By Edwin L. Miller Jr. and Howard E. Berkenblit
Edwin L Miller Jr. and Howard E. Berkenblit are partners in the law firm of Sullivan & Worcester LLP, with offices in Boston, New York, and Washington, D.C.
There’s an increasingly common lament among partners in corporate law firms like ours: many junior associates are rushing to complete the drafting tasks assigned to them and failing to take time to do them carefully and do them well. To put it bluntly, we hear seasoned lawyers often complain that their associates turn in sloppy work that lacks intellectual curiosity.
Perhaps it is a result of the generational difference. Whatever the reasons, we feel younger attorneys often need a “back to basics” primer to reinforce the importance of sweating the small stuff when drafting corporate agreements.
Don’t assume an agreement is perfect because it was used before. Unlike litigation, a large portion of corporate law is based on contract agreements, e.g., merger agreements, licenses, and stock purchases. Generally, lawyers do not have to reinvent the wheel, but they do need to make sure that they are using the right wheel and adapt it appropriately. We have seen associates take a form that was used for another client and simply change the dates, terms, and names of the parties involved for other clients. A contract form should be a starting point, not a template for a cut-and-paste job. Always consider the client. If you are representing a buyer in a merger, then use a buyer-friendly form.
Think before you draft, and ask plenty of questions. When a partner asks you to draft documents for a purchase transaction, for example, make sure you understand what the client wants from the arrangement. Talk to the partner in charge to learn potential hot buttons. If your client has done similar deals before, take the time to find out if the same issues still apply.
Compare drafts. Draft agreements may go through dozens of variations before they are completed. If your client completed a similar merger once before, look back at every single draft of that agreement to see what concessions were made in the process. You want to be a zealous advocate for your client, and you don’t want to inadvertently build in a concession that doesn’t need to be there before negotiations begin.
Don’t be a wimp, but don’t be a jerk either. That is, make sure your first draft adequately represents the wishes of your clients; yet don’t be so aggressively one-sided that you tick off the opposing side. Make the first draft as reasonable as possible while working to promote your client’s interests. Coming off too assertively in the first round of a contract negotiation will reflect poorly on your client (and on the partners in your firm).
Beware of the “replace all” function. Different terms may have different meanings, depending on the structure of a deal. For example, replacing “securities” with “shares” can result in the “Shares and Exchange Commission” if you don’t review all changes.
Use the Internet. It is a treasure trove of forms and not just templates. For example, check SEC filings to see how opposing counsel executed a similar deal with another company. You can become a smarter drafter and a cleverer negotiator by analyzing what types of issues the opposition agreed to in prior deals. The Internet also can help you learn more about industry standards, which can help if you are drafting a deal in an unfamiliar area.
There’s always room for improvement. Just because the senior partner at your firm drafted a successful deal a few years ago doesn’t mean that the form can’t be improved.
Don’t just go through the motions. Partners appreciate when you worry about clients along with them and when you take ownership of the project. Law firms want bright young minds, not robots.
Keep in mind that partners look for three major qualities in associates: the ability to communicate effectively, a willingness to learn, and the quality of work presented. Master the basics to lay a strong foundation for your legal career.
Find a valuable list of background reading and writing tips for young business lawyers online at www.abanet.org/yld/publications/home.shtml.