Gurus need written contracts with good protections built in

What’s a “Guru”?

A Guru can be an old timer in the field who has been recruited by a company because the company desperately needs someone who really knows what they are doing, or could be someone with highly specialized training or experience. Here are some of the scenarios that motivate companies to seek Gurus:

• to jump-start the company’s ability to compete with the bigger players
• to develop a new line of business from scratch
• to help attract a particularly important potential client (telling the Guru he’ll work the account after the client comes on board)
• to fix a big problem or deficiency or weakness in a particular area
• (secret motive) to make the corporate resume look good to a potential buyer or financier
• (secret motive) to save the butt of some executive whose head is on the chopping block if he doesn’t turn things around quickly

Gurus get exploited and discarded

The company will pay a Guru handsomely for a short while, let the Guru work his magic, and then fire the Guru because he costs too much, and replace him with someone at half price to follow through on what the Guru set up.

Gurus need to be careful to protect themselves from being exploited.

Gurus might be able to negotiate for written contracts with a definite duration that has teeth, or else a very nice severance provision if fired without good cause. The new employer might demand that the Guru sign a non-compete, which is particularly troublesome because the new employer might not have any intention of employing the Guru for very long.

How much bargaining power does the Guru have? How much negotiating grit does the Guru have – is the Guru willing to drive a hard bargain and walk away if the assurances are inadequate?

If the Guru is unwilling to risk the potential position by driving a hard bargain, then the Guru should probably look upon the new opportunity as a purely temporary job. But then here’s a Trap:. If the Guru continues to look for new employment while serving as a Guru, and the new employer learns of the job search, the new employer might fire the Guru for “lack of loyalty” when the time comes to let the Guru go, rather than tell the Guru “it’s not working out” which is the more common excuse in my experience.

This tip comes to you courtesy of a whole bunch of Gurus who trusted the sincerity of their new employers, uprooted their families, came to St. Louis or Kansas City, put the new company into a line of business or saved someone’s butt, and were fired without good cause pretty soon thereafter. “It’s just not working out” they were told. The real reason is that the Guru served his purpose, disgorged his hard-learned knowledge, and became expendable. When the deal went sour, they called me. I wish they would have called me first, before taking the jobs.

What can a lawyer do to help prevent the Guru-termination problem?

It all depends on the Guru’s bargaining power and willingness to take a risk by driving a harder bargain. Lawyers do not have any magical powers to force the employer to give the Guru a good deal and a good contract. Sometimes lawyers are counter-productive: we tell people the weaknesses in deals, and the person then holds out for a better deal which never comes. Contract negotiations do go sour, as the parties’ (and sometimes their lawyers’) egos clash in the give and take of negotiation. That’s why the amount of the Guru’s bargaining power is so important.

How much “bargaining power” do you have?

Bargaining power, at its essence, is a comparison between:

1. how badly the other party wants you to make a deal with them
2. compared with how badly you want to make a deal with them

Lawyers can’t create bargaining power in a contract negotiation where none exists. But lawyers can help you capitalize on the bargaining power you have, by helping you obtain a deal that accounts for the high likelihood that at some point your relationship with the other party will end.

For more information, see my contracts and non-competes articles.

Article written by | Tim Willoughby