Deal Closers and Deal Killers
Even in big cities, the "commercial bar" -- the group of lawyers who regularly do transactional work in a particular field, such as real estate -- often know each other pretty well, by reputation and experience. After you've been negotiating loan agreements or writing leases for a decade or two, you get to know a bit about the other regular players in your region. You hear that Larry or Curly is going to be opposite you, in a lease negotiation, and you already know, more or less, that you're going to have a long negotiation -- or a short one; that counsel knows their stuff and can argue efficiently –– or not; and so on.
Lawyers may not always be able to convey the full story to their clients about these things. For one thing, obviously, there's some degree of professional competition, so clients sometimes may need to discount what lawyers say about each other. Even our self-consciously stately profession occasionally sees a little "trash talk," like you hear between football teams sometimes.
On the other hand, in my experience, lawyers are usually reluctant to offer information about other lawyers unless expressly asked. Some of this is basic politeness; some is the idea, common in the profession, that lawyers should offer their thoughts only on narrowly defined technical legal issues. In addition, some clients tend to hire their lawyers on the basis of old relationships, or who their owners or partners require them to use, or other soft factors -- in which case there may be little point in talking about the relative merits of opposing counsel. So we smile and do the best we can with Larry or Curly.
And yet, underneath all that, sometimes, there are recurring critiques passed around among circles of friends in our profession; and some may have more than a kernel of truth in them. While I believe that most lawyers try their best to provide good service to their clients, there are a few who fail to do so, and who end up killing, or significantly delaying, deals.
Some of these lawyers are very smart: sometimes too smart to overlook any issue, no matter how minor, including any drafting preferences. They frequently overreact by effectively rewriting every other lawyer’s work, whether or not that is important to the deal. Like the old joke, this personality type has to be not just “Mr. Right” but “Mr. Always Right”. He inevitably has a good reason for every one of his 900+ comments on a straightforward lease or purchase contract, and usually has convinced his client that only “Mr. Always Right” can provide the mystical protection needed by the client. The fact that “Mr. Always Right” is being paid by the hour, and that this approach yields much more time-consuming and fee generating negotiations is overlooked as a side effect by his client, who has bought into this approach.
But other lawyers may not: they may know that this impractical approach may kill, rather than close the deal, and may take steps to limit the damage to their clients’ interests. Over the years, I've known several large site purchase or lease programs, where lawyers give a per-site bulk rate or fixed fee . . . but negotiate some "outs" to deal with out of control opposing lawyers. For example: we will take each of your ten your site purchase agreements from term sheet to closing, for $X per site, if you use our term sheet form . . . unless the other side demands more than four rewrites, or is represented by Larry, Moe or Curly. In which case the fixed fee goes up, or we go to hourly billing.
There are two morals to this short story. One is that a lawyer who wants to argue every point, whether or not it matters to the deal, poses a real risk to closing speed, costs, and alternative billing arrangements. Today's environment for real estate legal services is changing. That's a good thing: it's becoming more efficient, which is change for the better. Increasingly, lenders, borrowers, landlords, tenants and developers all want their lawyers to work efficiently, focus only on what matters, and drive deals to close. So, as a client who uses lawyers, one of the questions that's rising in importance for you in this new economy is: do you know if the lawyer you're using is a closer or not?
The second moral is, if you're a lawyer, you don't want to build a reputation that makes people call you out as a special footdragging problem in their pricing arrangements. Do us all a favor: don't be Larry, Moe or Curly.