As a private attorney who’s responsible for bringing in new business, I often think about why businesses need to hire an attorney to help with their contracts. Here are some thoughts about how I view my role in business transactions.
Not all law practices are alike, but I usually operate in one of two contexts: either I’m dealing with a senior business executive (usually the CEO or the owner) of a company that doesn’t have in-house counsel, or I’m basically doing overflow work from the general counsel’s office of a largish corporation. In those cases, I’m usually dealing with someone in the sales division of the company on each contract, although I’m hired by the general counsel or another senior attorney.
My role is similar in each context, but when I’m hired by a general counsel’s office, I often have a gatekeeper function that’s missing when I’m dealing directly with principal business executives. Sophisticated corporations tend to enforce their contracting and risk-management policies through the general counsel’s office, so when I work for the general counsel, I usually have a certain amount of delegated authority to ensure that the corporation’s contracts that I review conform to policy and that exceptions are appropriately vetted. In other words, the business people need my approval before they can enter into a contract.
In all cases, though, I view my principal function as keeping time bombs out of my clients’ filing cabinets. Time bombs are critically unfavorable contractual provisions that are ticking away, unbeknownst to the business executives, until they explode to the (sometimes catastrophic) detriment of the company.
We often categorize contract issues as either legal issues or business issues. For example, whether payment terms are up-front payment, due upon receipt, or net 30 days is typically a decision that business folks make. In contrast, indemnification provisions are usually considered legal decisions that are left to lawyers to haggle over.
Ultimately, though, all decisions about contract provisions are business decisions. And my role is to make sure that the appropriate decision-makers within my client’s organization are aware of the issues that are material to their decision. Important provisions my client isn’t aware of: time bomb. Important provisions that my client decides to accept, considering all the business and legal issues involved: an informed decision.
It’s ultimately up to my clients to make intelligent decisions. It’s up to me to make sure they’re making informed decisions.
What do you think is the role of the commercial attorney?
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