Choosing a Transactional Lawyer

A transactional lawyer negotiates deals and drafts transactional documents, like business contracts, real estate purchase agreements, leases, and operating agreements for limited liability companies.   Some lawyers only do transactions, while others only do litigation.  There are some of us who do both transactions and litigation–we are probably in the minority.

When assisting a client in a transaction, a lawyer first needs to be a good listener so that he obtains from the client all the details of the transaction, which the lawyer can then negotiate and include in the document or documents that he will prepare for the client.  Generally, it is a good idea for the lawyer to speak live with the client, by telephone or in person.  Of course, there should also be emails or other written documentation that the client provides the lawyer that go into the nitty gritty of what the client wants.

By having these detailed communications, the lawyer will also have the opportunity to ask critical questions of the client.  Depending on the answers provided the client, both the client and lawyer will see that the client’s transaction concept is right on the mark, or that the client needs to revise his thinking so he can better reach his goals.

One tool some lawyers use to help gather information from the client is the written questionnaire for the client to complete, which when completed will contain the essential information the lawyer uses to negotiate the transaction and accurately and efficiently create the transactional documents.  The questionnaire is particularly useful in transactions that are more cookie-cutter but that nonetheless have details, such as limited liability formation, buy-sell agreements and shareholder agreements.

Some transactions are more unique, especially if they arrives from the entrepreneur-type client, who often envisions a deal in a out-of-the-box way.  In that case, the lawyer should have a longer conversation with the client to make sure that he understands the client’s concept and is able to ask the important questions.  In such a situation, I ask my clients to email me a detailed concept description, along with a “wish list” of everything the client wants out of the transaction.  All of this information will help insure that the lawyer successfully negotiates the transaction for his client and then thoroughly and creatively drafts the transaction documents.

In negotiation, a lawyer must have the ability to negotiate the most favorable terms for his client plus get to the end-game, that is a signed agreement that works for all parties to the transaction.  To do that, a transactional lawyer usually must be both firm and polite.  That way, he will least likely alienate the other party during the negotiations and during the exchange of the draft documents.  In negotiation, a lawyer should also know which ox to gore, because as is usually the case,  many terms in a transaction have no practical effect as long as everyone lives up to their end of the bargain.

I remember once about 15 years ago doing my first detailed negotiation for a client, a dentist.  Up to that time, I had spent most of my career as a litigator litigating different types of civil and business disputes, often down in the trenches with my “opposing” counsel.

In that particular transaction, I was representing the dentist in a lease negotiation.  I was negotiating directly with the leasing agent of a high rise building in the mid-Wilshire area of the City of Los Angeles.  When I first received the proposed lease, at almost 70 pages, it was far from the standard lease forms I had seen up to that point.  After I reviewed the document, it was clear that many of the sections were unnecessary, and some of the sections were just downright not in my client’s best interest.

In the first negotiation conversation I had with the leasing agent, I tried to convince him that three sections of the lease should be deleted, and I then added indignantly and rather arrogantly, “I know what’s best for my client!”  The agent responded, point blank, “Jim, you’ve probably only done litigation in your career.  And by the way, how many transactions have you done!?”  I knew he was right but I felt insulted, and so I skirted his question and said, “What do you mean, my client’s right!”  The agent instantaneously fired back, “If your client’s right, that means my client’s wrong, so what’s the point of us talking.”  I turned red in the face but the leasing agent couldn’t see–we were on the telephone and there was no facetime yet.

I had enough fortitude to realize I was being way too high powered for the situation.  I took a step back, apologized, put on my “transactional hat,”  and said to the leasing agent, “Let’s start over.”  We then were able to successfully negotiate the lease, to both of our clients’ satisfaction.  That lesson is still with me today–a transactional lawyer needs to be firm but polite in negotiations.  That is usually the name the game.

James A. Vickman, Esq. for LawyerandClient.com, the Resource Desk of Vickman & Associates.  jvickman@vickmanassociates.com, 310-553-0567

Vickman & Associates is a law firm located in Beverly Hills, California, representing individuals and companies in litigation, trials and transactions.

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