Corporate & Securities Law

More on Prospects for Change: Getting Outside Counsel to Cooperate

By Ken Adams

This post earlier this month considered how to ensure that people on the other side of a deal don’t balk at MSCD-compliant language. But what if it’s your outside counsel that’s not playing along?

In this post from last weekend I said that company law departments are best positioned to drive change, in that they?re the ones who pay the bills for inefficient drafting, whether by their lawyers or, more to the point, their outside counsel. That prompted the following observation from longtime reader Chris Lemens:

Let?s say I?ve just paid a law firm for 40 hours of work to come up with a one-off strategic-alliance agreement. Let?s even say that I told them to use MSCD and Bryan Garner as their guides. Let?s then say that I get back hidebound gobble-de-gook. (That?s a term of art for non-MSCD-compliant language.)

Realistically, I have three alternatives:
(a) Send it back to the firm, tell them to do it over, and tell them they are not charging me until they get it right.
(b) Pay for them to fix it.
(c) Sigh and send it to the counter-party with regrets.

Given the timelines under which commercial deals work, option (c) is pretty much the rule. I?ve never done option (b) on broad scale, though I am ashamed to say that I effectively did so a few times in one M&A project, where I had our attorney re-draft some provisions that were intiially unreadable. I?d choose option (a) if I never wanted to work with that firm again; in my experience, charge-offs make lawyers lose face to their partners.

So, “require it of their outside counsel” is tougher than it sounds. The prevailing drafting culture has the inertia of an iceberg. I?m one guy with a paddle.

Here’s my response:

Change can?t be accomplished by fiat. Instead, it will require persistence.

By all means choose option (c), but stress to outside counsel that for your relationship to be as harmonious as possible, you?d like them to take seriously your interest in having your contracts be as clear and efficient as possible.

And if you think that using MSCD as your house drafting style would promote clearer contracts and a more efficient drafting process, it would make sense to ensure that each member of the outside-counsel team working on your matters has a copy of MSCD. And you could recommend that they send their attorneys to one of my seminars or engage me to give an in-house seminar. That isn?t as whacky as it seems: in March I?ll be giving an in-house seminar for a company law-department and its outside counsel.

Whether your outside counsel listens to you will likely be largely a function of what kind of business you send them and how important it is to them. But if you’re lucky, they’ll be thinking along the same lines as you. It?s not only law departments who will be driving change. Nimble law firms are recognizing that simplifying their work allows them to be more competitive. I expect that I?ll be blogging about that in the near future.

Full post as published by AdamsDrafting on January 27, 2009 (boomark / email).