Let’s go straight to docs

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Something only a private practice lawyer would think to say, usually as a reaction to a perceived lack of time or resources.

“Oh cripes that time line is hyper-aggressive, and this could all go totally pear-shaped. We don’t have time for a term-sheet; let’s just crack on and go straight to docs.”

Look: if you are doing something easy and homogenous like an NDA, maybe there is some sense in that — though none in engaging a private practice lawyer in the first place, of course. (What are you, mad? Go OneNDA!)

Whenever engaging external counsel does make sense, dispensing with a termsheet is a charter for utter disaster.

The main points of any commercial arrangement are generally few, easily articulated and well-suited to the clipped tabular adumbration of a termsheet. There they can be haggled over, refined and beaten to a fine copper plate in the abstract, by the principals, quickly and without ceremony. These women and men should trust themselves to agree terms without legal help — it’s their money, after all — even if we forensic rentiers quail at the thought. If they do, then by the time we get a look in, the heat will have dissipated, the commercials will be settled, the merchants’ minds will have met and they will just want to get cracking with whatever they have resolved to do.

Each will, therefore, urge its counsel on with the following words:

“Look, just get on with it, would you? I am not paying you to fiddle around in the weeds. Make sure the termsheet is adequately reflected and we haven’t missed anything obvious, but in any weather be sharp about it. Do not dilly dally.”

This will disappoint most legal eagles — like all performance artists, we like to be the main event — but still it must be the critical path.

“Going straight to docs” is a legal eagle’s high wire act, but it is her client who has to do without the safety net. To be sure, the first cut of a trust indenture may capture all those key commercial elements, but it probably won’t, and even if it does they will be dispersed, randomly and cryptically, throughout its 90-page heft.

Which one must read, in toto. The modern rechtsadler knows but one way to review a legal contract: she must start at the beginning and work her careful way to the end. Should she meet a cavalier indemnity, limitation, exclusivity or warranty on the way — however ill-judged, insignificant or uncalled-for — she will be drawn to it as a moth is to a lamp. She will have to address it. To hell with the main commercial terms: this existential risk must be addressed, and now.

Whereupon, strap yourselves in for six months of torture as the performance art grinds on: every typo, representation and scheduled form of drawdown request notice will waylay progress, so that the lawyers may never make it to the gritty commercial terms. They may never even find them. Most likely, they will never even know what they are.

A good termsheet is a discipline: a cocktail napkin; the contextualised essence of whatever the turgid entropic mass of final verbiage will, in its perverse and circuitous manner, eventually reflect.

Don’t ever go “straight to docs”.

See also

• Talk, don’t email
• Private practice lawyer
• The weeds
• Verbiage
• OneNDA