Pub. 14 2019-2020 Issue 3

NEBRASKA BANKERS ASSOCIATION 13 If lawyers are engaged to help with the contract, leave the responsibility to them. Step back and let the experts work it out, lawyer-to-lawyer. This is particularly true when the other side’s counsel is running the process on that side. There is no need to have multiple cooks in the kitchen. Your lawyers know what they are doing and should be fully capable of getting the contract completed, particularly if you have communicated your concerns and instructions to them. If this is not fully practical, turn the matter over to counsel, but invite them to bring you back in on specific issues as needed in the process. Editor’s note: Deadlines are necessary and sometimes driven by external factors. Deadlines also pose a temptation to the other side to play out the clock against the party that needs to negotiate a standard contract. This does not even need to be intentional. If time runs out, the other side will be happy to stick with as many of their own standard terms as still remain unresolved. They, after all, had all the time in the world to develop the standard form they are using and happy with. If truly necessary tomanage the situation, impose a time limit internally and don’t disclose it to the other side. Consider instead whether a deadline can be imposed that the other side needs to work against. Ideally, this deadline will be one that allows time to pursue a Plan B that involves a different party that is potentially more accommodat- ing. Plan ahead; start early. Rule 6. Don’t get distracted by negative theoreti- cal scenarios It is not hard to dream up negative things that can happen in a new contractual relationship. Negativity, however, will not help get your contract done. Expect the best, which should be natural since you likely just selected your potential new business partner as the best competitive choice for your needs. Many businesses (yours included?) fall into the category of those who are unlikely to sue a business partner even if they default, so why bother to deal with negative scenarios which are also unlikely to begin with? Stay focused on what is most likely. Nothing is risk free – chasing down protection for every potential negative scenario is impractical and wasteful. Editor’s note: Judgment is necessary in deciding which battles to fight. Choosing not to focus on every potential negative scenariomakes good sense. A party should, however, identify the key risks in a new relationship (counsel will be able to help if re- quested). Once key risks are identified, the affected party should consider how the resulting loss or situation will be dealt with if the identified risk materializes. A party may simply assume the risk of some losses. Other risks might be dealt with outside the contract (e.g., if poor performance is the risk, switching service providers may be a practical solution, assuming the client can easily exit the deficient relationship). If, however, the affected party wants to be able to hold the other responsible for a loss or situation caused by the other, that affected party should spend the time needed to deal with that possibility in the contract. While dreaming up and chasing down appropriate contract terms for every possible risk should not be the goal, important risks and client-desired remedies should be considered. Clients can manage what is invested to these ends by being actively involved in identifying important risks and communicating to their counsel what they care about and what they want to be able to do if they are wronged. Rule 7. Once the lawyers are involved, stay entirely out of the process If lawyers are engaged to help with the contract, leave the responsibility to them. Step back and let the experts work it out, lawyer-to-lawyer. This is particularly true when the other side’s counsel is running the process on that side. There is no need to have multiple cooks in the kitchen. Your lawyers know what they are doing and should be fully capable of getting the contract completed, particularly if you have communicated your concerns and instructions to them. If this is not fully practical, turn the matter over to counsel, but invite them to bring you back in on specific issues as needed in the process. Editor’s note: There may be no single right way to staff a contract review and negotiation. If counsel is involved on one side it is typical for counsel to be involved on both sides. It may not even be ethical for one party’s counsel to communicate with the other’s party business representative if counsel knows that the other party is represented by counsel. More importantly, it can often be a mistake to put counsel in the position of going it alone with the other side (even if the business team is standing Counselor’s Corner — continued on page 14