Don’t Let Your Lawyers Negotiate Your Deals

You have a hot shot attorney. The kind that can get the major players in your industry on the phone. He/she knows the basic terms of the most recent industry deals, and is a fearless negotiator. Folks aren’t happy to get letters from them on the fancy letterhead with all the partner names. So when the time comes for you to make a deal, you should let sick your big gun on it, right?

Not for my money.

Don’t get me wrong, this article is not about lawyer bashing.

But there’s a time and place for lawyering, and negotiating ain’t it. Lawyers, as smart as they usually are, aren’t business people. That’s what negotiations are about. Business.

You should determine the terms you want / will accept, as well as the tone that should be used throughout the negotiations. It’s fine to hand things over to your attorney once you’ve decided what needs to be done, but letting them run that show usually isn’t a good idea.

Lawyers are trained to have a very different mentality. They anticipate problems, consider contingencies, etc. All too often, they feel like they’re earning their keep by being the tough cop who tells the other party no. On the other hand, since they’re paid by the hour, some lawyers have been known to manufacture problems to actually draw out negotiations because that’s where they earn their money.

The best course is for you to decide what you want from an ongoing relationship and current negotiation. What I like to do is take the initiative and make a bullet point term sheet, as it helps steer the negotiations. Then have the other party draft the first pass at a contract, and save on your legal fees. Then have your lawyer review it.

I always have attorneys review contracts, but I don’t let them drive the bus.

If you do it this way, you’ll likely not only save the money, but often enough, the deal itself.

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