Many business people are frustrated by how long it takes their lawyer to review / finalize a contract.
Your lawyer is just as frustrated about this process as you are!
What do I mean? Let me share with you a typical email from a client:
Please review the attached contract and provide us with the major legal issues. The company is
coming in next week and we want to be ready to finalize the contract. John Client
When you read this email, do you know what the deal is about…or what John and the other company agreed to….or John’s issues….or what areas are more important than others?
Did you answer “NO” to these questions?
I’ll let you in on another secret: I DON’T KNOW THE ANSWERS TO THESE QUESTIONS EITHER!
These answers are important because I can’t analyze a contract in any meaningful way without understanding:
- The deal
- Your issues/ concerns about the deal
- The other sides’ issues/ concerns
Like me, your attorney probably has an inbox full of these emails. If I review the contract without my client’s input, I know I’ll waste a lot of time. I also know that getting the details from my client is going to be like pulling teeth. What could have been a straightforward matter has now turned into a more time consuming, frustrating project…..for both of us!
(By the way: I’ve talked to dozens of in-house lawyers and they all tell me they share the same experiences and frustrations!)
Believe it or not……we attorneys are looking for direction from you, our client!
To explain what I mean, here’s a story “Jim”, one of my seminar attendees, told me:
“I received a supplier’s objections to our contract. I’d been with the company for a short
time and asked a colleague to refer me to the attorney who needed to review the
“He said: Don’t expect to hear from him any time soon. We call him the “black hole”. Things go
in but they never come out.”
I wrote a memo to the attorney explaining the deal, what we’d agreed to, and what problems I
had (and didn’t have) with the changes. I asked to set up an appointment.
I sent the email in the morning. That afternoon, I received a reply from the attorney who
gave me language suggestions and some ideas on how to respond.
No one could believe that I’d received such a quick response. Someone even suggested I must
have bribed him.”
While Jim’s department may have been surprised, I wasn’t. Jim’s lawyer is inundated with requests from other clients who mostly never explain the deal.
Jim’s lawyer is thinking: “Finally, a client who gives me the necessary background, has read the contract, tried to make sure the contract language lines up with the deal, and helps focus my attention.”
Jim helped make the lawyer’s job easier and saved the lawyer time!
TIPS TO EXPEDITE THE LEGAL REVIEW
- Discuss the major issues with your supplier/ customer before negotiating the contract.
- Make sure the contract includes the deal points you’ve agreed upon.
- If you don’t agree with/ understand a clause, ask for an explanation.
- Don’t be reluctant to ask questions: What problems do you have with our clause? Can you give me
some specific examples?
- Your questions will lead to information about your supplier’s/ customer’s concerns.
- Discuss the business aspects of all clauses.. even the “legal” clauses.
- The limitation of liability clause boils down to “who pays the money”.
- Example: In the sale of equipment, discuss limitation of liability in exchange for providing no or low
fee monthly preventative maintenance. Talk in real world terms with real world approaches to
address your issues.
- Before you send the contract to your lawyer, make sure it reflects your agreements.
- Don’t just “hand off” the contract to your lawyer. Stay involved.
- Provide your lawyer with a “term sheet” explaining the deal.
- Set up an appointment to discuss these issues with your lawyer.
I guarantee you’ll reduce the time involved in the legal review if you follow these tips!
In order to be effective, you must understand the meaning of your clauses and your customer’s clauses.
That’s where I come in!
I’ve presented seminars throughout the country to thousands of sales, marketing and purchasing professionals on how to read, understand and negotiate contract terms. I use your company’s terms and conditions as well as your customers’ and we discuss the meanings of both sides’ clauses, how to negotiate them, and approaches to resolution.
I would be delighted to discuss the possibility of presenting a workshop for your company.