Negotiations are an area where small businesses often call for help from an attorney, but the decision to let an attorney handle negotiations can be tricky. So how do you know whether to let your attorney negotiate on your behalf or just be a sounding board to provide you with guidance? Start by asking that question to your attorney. Ask their opinion. Should you use them to negotiate a contract to help settle a dispute? Will they be an advantage or a disadvantage to you? If nothing else, they can be a sounding board, initially, to help you work through the problem yourself and assist with the process. But possibly, they will serve as your primary communicator in trying to resolve an issue with the person with whom you are negotiating.
There are many situations when it makes total sense to have an attorney handle your negotiations. The most common circumstances include issues about which the business owner is at risk of being too emotional and negotiations when the business owner might be outgunned by the knowledge of the negotiator on the other side of the table. There are lots of great stories about sales of businesses where one company sold its assets to another but the purchasing company forgot to buy all the intellectual property rights, only to realize they were missing the assets with the greatest value.
There are, however, many situations when using a lawyer to negotiate on your behalf provides little or no benefit. There are even situations when using a lawyer can be a negative. When considering possible negatives, start by asking some simple questions. What’s the issue? Who are you dealing with on the other side? And how will they respond if you get an attorney involved? Some people will get intimidated by the prospect of negotiating with an attorney; maybe they’ll think it’s offensive to bring an attorney into the picture. They may feel the obligation to hire an attorney to even things up.
Sometimes having lawyers on both sides can be a real benefit so that they can deal with the higher order legal issues that need to be addressed. But other times things may have been better handled on the side, without attorneys involved to drive up the cost of negotiations. Have a conversation with your counsel before getting them involved. Get their opinion if they’re going to be an asset or a possible detriment to what you’re trying to do.
Published: July 22, 2013
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