Business law. One of my great selling points is the variety of legal projects I’ve worked on over the years. I can draw on my experiences to quickly and efficiently finish a client’s project. My experiences have shown me, however, that for pretty much everything I do there is no “one size fits all” or “template” solutions to anything other than basic legal work. My real value to a client is counseling, showing what others may have done in the past to solve a similar problem, getting the client to think about and make decisions about its own situation, then drafting the words to get that done. Words on the page are the final product of a process we go through to get to a contract. That’s why we call good lawyers like myself “counselors” and not “draftsmen.” For well done, custom drafted legal work, there is no “what do other businesses usually do …?”
I hear this a lot when asking business law clients to make decisions about their business transactions and about contracts I’m drafting: “What do other people do?” I heard it today. And I understand that for many business owners, the project or transaction I’m working on may be unique to them, the first time they’ve done something like that. The answer, then, is, other people – if they’re my clients – listen to my advice on the options that are available, but make their own decision as to what solution works best for them. And even using “industry standards” as a reference to other people’s solutions, I rely on my clients to know those and inform me of them. It’s your business, after all. I’m not immersed in your industry, but you are.
No Such Thing As A Form Contract Or Document
Any lawyer that advises you, “this is a form, go ahead and use it,” or, “everyone does it this way,” and tries to sell you an expensive template that he drafted for someone ten years ago, or worse yet, downloaded from the web, is doing your business a disservice. In my years of practice I’ve heard, “this is a form lease, just go ahead and sign it” probably 50 times. And out of those 50 leases I’ve reviewed, not one of them was even remotely similar to any other (except for non-essential standardized terms). My job isn’t to pull forms off the shelf and fill in some blanks. I get paid to ask questions so I can figure out where your particular project may go South and plan for that possibility, or to find out how to define a successful relationship between your business and someone else, and put that clearly and succinctly on paper for everyone to review and agree to and rely on as the project progresses.
Remember: the contract you sign will affect your relationship with another person or entity, for better or for worse, with 100% certainty. Isn’t something that critical to your success worth customizing to your situation, instead of relying on “everyone does it this way”?
My Process For Counseling Business Law Clients
Case in point: This week I’m working on a real estate development contract between Moneybags and Developer. They’ve agreed in principle to three potential revenue streams for Developer to profit from the project: a fee for development and construction; an incentive based profit-sharing bonus on a portion of all profits; and a pure investor share of profits if the Developer wants to put his own money down. “What do other businesses usually do” Moneybags asked me when discussing the values for these three revenue streams.
My answer was, “this three-stream profit sharing is a unique structure that I’ve never seen before so you and Developer have to agree on the values for these three profit streams.” Not that I haven’t seen one, or two of these ideas in combination. But adding the third stream is a unique situation that may effect the value of the other two.
So, for example, on the incentive based profit share, is a 20% share to a manager of a successful project “normal”? I don’t know. There’s no industry standard that I know of; and even if there was, there might be a reason for this client to change that share to 10%, or 50%. Difficulty of the project, what are the potential profits, how much time will be spent, potential for a total wash out of any profits after six months’ hard work, how much work may be involved, how much will the principal run the project or how much reliance is being placed on the Developer? All of these factors must be considered. You can see how every situation is unique in that sense.
Is an incentive based profit share on a real estate development project something other businesses do? Sure, I’ve seen it before. But “what do other businesses usually do?” when coming up with that split? There’s no “usual,” especially with this third potential revenue stream added in. Your project is your project. Make your deal, with my advice of course, and let me get it on paper so everyone can see it, discuss it, run their own numbers on viability, send it back to me and each other for more questions and answers, redrafting, and agree to it.
There’s no other way I can help your business because there’s no “what other people do let’s just copy that” in my business law toolkit. Don’t let any lawyer sell you otherwise. Yes, I said “sell”.
Get It Right For Success
I absolutely understand that, especially for new ventures or new relationships, not every business owner is used to the rough and tumble of contract negotiations. No one wants to look the fool, or be the guy who killed a great deal, or give away the shop, or walk away from weeks of hard bargaining. But the reality is that I can’t fill in the important terms of your business relationships with “the usual” or “this is how everyone does it”. Only you can define those relationships. So, what do you want to do?
For this and all your businesses legal needs, call me in Asheville, Hendersonville, Fletcher, Waynesville, and all of Western North Carolina at (312) 671-6453, email at email@example.com, or for more information palermolaw.com.
Check out this article I wrote on business succession planning: http://www.palermolaw.com/financing-your-business-succession-plan-article/