I was busy reading an article on Why Lawyers Don’t Run Startups (And Why Entrepreneurs Hate Lawyers) when I ran across a terrific lesson learned from the article’s author, Steve Blank.
In every company that gives you a contract there’s someone who wants a deal. When you run into contract issues, call them first for advice.
In my experience, this is SO true. I’ll often review and negotiate contracts for clients. Often, there are terms that are unacceptable and put the client at considerable risk if they were to give in on the terms. I’ll always ask them to go back to the person who has the most stake at getting the deal done to find out if a compromise can be reached. Hint: It’s rarely the lawyer on the other side of the table who could care less about the deal and cares much more about a brilliantly written contract that forever protects the other side from every possible liability. It doesn’t always work, but more often than not, we are able to move past the stalemate.
As a part of the process, it’s important for business people to communicate their overall strategy to their lawyer. As the article suggests, what are the short term consequences of signing a deal? What can screw you in the long term if you agree to the contract? What contract terms really matter to you? Many lawyers concentrate too hard on protecting their clients from EVERYTHING. When in reality getting a deal done on terms that you can live with should be your priority.