Don’t Leave Business Decisions Up To Your Lawyer

I visited a client recently who was entering into a lease agreement and wanted his lawyer to read it and make any suggestions he might think appropriate before he signed it, to which I said, “Good idea. However, have you read it?” The response was, “I will let my lawyer read it, he can understand what it says, I have no idea.”  I suggested that we take a gander at it, just to see what it said and maybe we would learn something. It was a great experience for my client as he read about a number of terms and conditions that were different from what he specifically negotiated. He read further about some matters never discussed and apparently very unfavorable and requiring discussion between him and his business counterpart. There were even some legal matters that sounded way too one-sided to him and he wanted them clarified and possibly renegotiated after his lawyer advised him on those issues.

The lawyer corrected a number of technical issues, such as the way the document was signed to make certain there was no personal guaranty implied, and confirmed all the other changes my client wanted to make that really were non-legal business decisions, up to the client to decide. All of a sudden, my client realized he was about to blindly release his personal responsibility to his lawyer to review his business decisions without him having participated in the negotiation and having no real idea what the issues were all about, thinking that it needed to meet with his lawyer’s satisfaction because it was a legal document. This process, if allowed, would have had the lawyer accepting the wrong terms and allowing other business issues he had no real idea about to be misconstrued as he would be reading and reviewing a contract on behalf of his business client within his focus as a lawyer. Of course the “mistakes” may all have been picked up in review after corrections were made by the attorney, if the business client bothered to reread it, but how many times have I seen the document executed and then thrown into a file never to be read again until a dispute occurs and then it’s read with a silent, “Oops, I didn’t agree to this!” It is a practice we should avoid.

Read every contract. Most of it is understandable and if you cannot understand it, do not sign it until someone explains it to you adequately. Definitely do not allow your lawyer to take your role in deciding what is best for your business. His job is usually to make certain the agreement is technically correct and appropriately not one-sided. Your job is to negotiate terms and conditions and understand exactly what you are agreeing to before you give it to your lawyer. Read everything, then give it your attorney, but read it first and then again after it is reviewed and adjusted. (Or, here’s a thought, How about having your lawyer do the drafting? A lawyer will always find ways to tilt the agreement in favor of his client no matter which side he represents, so pay the bill and take the advantage of having your lawyer write the contract. Few will object.) Make certain it says what you agreed to and what you want. This is how to best handle legal contracts. After all, they are first and foremost business agreements.