December 30, 2022
If you, like many or most of our clients, are in business, you probably measure success by profit. However, there are always alternative measures that may apply.
You may be more interested in growth at this moment than you are in immediate profit. You may be more concerned about the longevity of your organization than this quarter’s bottom line.
If you are a sole proprietor, partner or shareholder in a closely held private corporation, you may define your goals without the concerns of the duties of management of public corporations, historically viewed as all about profit, usually meaning this quarter and the next.
When you are involved with legal matters, there is no single measure of success. That makes the question of “what is your objective?” both more crucial and more difficult two to define.
Fundamentally your lawyer also needs to know what your objective is so that they can plan the correct strategy and engage in appropriate tactics.
If you are hiring a lawyer to prepare a contract, you probably don’t care whether it is a work of art that elegantly captures obscure legal issues. What you most likely want is something in plain language that you and the opposite party can agree represents your deal clearly and accurately enough that if a problem occurs, simply looking at the contract will likely help you sort it out so that you can avoid expensive dispute resolution.
This is just one example of the questions that can arise. It gets more complex from there.
Is this contract intended to be a “one off” or the beginning of establishing a long term business relationship?
If this contract is one off, is it a complex enough deal that you need a custom or bespoke tailored agreement specially drafted with great care and expands to fit like a Saville Row suit, or will something off the rack fit with a few alterations? Just like buying suiting, the price points will differ.
Establishing a new business relationship is different than maintaining a current relationship, but in both situations, you may want to take a more moderate position than if the contract is one-off.
If a one-off contract involves an opposite party who you suspect will be difficult because they too have no interest in goodwill, extra expense to make sure that the contract covers every possible scenario is much more likely to be a worthwhile investment than the 20th time that you’ve done renovations for a commercial landlord with whom you have a history of settling issues over a friendly cup of coffee.
It is not only important to work out these objectives in your own mind, but also to communicate them to your lawyer. Lawyers are trained to be zealous advocates for their clients, and you would not want that zeal to damage a friendly relationship unnecessarily. On the other hand, where you are dealing with somebody less friendly, you may want your lawyer to be more assertive in advancing your position when negotiating terms of a contact.
In a typical negotiation our agenda should include three categories of items:
- Those you must have, or no deal is possible
- Those you don’t care about, but will put in your draft as potential “traders” to concede to the other party, and thus protect your must haves
- “Nice to haves” that you want in the contract, but will concede if necessary to make the deal.
Your opposite party will have similar interests.
Note that I did not type “a similar list”. All too often, parties to the negotiations start out with a vague idea of their desires in their minds, but not on paper. Writing them down helps the process of clarifying objectives, but even if they only exist as a picture in your head, you need to paint that picture for your lawyer.
This is a reason to develop a trusting relationship with a drafting lawyer who knows you and understands your business to expediate the process of communication. Otherwise, you might find yourself struggling like in the old story of the six blindfolded men trying to describe an elephant.
If you are not clear on your must haves, traders, and nice to haves, your lawyer is left drafting in the dark, unable to spot any legal landmines, bur not fully armed to assist you in the negotiations. If you are not clear on the objectives, your lawyer is handicapped as to strategies and tactics.
At times, your lawyer can help you sort out your objectives, but this takes time, and time is money. Sometimes, though, there just isn’t time.
Good communications and clear thinking will help you avoid winning the battles but losing the war. This does not only apply to drafting or negotiating contracts. It also is important in any sort of negotiation or dispute resolution, whether commercial litigation, family law, or an estates matter.
If your goal is to end up with the cottage, you don’t want to be waiting for an offer from other family members – you want to frame the discussion. You can only do this if you know your goal.
Even with experienced lawyers who you trust, not every deal ends successfully, but defining success at the start tells you whether you end up at the desired destination.
Watch for a future article about what happens when your goal is unattainable. Knowing your desired destination is also a beginning point for damage control, together with understanding where you ended up, and why.
Weilers LLP has spent over 75 years as trusted advisors to our clients. We achieved that goal by understanding the importance of values and objectives. We know how to work with you in the pursuit of your objectives. That might make Weilers LLP the right lawyers for you. Give us a call. We’ll buy the coffee.