I recently leafed through Business Contracts: Turn Any Business Contract to Your Advantage (Entrepreneur Press 2007). The publisher was kind enough to send me a review copy. It’s by Laura Plimpton, a lawyer. As the title suggests, it aims to help businesspeople get to grips with contracts.
In just under 200 pages, Plimpton discusses a broad range of contract issues. An appendix contains a further 80 pages of sample contracts. Plimpton’s prose style is breezy, but the book nevertheless requires that the reader pay attention. The contract language included in the book is of course the dreck of mainstream contract drafting, and Plimpton repeats some urban legends, but in that regard she’s in good company. If a businessperson is determined to write or review without the help of a lawyer contracts providing for the sale of goods or services, they’d be better equipped to do so after having read this book. But Plimpton herself notes in the introduction that attorney help is invaluable.
Plimpton’s book is one of a number of books aiming to make business contracts more accessible to businesspeople. Business Contracts Kit for Dummies, anyone?
And I suspect that those making contract models available for free online (see this January 2009 blog post) expect that their users will include businesspeople looking to do their contracts on the cheap.
What determines whether it makes sense for a businessperson to be the one to draft or review a contract? Maybe one is dealing with a spectrum. At one end, the do-it-yourself approach makes sense. At the other extreme, it most certainly doesn’t. Determining where along the spectrum any given transaction falls would be a function of interplay of a few factors:
- Is the transaction very simple?
- Is the businessperson experienced?
- Is the transaction for a relatively low value?
- Is the businessperson unable to afford a lawyer?
If the answer to all those questions is yes, that would suggest that it might be reasonable to have the businessperson draft or review the contract. But if the answer to any of those questions is no, or if the answer is uncertain, you start moving towards the other end of the spectrum.
I suspect that the overriding factor is whether the businessperson can afford to have a lawyer involved. Contracts are so pesky that the safest bet to bring in the lawyers every time. But obviously many people won’t have that luxury. I imagine that the lawyers among you would nevertheless dearly love to have clients err on the side of bringing you in early—one of the more frustrating assignments is having to rescue the client who got in over his or her head.
There is a bullet missing from your list:
“The transaction does NOT involve the transfer or licensing of any intellectual property rights.”
I agree that the overriding factor is whether legal access is affordable. We are simply too expensive for most freelancers and very small businesses to use a lawyer when they should. I remember the last time I practiced at a law firm, in 2004. My hourly rate was $420. Just two weeks of work amounted to a $42,000 bill. Based on my salary at the time, I didn’t have the money to hire myself! Today, top law firms bill even more, at small firms it is very hard to find a decent attorney for less than $250/hour, and almost impossible to find one that will charge a flat fee for the entire matter so the client has budget certainty.
Instead of meeting this need, the profession instead demonstrates a general resistance to methods that would make legal services affordable, such as alternative fee arrangements (particularly flat fees), streamlining contract language (as Ken always suggests) and improving productivity through knowledge management, automation and process improvement.
Thoughts from a solo practitioner, former house counsel:
It amazes me that clients fail to recognize that contracts involving important undertakings require substantial lawyering. I am sympathetic to fear of fees and I, too, could not afford much of the work I do for others. One solution may be to let the client prepare a first draft (in Word), email it to me and let me go to work on it. Talk on the phone, not in person. Once you get the full picture of what is involved, put a fair cap on the bill — provided you are not required to trade drafts with somebody else’s lawyer. THAT can get very expensive.
Cliff Tuttle
Pittsburgh Legal Back Talk
http://www.pittsburghlegalbacktalk.com/