The ideal that you must have come to realize at this point is to avoid the legal beagles. Fortunately, there are steps that you can take and that have been effective for me about 98 percent of the time over 30 years. In fact, the only time I’ve been unsuccessful in avoiding the lawyers is when there is a tough corporate policy demanding it, and even then I’ve sometimes evaded the seemingly inevitable (see the case study earlier about the buyer who could write checks but not sign agreements).
The avoidance part is in your hands, and here are the basics:
1. Don’t use your lawyer.
In the next segment we will discuss when to consult with your own attorney but never start from that corner. If you use your attorney he or she will naturally be as conservative in your favor as the client’s legal force would be on its turf, and you’ll wind up with a transmogrified proposal that looks like a declaration of war on Lichtenstein. Your lawyers will be trying to protect you. Let me assure you that’s not what will happen. They will sink the agreement just as assuredly as if you took a torpedo amidship. So don’t make that call at the start.
2. Avoid “boilerplate.”
I provide proposal examples online as part of this book’s Appendix. These are meant to give you examples of the approach, just as the details earlier in the book have. They are templates. But you’ll notice that they contain no legal phrases, perse. Nowhere does it say “third parties shall hold harm- less” or “any disputes will be settled by courts in the state of North Dakota.” Once you insert this stuff you might as well have placed a salami in your suitcase amid all those sniffing beagles at customs when you return from overseas. You’re toast. (Well, you can’t bring toast in, either, as I think about it.)
3. Make the proposal a continuation of the conversation.
The proposal, as we’ve established, is a summation, not an exploration or a negotiation. Keep your language conversational. You can see in my examples phrases such as “You will be accountable for . . .” and “I will be ac- countable for. . . .” It doesn’t say “Accountabilities established and agreed, the violation of which constitute rupturing the terms herein. . . .” If you write in the same manner as you’ve spoken, there shouldn’t be any tropism toward the legal library.
4. Forewarn your buyer.
After achieving conceptual agreement but before leaving the buyer’s office, discuss the legal implications in this manner:
I’ve found that we can begin rapidly if you and I can do so on a handshake, but occasionally the legal department becomes involved. Is there a way we can avoid what is inevitably a significant delay?
The buyer might set you straight and say, “Oh, I work with legal all the time and if I say I need something back in 24 hours, I get it.” That’s great, then ask, “Is there anything that we’ve discussed to this point that might give them cause for pause, or any standard issues they tend to look askance at?”¹ Put a plan together that will try to avoid the legal quagmire, or at least expedite a path through it if it comes to that.
1. Don’t include penalties.
I’ve always detested penalty clauses because they are inconsistent with a solid, trusting buyer relationship. They typically stipulate that interest will be added if fees are late beyond a certain point, or that extensions in the timing caused by the client’s scheduling problems may result in additional fees. Once you insert these kinds of caveats, the buyer has little choice but to solicit a legal opinion. After all, it’s the buyer’s signature going on the document, and it’s one thing to commit one’s budget but another to commit the company to possible expenditures that can’t be rationally avoided. (The buyer can’t absolutely control accounts payable or some other department’s cooperation in most cases.) Besides, if this is a trusting relationship, then you should trust the buyer to meet commitments without threats.
2. Provide reasonable assurances.
You have some strong leverage in the proposal in your favor, most particularly the terms of payment, which are minimally 50 percent on acceptance and might be 100 percent on acceptance minus a 10 percent discount. (Remember that some firms’ rules call for the automatic acceptance of discounts.) With that kind of money being paid—probably unprecedented with prior consultants unless they’ve read my work—the client will rest better with some “protection” or quid pro quo. That’s why I recommend statements in the proposal such as:
We guarantee the quality of our work and performance of the accountabilities listed above. If that quality is deemed insufficient, or accountabilities are not met, and we cannot correct the deficiency within a reasonable time period, we will refund all fees paid.
That may seem too open an interpretation to you, but it’s only an option for the buyer, it’s already based on a trusting relationship, and you’re not guaranteeing results (which would be unethical) but rather your standard of performance. This gives the buyer something to rely on in exchange for rather aggressive fees and terms. (I’ve had one client in 30 years, early in my career, ask for and get his fee back, because I over promised and dealt with people whom I mistakenly thought would be committed to the work. My fault. Like being hanged in the morning, this marvelously focuses your attention.)
3. Be prepared to deal with issues about you.
I’ve actually been asked on rare occasion, “What happens if you die?”! (I’ve usually responded, “I don’t know, but I do believe in heaven.”) A buyer will sometimes raise an issue about a solo practice that wouldn’t be asked of McKinsey & Co. Don’t stammer and waver. You don’t want the buyer to get a legal opinion. Mention that you’re in great health, there are others who may cover for you as you would for them (the real issue is sickness and disability, not death), and that in the worst case you hold the client funds in escrow and they are easily accessed and re- turned. You may note the longevity of your company and the types of clients with whom you’ve dealt. You want this to be a casual conversation, not nine paragraphs of legal literature.
Now, what happens if, despite it all, you need to consult with your own lawyer?