.
4. Making and documenting business decisions without understanding the legal ramifications and risks associated with certain courses of actions
So much of what happens in businesses occurs through email and text messages. And because text messages are shorter and often used without thought, important evidence can be gained by text messages. Statements made in emails and texts are difficult and sometimes impossible to undo once made. How many business folks write emails, prepare meeting minutes, and send text messages that are anticompetitive? It is not uncommon for businesses to write emails and document business decisions by saying that they are introducing a new product or entering into an agreement in an effort to bury or lock out the competition. Statements like these are fodder for antitrust regulators and lawyers.
5. Failing to understand the ever-changing landscape of employment law
Every business with employees makes decisions about hiring and firing employees. If a business is making hiring and firing decisions without the benefit of legal counsel, that business is likely to run afoul of state and federal laws. These are costly mistakes. Every business should have an employment lawyer on stand-by. Planning on the front end can help avoid exposure. And while it may not prevent the lawsuit, it will help the business mount a solid defense.
If you could inspire a movement that would bring the most amount of good for the greatest number of people, what would that be? You never know what your idea can trigger.
Our legal system affects everyone in society, directly or indirectly. We all benefit from a strong, healthy system that ensures fairness, transparency, and justice. But justice is expensive. And while many states encourage pro bono work, it is not mandatory everywhere. Requiring lawyers to participate in pro bono work is important to ensuring those that have legal needs are obtaining legal representation. I currently participate in the United States Western District of Pennsylvania’s Alternative Dispute Resolution Pro Bono Program representing on a court appointed basis pro se plaintiffs for purposes of ADR only. I also participate in the Pennsylvania Western District Civil Prisoner Rights Program representing pro se prisoners that are alleging that their constitutional rights have been violated. But these programs are voluntary. Imagine what would happen if pro bono work was required for all lawyers in all states? Making pro bono service required would not only ensure access, but it also would result in having more lawyers getting early, direct client and, depending on the program, courtroom experience.
How can our readers follow your work (website URL, LinkedIn page)?
Thank you for these fantastic insights. We greatly appreciate the time you spent on this.
About the Interviewer: Chad Silverstein, a seasoned entrepreneur with over two decades of experience as the Founder and CEO of multiple companies. He launched Choice Recovery, Inc., a healthcare collection agency, while going to The Ohio State University, His team earned national recognition, twice being ranked as the #1 business to work for in Central Ohio. In 2018, Chad launched [re]start, a career development platform connecting thousands of individuals in collections with meaningful employment opportunities, He sold Choice Recovery on his 25th anniversary and in 2023, sold the majority interest in [re]start so he can focus his transition to Built to Lead as an Executive Leadership Coach. Learn more at www.chadsilverstein.com
