If you are going to haggle, it’s extremely important to improve your negotiating sophistication when handling a deal.  Too often, people are not aware of where the biggest risks are.  Even lawyers usually miss the key issues (as they tend to be overly focused on the possibility that the parties will sue each other, which is highly unlikely).

So what are the big risks?  Pay close attention to the following:

(1) Description: What are you buying or selling?  Make sure you include a clear, inarguable description of the good or service being sold or purchased.

(2) Price: What’s the cost?  There should be no doubt as to the fee, and, if you are breaking it up into several payments, make sure you clearly indicate the due dates for each installment.

(3) Delivery: When do you get what you want?  Have a clear statement as to when the seller has to supply the good or service at hand.

(4) Exit: How do you get out?  If you are unhappy with an ongoing arrangement (typically a service), you need a termination right that will let you kill the deal and move on to another provider.  The same is true for a seller, who may find a particular customer too unruly to continue to do business with.

Bear these key risks in mind next time you haggle, and you will greatly increase the chances that you will walk away a happy dealmaker.

If you enjoy this content, add me at twitter.com/JasonAnderman, thank you.

Web 2.0 for Contracts: Where to Go, What’s Free, What Costs Money

Get up to date on cutting edge web sites in the Law 2.0 world.  Jason Mark Anderman, President of WhichDraft.com, will provide an overview of some of the latest and best document, contract, and matter management sites for your use, as well as a demonstration of how they can be used in the course of your day to make you more productive.

Now people in Silicon Valley may be amused by me saying “Web 2.0,” given that the term seems to be gasping for its last breath, but in the legal world we’re a bit behind the times when it comes to technology.  After all, for us lawyer types, Web 2.0 is still trying to take off!

So here are the sites I recommended during my presentation (somehow WhichDraft.com magically landed first on the list).  Read ‘em and weep:

Free Sample Contracts and Contract Creation Tools

WhichDraft.com

First Draft 

Free Sample Contracts

JDSupra

ScribD – Contracts

DocStoc – Contracts

Social Media

Legal OnRamp (Want to hang out with the most cutting edge lawyers around?  Legal OnRamp is the social media web site for lawyers and legal professionals)

Premium Contracts

MyLawyer (this is an impressive site, contracts and legal service integrated in one package with a flat fee; sadly, only offered in the UK; the owner is a company named Epoq that does offer a virtual law firm platform in the US called Direct Law)

Practical Law Company (tremendous resource for contract knowledge management)

Premium Matter Management

Mumboe (great Software as a Service (SasS) matter management premium site)

Premium Confidentiality Agreement Tools

BaselineNDA (Pretty amazing application, with some limitations, it can read and mark up a confidentiality agreement for you)

Not Web 2.0, But Free and Useful Sample Contracts

OneCLE

The Electric Law Library

YourFreeLegalForms.com

Why would contract people care?  Well, given the uproar Ubuntu has caused in the IT world, one would think Mr. Shuttlesworth might have a pearl of wisdom for us about implementing change (a huge issue for people pushing for clearer language in the confusing contract world):

“To persuade people to make changes, you have to offer them compelling and dramatic improvements. If you are asking people to change the way they work, it isn’t enough for a product to be slightly cheaper or slightly faster or slightly newer. One needs to deliver a 50 percent saving in cost and improved reliability (or efficiency or functionality) to create space for one’s product in a crowded marketplace. You have to be 50 percent, 100 percent better. Not just ten percent.”

Basically, the argument breaks down to the idea that people just will understand that something dramatically better is worth obtaining, so if you offer a breakthrough product, then you can make a difference.

I wish I could say I shared such a similarly rosy view of the world.  Unfortunately, I think Shuttlesworth’s faith in breakthroughs misses the incredible power of path dependence.  Douglas North, from my alma mater, Washington University, won a Nobel Prize in economics for explaining how people will make highly inefficient decisions if they support a particular way of doing things (or path) that they are particularly attached to.  This is not because the transaction costs are so high that people can’t afford to switch.  It’s simply because people are uncomfortable with change.  At my previous job, I created a new method for negotiating contracts that reduced the time to conclude a deal by more than 60% (on average), but none of the other lawyers wanted to adopt this method, mostly because they would have to change the way they do things.

Ken Adams, perhaps the best expert on contact drafting in the United States, touched on this very idea recently, referring to “The Forces of Tradition.”  Adams discusses the frustrations of lawyers who try to provide clear, concise contract language and run into lawyers who absolutely refuse to accept this, instead insisting on the complex, mind numbing legalese that makes our work impenetrable.  As Adams says, “it’s chaotic, and it feeds off confusion, expediency, inexperience, and timidity.”

Adams reminds me of the time I was working at a major law firm and all the associates were required to take an all-day seminar with a contract drafting expert (who charged the firm a hefty fee, I’m sure).  At the end of the day, I revised a contract I was working on to match the expert’s suggestions.  When I received my draft back from the partner on the deal, I noticed that he crossed out every change I made and replaced my concise provisions with lengthy, confusing language!  While Adams thinks The Forces of Modernity will eventually win, I am not so sure.  Regardless, it will take a very long time.

I do think, though, that there are pockets of opportunity for smaller firms and solos to push forward better contract language.  And, of course, here at WhichDraft.com, we hope to play a useful role in this regard.

If you enjoy this content, add me at twitter.com/JasonAnderman, thank you.