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What is the role of a lawyer today?

July 23, 2015

My blog earlier this week drew an interesting response from Ken Adams and his co-author in a recent article offering “Top Ten Tips in Drafting & Negotiating International Contracts“. The ensuing debate seems to me to encapsulate the dilemma facing the legal community today. Essentially, are they narrow (but important) specialists in law, or should they be applying their knowledge of law within a much broader remit of ‘business advisor’?

The former role can be problematic – and I was pointing to those problems in my commentary on the original article. Essentially, good drafting or negotiation is driven by overall context. If you do not consider the broader purpose of the contract, it is probable that the resulting terms will either be inappropriate or inadequate. My view is that the suggested ‘top tips’ run into precisely this issue because they are being made without reference to context – and the context will in many cases change the priorities or choices of what or how to draft and negotiate.

Much of the work undertaken at IACCM aims to provide an increasingly factual base for decision making. We seek to reduce the extent of ‘mystery’ and ‘opinion’ and move towards positions that are based on solid research data, experience and judgment. It is in that context that I produced my counter-view of the ‘top tips’ for any lawyer drafting and negotiating an international contract. Essentially, their work must begin by understanding the context and establishing the risks. Only then can they decide the issues around use of language, use of local counsel, choice of law etc.

There are many examples to illustrate the importance of lawyers engaging with the business issues. For instance, in my blog, I highlight the challenge of getting paid. This is fundamental to an organization’s survival and is frequently an issue in international contracts. If the lawyer does not understand the practices and norms of their counter-party, they will struggle to draft and negotiate terms that bring security in this area – and potentially the rest of the contract becomes pretty much irrelevant. Similarly, anyone preparing an international contract must be aware of the regulatory environment in the country or countries involved. Ideally, they have developed personal expertise in key areas such as data protection, competition law and export regulations – but if not, they need to be aware of their ignorance and find a way to fill the gaps. Finally, what is the time-line for getting this contract completed and what is the budget available for its production? Understanding factors such as this are critical to the lawyer operating in the real world – and again will influence the way they set about their work, the terms they draft and the priorities they establish.

Without knowing these things, how can you begin to draft or negotiate anything?

As I highlighted in my original comments, the ‘top tips’ article raises important considerations, but practical experience and research suggests that other items must come first. If lawyers are going to maintain status, they must become more effective in offering business advice. This is not a personal opinion; it reflects discussion with many lawyers – in-house, within law firms and at law schools. Indeed, it is a challenge that is common to all professional groups.

Ken Adams is a respected expert on the topic of contract style. I do not always agree with his pronouncements on this topic, but I defer to his expertise and fully expect him to challenge my rare ventures into this aspect of contracting. On this occasion, Ken went beyond style and into substance – an area where opinions start to give way to facts and processes, where what you are writing takes precedence over how you write it. Because this area of substance is where so much of my work is done, I feel it is appropriate to suggest alternative priorities – and in doing so, have inevitably ventured into the debate I mentioned at the outset – ‘what is the role of a lawyer today?’

5 Comments
  1. David Munn permalink

    Tim,

    Do you really see a lot of examples of lawyers being so narrowly focused and ignoring the business context in which their clients operate? Your overall theme seems to be that lawyers are operating that way and that they need to change. But what you describe isn’t typical of the lawyers I know. In-house lawyers in particular are very sensitive to the business environment and context. And the role of business advisor is one that most lawyers I know play every day. That’s the reason many of us became in-house lawyers. The specific examples you give (focus on getting paid, understand the regulatory environment, understand the timeline and budget constraints) are the kinds of things we have to deal with all the time. Those who don’t keep those broader issues in mind, especially when it comes to drafting and negotiating contracts, are not going to have jobs for very long.

    If there are examples of lawyers’ ignorance or taking shortcuts it’s most likely because of the competing goals of speed and efficiency that we always have to take into account. Except for a few very specialized lawyers, most of us don’t know everything we need to know. And especially in the international context, few of us have the luxury of time to research every aspect of a given transaction. Or the budget to hire outside experts to advise us on every deal. All of that is a part of evaluating the risks and tradeoffs in a specific situation. In other words, acting as a business advisor as well as a lawyer.

    Can the legal profession improve? Certainly. Where I think I agree with you is that almost all lawyers could do better is in the area of standardization and process. And part of that may mean that lawyers should step aside and let others (including computers) take the lead where transactions are more routine and the lawyers’ expertise or perspective isn’t needed. And I think that a lot of companies and their lawyers are working toward those kinds of goals. Most of us would prefer to focus on interesting work where we can add value rather than routine transactions. And that gives us more time to address the kinds of things that you would agree are most important for commercial transactions.

    • David
      Thanks for your comment.

      No, I don’t see many lawyers ignoring the business context for contracts. And that is precisely the reason why I questioned the Top Ten Tips article, because in general it does not consider context. Those tips – and the suggested approach – may or may not be appropriate.

