Pause for thought–
A client who was an in–house lawyer at a FTSE 100 company once told me that there are only ever three key issues in a legal agreement – our joint objective is to work out what they are. What does that mean we need to do as commercially minded transactional lawyers? Ignoring the fact that a well drafted contract will never correct a commercially bad deal here are just a few ideas Let’s see if you agree, and I accept it’s rather easier to do this when you have been practicing law for years than when you are just starting.
- Work with a client rather than just always accepting their views;
- Don’t just follow precedents without thinking about the relevant deal;
- Try and remember it’s about the client, not about egos.
One of the main issues for me, is persuading clients that although they have agreed a deal with their ……….. brother, sister, best friend, friendly advisor or just a third-party who wants a cut of the deal, they do need to properly document it.
For me, that doesn’t necessarily mean putting together the longest possible agreement, much of which will invariably be irrelevant to that deal. It does mean looking at the deal from both a legal and commercial point of view and documenting the agreed key and other relevant points.
The same FTSE 100 lawyer told me it is your job to get me 90% of the way there I will worry about the risk of not documenting the other 10%. Lawyers, I think, can’t protect the client 100%. For example, my client who wanted to buy a ship management company but only with guaranteed zero risk or even zero potential risk, was just wasting his time. Any good corporate lawyer can negotiate and draft all the relevant papers for a deal valued at £1million or £50 million. A commercially aware corporate lawyer knows when to tell his client, “I think,from my point of view, this is as good a deal as you will get—do you want to do it from your point of view?” And bear in mind the two views may not always be the same A good transactional lawyer knows when and how to close a deal—it’s a skill in itself.
TO BE CONTINUED