Lessons Learned: Tips for Young Lawyers for Getting the Deal Done (Part One)Posted on Mar 29, 2012
Law school is notorious for teaching the law, but not necessarily how to be a lawyer. While learning the theoretical application of legal principles via the Socratic method may teach you how to think, it can be of little practical use when it comes to knowing how to represent a business client or move a deal from negotiations to contract execution and through closing.
That’s not to disparage my own law school experience, which I thought was excellent. I certainly had opportunities (several, unfortunately, missed) to learn about negotiating and drafting contracts in law school. It’s more to say that much of what is to be learned about representing clients and getting a deal done can only be learned by representing clients and getting deals done. As with most endeavors, theory is no substitute for the white-hot crucible of experience.
This brings to mind my early days as a transactional attorney, a somewhat surreal experience presumably shared by many other fresh-out-of-school newbies. Armed with ambition and just enough knowledge to be dangerous, I was ready to charge into my new firm and take on the world.
Of course, that was until the first contract (a lease, if I recall correctly) landed in my lap with my marching orders: “Handle this deal.” As I racked my brain to remember where in law school I learned how to negotiate a lease, I’m sure my first thought has crossed the mind of many other green attorneys . . . “OK, now what?”
With that in mind, I want to share some of the lessons I have learned over the years about representing clients as a young transactional attorney and getting deals done. These are not negotiating tips per se—innumerable volumes have been written and courses taught on that subject. Rather, these are practical suggestions for new and soon-to-be attorneys who do not have a lot of experience under their belt, and are meant to give some general insight into how to represent a client effectively, succeed as a young transactional attorney, deal with “the other side,” move documents through the negotiating process, and “get to closed.”
Documents are the instruments by which the deal gets done. Written contracts memorialize the parties’ business deal, allocate transactional risks between the parties, and serve as the road map to closing. Not surprisingly, then, it is critical for new transactional attorneys to develop strong documentation skills early in their career. But what does that mean?
At the most basic level, good drafting simply means good writing. To achieve its purpose, a contract must be absolutely accurate, crystal-clear, and internally consistent. Contracts should be written in “plain English” to the greatest extent possible. Every provision should be unambiguous, meaning that it is not reasonably susceptible to more than one interpretation (except in those relatively rare instances where vagueness is thought to be in your client’s interests). In short, a contract must be “tight.”
On another level, good drafting means addressing all relevant business and legal issues in a manner that protects your client’s interests to the greatest degree possible. Contracts allocate a variety of risks—both known and unknown—between the parties, and should do so appropriately in the context of applicable law, the parties’ relative bargaining power, and other deal factors. On this level, proper drafting requires a strong understanding of the law and the underlying business transaction, as well as the specific functions served by various documents.
So how does a new attorney become an excellent contract drafter? Education is certainly part of the equation, even on the writing front. Law students and transactional attorneys should take advantage of educational opportunities to learn about contract drafting through clinics, “boot camps,” and workshops made available in law school, through law firms, or as continuing education programs. Innumerable books also are available on analyzing and drafting contracts (see, for example, the bibliography at the bottom of this page of the ABA’s website).
Primarily, though, an attorney learns to write as he learns any skill: through real-world practice. Straight out of law school, many lawyers—even those who are generally great writers—will not have a strong grasp on how to draft (or perhaps even fully understand) a complex contract. Learning to address complicated legal and business issues in language that is clear and simple, yet precise and fully enforceable, requires a significant investment of time and brainpower in the direct writing, reviewing, and revising of contracts.
New attorneys should look for opportunities to draft documents as early and often in their career as possible (subject, of course, to appropriate supervision to ensure competent representation). Even if you are not the principal drafter and negotiator on a deal, you often will be enlisted to draft various “ancillary” contracts such as assignments, bills of sale, and other closing documents. Though far simpler than, say, a complex purchase agreement, working on these types of documents often will be your first opportunity to hone your legal writing skills in the real world. Don’t wait for these drafting opportunities to come to you; seek them out and learn from them.
Of course, contracts aren’t just about the “writing.” To manage legal and transactional risks effectively, a young attorney also must educate herself on the substance of contracts. A critical component of this education is acquiring expertise on the specific legal and business issues that affect the transaction at hand, as discussed later in this series. Related to that, though, an attorney can and should focus on educating herself on documents themselves.
