Posted Monday 6th January 2020
Christmas is done. The three pesky spirits that completely ruined your Christmas Eve are a distant memory and it would seem the perfect time to claw back some of the cash ‘invested’ on your team’s Christmas outing with these 5 money-saving tips for getting the most value out of your commercial lawyer in 2020:
Before automatically forwarding each new contract to your lawyer, think about the value, simplicity and level of risk involved. Although it will often be advisable to seek professional assistance, in certain instances you might sensibly choose to save your money (for example, where: (i) the commercial arrangement in question is uncomplicated and/or of low value; (ii) the terms are clear and accurately reflect the deal as you understand it; and (iii) you completely understand and can accept the potential risks of something going wrong). Alternatively, in circumstances where a full review cannot be commercially justified but you have identified a possible issue, your lawyer may be happy to give you a steer on that issue in isolation.
Wherever possible, do the deal first (making sure all communications are stated to be ‘subject to contract’) and document it later. Ensuring you and your counterparty are aligned on key commercial terms before drafting an agreement will usually save you time and money. You shouldn’t necessarily be scared to discuss the more ‘legal’ provisions (such as clauses relating to liability, termination and dispute resolution) at an early stage either, although you may prefer to discuss these with your lawyer first to ensure you are clear on the implications of the various alternatives available to you.
It is highly unlikely that you will find commercial agreements as stimulating as your lawyer does (at least if they are anything like me) but time spent engaging with the process early on will often avoid needless back and forth further down the line. The more detailed and clear your initial instructions are, the closer the first draft of the agreement will be to the document you ultimately need it to be. Who knows, you might even learn to enjoy the terrain a little more with your lawyer to guide you through it…
If you are presented with a term that is unexpected or unclear, consider asking your counterparty to explain what they are trying to achieve with it before paying your lawyer to unpick it. As well as potentially saving you money, this will put your opposite number on the spot and may give you grounds to request its removal or amendment if they are unable to justify its inclusion (and if they are able to justify it, their explanation may well help your lawyer to ensure the clause in question does what it’s intended to do).
You will often be told that a company’s terms and conditions are ‘non-negotiable’. This is actually relatively rarely the case (although, if your contract is not considered to be of sufficient value, your counterparty may have reasonably decided that they are unwilling to incur legal costs in connection with it). If something is unacceptable to you, you should make it known. You should take care to explain why it is unacceptable too. For example, your business may be materially different in nature to the companies that your counterparty is used to dealing with – if that is the case, they may well be able to understand your position. Perhaps surprisingly, you will often find that larger companies are those most willing and able to accommodate reasonable and justified requests. If you can start a dialogue, you may be able to improve the commercial terms far more than you would have expected at the outset.
So, there you have it. Keep these 5 tips in mind when dealing with commercial contracts this year and you might even find yourself happy to take part in the Secret Santa next Christmas…
Have a happy and prosperous year ahead!
This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.
Joelson, a leading London law firm, announces its partnership with Blue Earth on the upcoming Blue Earth Forum and Blue Earth Summit events this year.
Joelson, the leading West End London law firm, has announced the promotion of Michael Friend to Partner, within the firm’s Real Estate team, effective 1 April 2024.
