Once upon a time, not many years ago, lawyers had their hands full. In those early days, lawyers acted as a “one stop shop” offering a wide range of legal services: from litigation to transactional work. Although one might argue against the effectiveness of maintaining a broad general practice of law which is not area-specific, it is evident that a diverse legal practice equips lawyers with a degree of “horizontal vision” and with a toolkit, enabling them to consider various factors and potential implications when evaluating a legal matter.
In this day and age, general practice practitioners are a rare sight among lawyers. In a global world where law firms offer a diverse range of legal services, most lawyers nourish specialties and practice a specific area of law. Those lawyers whose practices concentrate on a specific area of law often have no experience whatsoever with any other area of law, occasionally not even adjacent areas which reflect directly on their chosen area of practice.
Thinking Litigation When Drafting Contracts
There are many advantages in having a niche law practice. However, at least when crafting a business contract, a certain degree of knowledge of, or experience with, contract related litigation, may come in handy.
Transactional lawyers and litigators have a different approach toward business contracts. A transactional lawyer would typically negotiate a business contract “ex-ante”, taking into consideration only those factors which may affect the willingness or ability of the parties to sign the contract and to close the transaction. When drafting a business contract a transactional lawyer will usually act narrow-minded and be guided by a short list of principles. Most of those principles, if not all, are aimed at meeting the client’s needs and interests at the time the contract is entered into.
Preparing in Advance for Court Disputes
Unfortunately, when things go south and contract disputes arise, client’s interests are balanced differently. Principles which had guided the transactional lawyer prior to signing the deal (and which may had been valid before the dispute arose) might lose significance at the time of the dispute.
Having been involved in many complex contract negotiations, I realize that good contract drafting requires a transactional lawyer to take a conscious approach. Effective contract drafting requires the transactional lawyer to put on his litigator hat and to take into account all those considerations and factors which may affect his or hers client’s best interests if, for whatever reason, the contract will end up being the subject of a dispute in court at a later stage. Absent any litigation experience or knowledge, a transactional lawyer may face difficulties in foreseeing how a future dispute would be litigated and resolved in court.
Our Advice: Use theoretical assumptions and consider the worst case scenario – the “what ifs?”; In doing so, a transactional lawyer needs to advocate for the counter-party and to consider all arguments which might be used against his client if the contract at hand would be the subject of litigation. Although it may not be allowed in trial, speculation at the outset may help the client avoid disputes after the fact.