When is a Plum a Potato Chip?
Why business acumen belongs in every legal conversation
Some years ago, the southern San Francisco Bay Area transitioned from an agricultural region into Silicon Valley. Emblematic of that transition was a plum farmer who decided to ride the technology revolution by creating a new use for the plum: he synthesized a fat substitute from the fruit.
He hired a biochemist to develop the product and a patent attorney to protect the intellectual property. Within a year, the fat substitute passed the taste, texture, and appearance tests. The attorney, who had come highly recommended, seemed ideal to the farmer: strong quality, reasonable fees, great client service, and deep experience with agricultural innovation.
And the fat substitute fell flat, far short of projections.
Why?
Neither the entrepreneur nor the attorney asked four basic business questions:
How many fat substitutes were already on the market? The answer was about 200.
Who purchased those fat substitutes in large quantities? The fourteen largest global bakeries.
How many of the existing fat substitutes were controlled by those bakeries, either through licensing or outright ownership of the underlying IP? About two-thirds of the existing fat substitutes were already controlled by the large, global bakeries.
And finally…what were the odds that a plum farmer could capture a meaningful share of an already-crowded fat substitute market? In the absence of connections, significant investment or a substantial quality advantage, the odds of success are very low.
Was it the attorney’s job to ask those questions? Strictly speaking, no. The farmer-entrepreneur should have asked — and answered — those questions before investing $3 million in the development of the fat substitute. Still, the client would have been far better served had the attorney raised those questions at the concept stage.
That’s where business acumen comes in.
What business acumen really means for lawyers
In the eyes of our clients, most “legal issues” are simply business issues with legal dimensions. They sit alongside product decisions, pricing strategy, competitive positioning, supply chain, talent, and capital allocation.
A working definition in this context:
Business acumen is an understanding of how a client’s business actually works and what it takes for that enterprise to become and remain successful.
For lawyers, it’s the ability to combine:
Legal literacy – understanding the statutes, regulations, risks, and options; and
Business literacy – understanding how strategies, behaviors, and decisions surrounding those legal questions will affect revenue, margin, competitive positioning, and long-term value.
Without that combination, it’s easy to give technically correct advice that is commercially irrelevant.
Legal advice in business context
In practice, business acumen shows up in questions like:
If we pursue this strategy, what does it do to your revenue mix and risk profile over the next 3–5 years?
Who are your real economic stakeholders here—customers, payors, regulators, investors—and how will they react?
Is this dispute worth litigating to the mat, or is it better treated as a cost of doing business and resolved quickly?
Are we protecting an asset that actually has a market, or just an idea we’re emotionally attached to?
Clients don’t expect their lawyers to be MBAs, CFOs or CEOs. But they do expect counsel who can talk credibly about:
Revenue and margin
Cash flow and capital requirements
Unit economics and customer acquisition
Market structure and competitive dynamics
In other words, they expect someone who understands why the “plum” was ever supposed to become a “potato chip” in the first place.
The payoff—for clients and for lawyers
When lawyers bring business acumen to the table:
Clients make better go/no-go decisions about products, deals, and disputes.
Legal budgets are allocated to matters that actually move the needle.
In-house counsel can translate advice more easily for boards and business unit leaders.
External counsel become strategic partners, not just issue-spotters.
The law will always matter. But in most boardrooms, legal advice that isn’t anchored in business reality is just noise. The more we as lawyers understand how our clients make money, lose money, and define success, the more valuable our counsel becomes.
Sometimes, the most important thing we can do for a client is not to draft the perfect patent application—but to ask, kindly and clearly:
“Are you sure this plum is really a potato chip?”
James J. Stapleton is the Managing Principal of Client Sciences and the creator of the Sector Leadership Index and the Client Performance Index. He challenges the way the legal market evaluates expertise, arguing that clients use industry sector expertise as a primary lens into their law firm selection.
After more than three decades building AmLaw 100 law firms and global professional services firms PwC and Arthur Andersen—and advising on over 7,500 law firm/client transitions—Mr. Stapleton now helps law firms communicate their industry credibility and aids clients in cutting through marketing claims to identify firms with genuine sector immersion.
Mr. Stapleton can be reached at 408-440-7660 or james.stapleton@clientsciences.com.
