In-house lawyers are sometimes viewed as being overly risk adverse and an impediment to deal making.
But there’s a reason for this – it’s their job. They are responsible for identifying and mitigating risk. Whilst this doesn’t always sit well with those tasked with driving sales, no deal is worth it if the risks involved are too great.
So how can you minimise this tension, make it easier for your in-house lawyer to do his or her job and at the same time, get your deal across the line? Avoid these key yet simple mistakes.
1. You don’t give the lay of the land
It’s vital for a lawyer to know the back story to a deal. The who, the what, the where and the why – things like the nature of the relationship with the customer and the terms that you have already agreed to.
All of this helps your lawyer get the big picture, the big picture they need to analyse the details. It has a bearing on how your lawyer will tackle the contract – ‘must-haves’ can become ‘nice-to-haves’ and ‘nice-to-haves’ can become ‘must-haves’ depending on the background information you provide.
Let’s take a confidentiality agreement (NDA) for example. Say your company is presented with an NDA to sign by a supplier. If your lawyer is told upfront that your company itself isn’t actually providing any confidential information, then your lawyer shouldn’t use a heavy handed approach and seek to provide the type of protection they may have otherwise required. You’d be surprised at how often these sorts of details aren’t provided in the first instance.
2. You assume your lawyer is across the risks
A large part of contract negotiation is addressing the allocation of risk between the parties. This means that your lawyer needs to be across technical, commercial and legal risk. The better they understand these risks, the easier it will be for them to prepare and negotiate a contract that is acceptable.
Don’t assume that your lawyer is on board with the technical aspects that you take for granted. For many lawyers, it can be tough to get to grips with the technical aspects of a product, especially when engineering and IT services are involved. They simply don’t have the technical background.
The same applies to the commercial risks. Sitting in the legal department is not the same as sitting in the business – you don’t see the day-to-day operations in action. It’s not until you actually sit in the business that you really understand it and what drives it.
3. You don’t communicate the goals clearly
Each deal has its nuances. You should be clear in your own mind about your key business objectives. What are your ‘must haves’ and ‘nice- to-haves’? Don’t skirt responsibility and leave the commercial decision making solely to your lawyer – own your deal.
By providing crystal clear objectives, you provide the framework your lawyer needs to make drafting and negotiation decisions – decisions as to what terms to include and exclude from the contract.
4. You don’t get your lawyer involved early
When you involve a lawyer late, your lawyer loses the benefit of the context of the deal (not to mention that you put your lawyer under considerable time pressures).
The risk with asking for advice at the last minute is that you may have already agreed to terms which are unacceptable from a legal perspective. From there, it’s difficult to backtrack and you put yourself at a tactical disadvantage.
5. You assume what is urgent to you is urgent to your lawyer
Chances are your lawyer oversees legal responsibilities for a number of departments. Your deal will not be the only deal on the cards for them. So make it clear if your deal is urgent otherwise you are unlikely to get a response within the time frame you are after – but only flag it as urgent if it really is.
6. You don’t come up with a game plan
When it comes time to negotiate the contract, work together to come up with a game plan. Time pressures don’t always allow for this, but try and make the time.
Get on the same page and work out what you want to achieve. What can you trade to get what you want? And how can you leverage any disparity in bargaining power to your advantage? You both should provide input.
Over to you
Avoid these mistakes for faster and simpler dealings with your in-house lawyer. Your in-house lawyer will thank you for it.
With collaboration, you should reach that happy medium where you get your deal across the line at an acceptable risk to your company.