I’ve heard people asking this in the past, but it is only recently, since I have been trying to set up my own business, that it has affected me personally.
A client asked me why lawyers always want to provide a 30 page long Shareholders’ Agreement covering every risk when what was wanted was something short that just covered key points.
I can sympathise, but equally I can see things from the lawyer’s perspective. Let’s look at four issues:
- Drafting: Do you think every agreement is hand crafted from scratch? Well, it isn’t. That wouldn’t be cost effective. Usually a template is tailored with a bit of cut and paste. And guess what: the template is about 30 pages long. (It is true that if the document was created from scratch and charged on a time-spent basis it would probably cost more. Reinventing the wheel is usually slower.) An alternative would be spending ages condensing content down. Basically, a redraft. Again, not very efficient in terms of time/cost to client. Would you rather have shorter or cheaper if you had to choose one?
- Risk: What about covering all the risks? Is it better to give you as a client what is best for you in terms covering all possible risks – or to give you what you want even if it protects you less? Let’s face it, if you get less protection my risk is higher too. You are more likely to have grounds for a claim against me later. For a big risky project I might be able to include a risk premium element in the fee. That isn’t going to be likely for most Shareholders’ Agreements. Nice. Lose/lose for me. Win/win for the client.
- Experience: Another consideration is who is doing the work. It takes a certain amount of confidence to ruthlessly cut things down – knowing what you are doing, measuring the risk. Even if the lawyer tells the client what he/she is doing in a ‘covering’ (himself/herself) letter – that doesn’t guarantee the client won’t blame the lawyer later if anything goes wrong. You can’t expect a junior, who may do the work to keep costs down, to have the confidence to do this. On the other hand, you don’t want to pay for a senior partner’s rates. Most of all, you don’t want to pay for the junior doing the work and the partner re-doing the work.
- Job Satisfaction: This is an issue for the lawyer rather than the client. However, it doesn’t give masses of job satisfaction to produce something that may look as if you didn’t know what you were doing or as if you couldn’t be bothered – even if this isn’t in fact the case. Judge not lest you yourself be judged…
So which makes me the better lawyer: doing what I think is best for the client or doing what the client wants? What do you think?
Originally posted 9 November 2012