Some clients, especially if they’ve been around a while, occasionally decry the current lack of “hand-shake” deals: “There was a time when we didn’t need to spend all this time on contracts–much less lawyers. We just shook hands on the deal and moved on. We trusted each other.”
Even if this approach may have been acceptable at one time—and I question even that—it is not now; and it’s not just a question of trust. It’s a matter of recognizing, for one thing, that stuff happens. Even an agreement between long-time friends may be based at least in part upon certain assumptions and contingencies on one side or the other, spoken or unspoken. If, due to an unforeseen occurrence, or a faulty assumption, doing the deal will render one friend insolvent, should the other require him to follow through? A deal gone bad between friends, despite the good faith of both, can destroy the relationship.
Memories also change, even between friends. Relatively simple transactions include several terms. The parties’ contract may require, for example, agreement upon price, interest rate, timing, financing, value and appraisals, required approvals and other conditions. Remembering all these considerations is difficult, if not impossible, if not written down.
In short, putting a deal in writing does not indicate a lack of trust. Instead, it is a means of creating, building and preserving relationships. An agreement well considered and drafted will express the expectations of both parties and specify all the important terms, thereby enhancing trust instead of gutting it. Of course, no amount of paper will assure that an untrustworthy party will perform as agreed. In fact, I tell clients not to rely upon a written contract as a substitute for trust; but, especially if there’s enough money involved, clients usually take the risk.
Granted, negotiation of a contract may itself be contentious and challenging to relationship. All too often and easily, parties and their counsel give rein to their egos and contract negotiations become “win or lose”, or worse, “scorched earth” propositions. Stephen Covey’s insistence upon “win-win” is pertinent here. All parties’ believing that they have been fairly and honestly heard and that the final deal is a reasonable and fair integration of their respective needs and perspectives enhances relationship and empowers the negotiation process itself to become a trust-building exercise.
Lawyers therefore have the opportunity to serve as relationship midwives; but clients must first retain them, and, except in appropriate pro bono matters, pay the fees. Some parties eschew engaging attorneys because they don’t want to pay, or they feel that attorneys just hinder the deal. Admittedly, some attorneys (as well as their clients) make deals more difficult—and therefore more expensive– than they need to be. I believe, however, that most attorneys want to represent their clients conscientiously for a reasonable fee. My desire to do just that was one reason that I went out on my own. I also tell clients that the legal fees incurred to structure and document correctly up front will likely be substantially less that those incurred if the foundation is not well constructed and the deal goes bad. Look at it as an investment in relationship.
In my experience when people speak of a lawyer’s being a hindrance, they mean that the attorney unnecessarily delays or complicates matters. Again, that can and does happen. If, however, a deal is somewhat delayed to make sure everyone is on the same page and that everything is adequately considered and documented, or if inclusion of all the requisite deal points render the agreement longer than the client thinks it should be, then I respectfully suggest that some client education is appropriate.
I also recognize firsthand that we attorneys can lose our way. Several years ago I worked with a couple of senior partners on a retail mall refinancing, and they instructed me to draft some agreement, which I did. I sent it to the partners for review, and the only comment I got back was, “It doesn’t seem long enough.” They had no substantive comment, no indication that I failed to include anything, just “it doesn’t seem long enough.” I remember staying at the office late that night adding whatever boilerplate I could find. We billed the client for that time, but I don’t feel good about what they got for the money.
These observations derive from my experience as a transactional attorney in metropolitan Atlanta. Individuals who represent themselves in litigation face different—and in some cases more sobering—risks and cause increasing challenges to the judicial system. See, for example, the recent article on ajc.com entitled More people forgo lawyers, represent themselves. And despite my observation above regarding the plethora of available attorneys, this observation does not hold true in all areas. On this score see Lawyers a luxury in rural Georgia. I applaud Georgia Legal Services Program and other attorneys who work to fill the gaps.