For some of my co-members of the www.smealliance .org , who have little time for lawyers …..a further short set of short comments on ideas of problem solving and common sense.
Don’t necessarily assume that a document which is 60 pages long, is any “better /more correct” than a shorter one. I try to use “letter agreements” on a much more regular basis, rather than more formal and formulaic agreements– why? I started, because a client wanted to split his business from his co-owner and each would take a part of the whole. Having received a draft from the other law firm of about 30 pages, my client said he would only sign a document if it was less than 10 pages long . So we did it, it took some thought and an understanding of the core issues — what was important to the client and what wasn’t. There are as many simple ways to make a document shorter– and not just changing the size of the font and/or narrowing the margins.
Next I bought a set of contracts, assets and employees for a travel group in much the same way. Now I am working on a small asset acquisition for an international trading group, and they accepted (maybe because this is only a £1m deal– small for them ), that a letter agreement is the best way to document it. Seems to me the key here is to think about the draft and what the parties want to achieve first and then work out how to get there, rather than start with the draft document.
As I said in my last blog , commercially aware transactional lawyers are here to facilitate the deal— make it happen. There are law firms and lawyers in London who used to be known for killing deals. One client told me years ago that if Mr zzzzzz, ever acted for the other party in another deal where my client was involved, he would rather walk away than negotiate. After an 18 month period when we negotiated and signed a deal every two months , the lawyer on this one wanted to show he was tough– he certainly was, but it cost his client the deal and about £5 million. That was more than 20 years ago and it left , as you can see , a lasting impression.
In London and particularly on the larger deals, lawyers are normally just ……….lawyers … they aren’t, nor are they usually meant to be, business advisors – for numerous reasons, one being that their insurance policy won’t cover them. And I guess it’s an experience thing too– the older you get the more you realise what you don’t know, so you go back and ask people (auditors, bankers,especially clients) for clarity.
Realise also that the lawyer is not meant to be the ultimate arbiter of the risks in a deal—most of us don’t have the skill sets, to do so. That has to be for the client. After all if we wanted to take those decisions, we should be on the other side of the table. What that probably means is not to say to a client “you shouldn’t” or you can’t do this” …. But rather “if you do this, then some of the risks might be as follows” or “ there is another way to get to more or less the same result”. As the song says ” It ain’t what you say , it’s the way that you say it”.
Of course that doesn’t mean lawyers shouldn’t have views. One longstanding client says the reason he instructs me and refers me to others is that I will give him an answer. I may be right or I may be wrong– but I’ll say something. As he says to me ,” I am not right all the time, so I don’t expect you to be.”
Common sense ideas don’t always work and are sometimes genuinely dangerous , but are often worth a thought.