New attorneys need to develop an understanding of the various agreements that parties enter into for particular types of transactions, and the specific functions those agreements serve. Some deals, such as the leasing of commercial space, usually involve only one document (although related agreements, such as an SNDA, may be needed even there). For more complex deals, documents are needed for numerous purposes at multiple stages of the transaction.
Consider the sale of commercial property. In addition to the formal purchase and sale agreement, an attorney may need to draft and negotiate related documents prior to the parties’ formal agreement (e.g., a non-binding letter of intent), during the due diligence period (e.g., contracts governing the parties’ post-closing rights and obligations, which they have to agree on before the buyer waives contingencies), and in preparation of closing (e.g., deeds, assignments, bills of sale, estoppels, and so on). Straight out of school, you may not have a clear understanding of what “set” of documents is needed for any particular transaction, so you must work to gain that understanding quickly.
Then an attorney needs to know what each of these documents must accomplish for his client; in other words, what the contract should “say.” Each deal is different, of course, but contracts (at least well-drafted ones) typically address the same general types of issues from deal to deal. A “typical” purchase agreement, for example, will cover (among other issues) the specific business terms (description of property, purchase price, closing date, etc.), the parties’ representations and warranties, pre- and post-closing covenants, closing conditions, and remedies for default. Similarly, commercial leases usually address the same wide range of legal issues, albeit in different ways in light of the specific business deal, the parties’ relative bargaining power, and other factors.
Needless to say, it’s a lot to learn. To start making sense of the innumerable legal issues addressed in innumerable types of contracts, I encourage new attorneys to spend a considerable amount of time working with documents early in their career, even outside the scope of their billable work. A lot of being a good contract attorney is learned on the job, but that doesn’t mean you can (or should) strengthen your knowledge only through actual deals.
Instead, take proactive steps to learn about documents and drafting by reading, analyzing, and questioning contracts whenever possible. If you work in a firm with a “form library,” for example, compare and contrast different contract versions to see how the same issues are handled differently from form to form. Is there a reason they are addressed differently—for example, is one lease form intended to be landlord-favorable, and the other pro-tenant? Or is one contract simply better drafted than the other?
The key is to think critically about contract provisions. Don’t let your eyes glaze over every time you read an insurance clause in a lease, for example, either because you don’t fully understand it or because you assume that the language “worked before so it must be good enough here.” You can’t assume that any given contract provision addresses an issue correctly; you must understand the issue and know that the provision is properly drafted. (More on never assuming later!)
Consider further the example of the insurance clause in your client’s lease. To competently represent your client, you must understand a range of legal and business issues on the subject of insurance coverage, how the insurance provision should be drafted in the context of applicable law and the particular deal, and how the provision interplays with numerous other lease provisions (e.g., insurance, casualty, waiver of claims/subrogation, exculpation, etc.). You simply won’t understand all of these issues when you start practicing law, and you’ll be doing yourself and your clients a disservice if you learn them only passively over a long period of client representation.
By actively using your brain and your resources (mentors, educational opportunities, research tools, etc.), you will begin to develop the skills necessary to “paper the deal” in a way that best serves your client’s interests. You will come to understand myriad legal and business issues, and learn to distinguish good drafting from bad (avoiding or remedying the latter). You can build your own ever-evolving “form library”—though you also will understand that there is really no such thing as a one-size-fits-all “form” for any deal. When you draft a contract, you will be able to start negotiations from the strongest possible position by preparing an air-tight document that promotes your client’s business and legal goals to the greatest extent possible. And when it comes time to review and revise another attorney’s contract, you will recognize what needs to be changed, and—critically—what important issues have been omitted altogether.
Through this combination of education and experience that includes studying, drafting, and thinking about contracts proactively and diligently, you will be on track to understand the “what, when, why and how” of legal documents:
- What: What documents are needed for a particular deal;
- When: At what stage of the deal the documents must be negotiated, signed, and/or effectuated;
- Why: The specific functions each document is intended to serve and the goals they must accomplish; and
- How: The best way to draft each provision of each document to best protect your client’s interests.
Until next time . . . happy drafting!
Next up . . . Part Two: “Engage Your Brain” and “Engage Your Ears”