      What I do know is that anyone planning to draft or negotiate a contract should first ensure they have explored the goals and the environment in which it will used. In the case of international business, that means a wide variety of contextual issues must be examined – and these are therefore the areas to feature as ‘Top Tips’, because they are the primary risks.

      Tim

  2. A search of lawfirm websites across the world brings up many, many examples of proclamations such as ‘we give legal advice in a business context” However, the contracts emerging from many of such firms, are often little different from those churned out 10 years previously. It might be that while many lawyers across the world now recognise the critical importance of working with the specific business context, they are not sure on what actually needs to be different to achieve this, beyond it being a platitude.

    As long as lawyers see contracts as weapons of protection and not a framework for trading relationships, we will continue to see the disproportionate focus on the wrong things. Most lawyers do not go into to the profession to cause mayhem to their clients but I wonder how many contracts drafted with the best of intentions, manage to achieve that result?

    I have been in practice for 25+ years (Big Law, corporates and smaller firms, buy side and sell side) and reflecting back with honesty to my earlier years, I can identify contracts where I dutifully followed the traditional path of good advice and created a bullet proof weapon which, down the track, actually failed to deliver the very protection it sought.

    IACCM’s Top Terms Report 2014 was such an eye opener when I saw it last year for the first time, in my joint role as an in-house counsel and lawfirm. It both confirmed that I had in the past been taking the same bullet proof approach as other counsel around the world and then also confirming that I had most likely also been missing the critical concerns of business. The Top Terms Research provides the previously missing evidence to support a decision to take an alternate approach.

    I joined the IACCM team precisely because I want to work with the enlightened lawyers and contract/commercial managers who are helping their organisations and clients by delivering increased bottom line profitability as a direct result of their focus on contracts as frameworks for business and not weapons of mass confusion. These people are frequently taking radically different approaches to the way they contract and seeing the benefit.

    The legal profession across the world (in house and out house) needs to take a good hard look at what they need to do differently, to ensure that they remain relevant. Every profession, every job is impacted by globalisation, digitalisation and a wealth of global trends and the law is no different. Until we change the public dialogue to demonstrate, in a wealth of different ways, that the ‘legal advice in a business context’ is not just an empty platitude, we will be increasingly side-lined.

    The exciting thing is that, for those we see their legal role in a wider bigger business context, the future offers the potential for more satisfying and rewarding careers.

    Tim’s blogs are provoking the very discussion the profession needs to be having. We have nothing to fear from seeing the world through a different lens and having lively debate from different perspectives about how the new frontier for contract lawyers might look.

  3. Trish Hyde permalink

    On the eve of the IACCM Conference in Brisbane, Tim raises an excellent question, that I hope we get to discuss tomorrow – ‘what is the role of lawyers today – and into the future?’

    For the past five years I have researched and closely observed the in-house legal profession in Australia while CEO of ACLA. With two Benchmarks and Leading Practices Reports and a Masters of Commercial Law under my belt, I feel confident in chipping in on the debate – not to challenge or even comment on Ken’s work, but to reinforce the critical point Tim is making – all things in context.

    The legal profession, in my opinion, is too insular and closed to external thinking. As a result in-house counsel can sometimes be their own worst enemy when it comes to delivering value. Businesses want commercially savvy and timely advice. In my experience, I have not come across a CEO who has commended their GC on the drafting of a contract. Naturally they care about the outcome and that is dependent on the context.

    Some organisations embrace their legal team as true partners in how they create value. This is where is works best. However, there are just as many organisations that see legal as part of a process to be endured. Unfortunately, the research shows that where the in-house lawyer sits on the continuum is only partially determined by the lawyers skill set, the rest is determined by the nature of the organisation and how it views legal.

    In-house counsel are not always supported in this by the external peers, with research showing that only 50% of GCs believe their main law firm manages matters to the client’s benefit ahead of the firm’s commercial interests.

    The rest of the world operates in a different paradigm where the value of work is not measured by the quantity. Some GCs are managing the value delivery better than others.

    This leads us to a new conundrum for the legal profession – where will tomorrow’s in-house counsel come from? As in-house counsel push back on law firms and refuse to pay for junior lawyers ‘to train’ on their work and firms have reduced their intake of graduates – where will the in-house counsel lawyers come from in five years’ time? It certainly won’t be from the in-house profession with less than 2% of organisations training graduates.

    Add to this the income expectations that a reduced number of 5 year PTE lawyers, and the cost to train them to be effective in-house counsel (over 60% of GCs say it takes over 12 months to transition) and the profession may price itself out of the market.

    Putting this all into context, it is time for the legal profession to look outside the box to avoid becoming only specialists engaged when needed to a profession that embraces diversity and law in context.

  4. I have argued in many of my blogs that lawyers need to be more engaged in procurement contract management upfront.
    http://scm.ncsu.edu/blog/2013/03/29/do-we-need-more-lawyers-in-procurement-or-do-lawyers-need-more-procurement-managers/

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