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Lawyer Rant no.1

11.05.2009

Numbered because I suspect there will be more….

Number OneWhen we enter into negotiations with our customer, we are distributing risk based on who perceives the lowest risk and who can best manage, absorb, or assess the risk. If your company is unable to manage any type of risk better than your customer, then you are in trouble. If you are doing complex selling, then you are trying to get paid for risks that you can handle more efficiently than your customer– that is the essence of large, complex, services (and often product) business. Unfortunately, there are a number of techniques corporate lawyers use to sabotage good, healthy risk taking:

Blocking All Risk: Any junior lawyer or contracts person can review a contract against their own corporate standards. These poor lawyers usually also want to have direct mano-i-mano talks with the lawyer on the other side. What good could possibly come from this? At best, they will distribute risk randomly.
Control the Language: Lawyers that insist on inserting text that is not understandable to normal business people is clearly hiding their ignorance. Remember, the goal is to stay out of courts, not just prepare to win a case. If those working with the contract cannot understand it, then its unclear interpretations will actually increase conflict rather than resolve conflict as a good contract should.

Good business people don’t get blocked by such lawyers. The good news is that such bad lawyers are arrogant, territorial, and not always so smart. This can all be used against them.

I can attest to working with some great lawyers. Here are some tips and tricks I have found:
1. Get your lawyers to educate and empower you (that needs good lawyer on your side and some trust). This lessens the possibility of lawyer to lawyer escalations. Their bad lawyer will always be far better at law than ‘dumb me’. -play a bit stupid.
2. Work with the business people to outline as much of the business relationship as possible before you start bringing out any text from other contracts. Handwritten documents are the best way to focus on the real issues. When this is then agreed, the logic behind the decision will be known and the bad lawyer will find it difficult to over-ride. Plus, since the agreement is written and mostly complete, the bad lawyer will be in the uncomfortable position of having to understand you rather than the other way around.
3. Finally, remember that an agreement is an agrement. It does not matter if it looks or sounds like a contract, what matters is if there is clear conformation of agreement by two sides. Notes of meetings (emailed and confirmed), letters of intent, hand written agreements, etc all have the same (or perhaps stronger since they come later) than the agreement that the bad lawyer was focusing on. Conspire with your business counterpart to agree on the obvious outside of the formal contract that your bad lawyer will see.

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