Does Experience Get In The Way Of Doing Deals?

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Today, we intend to serve up some food for thought. After re-reading it ourselves, we fear the offerings are probably for those who already have gotten the message. If, however, Ruminations recruits one more such person to the cause, we’ll be happy.

Experience is a valued trait for those who negotiate leases and other agreements – the more the better. Does anyone disagree? But, experience can serve as a straight jacket, limiting movement, making the “deal” fit the form, not the other way around. Creativity can solve problems and overcome negotiating bottlenecks, but the “untested” can be an invitation to later problems. Can a balance be struck?

We think that most leases and other agreements are handled by people who live in a box, the walls of which stopped moving a long time ago. They have a toolbox full of tools accumulated over the years, but stopped buying new tools a long time ago. So, they are only willing (and able) to work out problems if they have a tried and true “clause” or solution in their arsenal. What is more is that they don’t even understand the issues because they stopped buying new tools in 1995 (or whenever).

If we are right about most negotiators being unwilling to think outside of their personal (tool) box, or even if we are right only some of the time, that’s too bad. It makes for unpleasant negotiations, documents that don’t meet the needs of the parties, and a foundation for later disagreements and even litigation.

Oh, yes – we know that negotiating or drafting agreements, especially long term ones that need to anticipate what might happen in the future, is risky. We also know that very few of us are empowered to take risks with other people’s money or assets. So, for that reason, we are most comfortable with maintaining the status quo. [Status quo is Latin for the “existing state” of things.] Professor Adam Grant, in his newly released book, Originals, writes about those people who, when confronted with a challenge, always revert to their “default” state. They reach into their toolbox for what is in there already, the status quo, their collection of clauses. [Don’t blame him for the previous sentence.] They lack curiosity. They are unwilling to challenge or question their personal “defaults.”

Professor Grant asserts that the starting point for problem solving is curiosity – “pondering why the default exists in the first place.” We’ll leave it for interested (curious) readers to search for this book on their own, but we would be amiss if we didn’t tantalize you with the following words he wrote:

We’re driven to question defaults when we experience vuja de, the opposite of déjà vu. Déjà vu occurs when we encounter something new, but it feels as if we’ve seen it before. Vuja de is the opposite  ̶  we face something familiar, but see it with a fresh perspective that enable us to gain insight into old problems.

How do those thoughts apply to we who work every day trying to strike mutually acceptable agreements between parties who have different needs, different perspectives, and different risk postures? It starts with building a bigger tool collection. And, that doesn’t mean a bigger set of forms or stock clauses. There is no shortage of that kind of material out there.

What we mean is that we’ve got to start questioning the defaults, the clauses and stock agreements and solutions we’ve accumulated over time. One example that should strike home with most readers is our insurance clauses. Ruminations postures that 90% of us have little idea what they mean. That estimate comes from doing program after program on the subject of insurance principles for attorneys (and others). That estimate is informed by patiently listening to people trying to explain what they have written as an insurance provision in their lease or mortgage. We could say the same thing about condemnation (eminent domain) clauses. And, we’ve only picked those two categories because they are lowest-hanging of low-hanging grapes.

How can that be?

It is because we just aren’t LISTENING to others, especially those on the other side of the deal. We don’t have to accept their points of view, but we owe it to ourselves to be able to explain (to ourselves) why we won’t accept an adversary’s point of view. That’s a key way by which we learn.

Another way is by attending programs, whether electronically or in person, reading articles and even reading Ruminations and other such materials. Discussing concepts with colleagues, both inside our own offices and outside them, is an excellent exercise.

Sometimes, the “form” doesn’t fit the function. We do need to be able to write agreements (usually only parts of them) from scratch. Keep this in mind – the world’s greatest chefs and the chefs in your favorite, though unknown, restaurant don’t follow recipes; they write them. Yes, they write their own recipes because they UNDERSTAND food and how food works. We need to understand real property and how real property agreements work.

What can we do with a growing collection of tools? We can build agreements that are custom designed to meet the needs of the parties: bespoke leases, purchase agreements, loan documents, agreements that fit the parties better than any off-the-shelf form will do.

Has Ruminations preached this message before? Certainly, and the reason we do so again is because we think there is nothing more important to us and our colleagues than doing better and better every day. We owe it to those who have the courage and confidence to let us memorialize their deals. Do we think they want a doctor whose skills and knowledge stopped growing five years after medical school?

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Comments

  1. Ira: I too lament “about those people who, when confronted with a challenge, always revert to their “default” state. They reach into their toolbox for what is in there already, the status quo, their collection of clauses. They lack curiosity. They are unwilling to challenge or question their personal “defaults.” ” I have built a large cache of clauses over the years that serve to expedite my drafting, with necessary changes to fit the situation. I don’t feel that locks me into a box – with reflexive responses to issues with clauses that don’t even address the other side’s objections. They are helpful tools. I have dealt with lawyers who have been lawyers in the same job for a long time – their senses have been dulled and they cannot think outside the box and out of their comfort zones. I have worked with others whose long experience have polished their negotiating skills and are open to creative ways to solve problems. So there are two modes of experience – I prefer the latter. This is what gets the deal done.

  2. Ray Iwamoto says:

    I continue to be amazed at how judges (who we transactional attorneys often deride as not having enough experience to rule on our types of cases) so often in their decisions and opinions reveal to us how our beloved clauses were defective in one way or the other, causing us to reevaluate those clauses that we had believed were golden.

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