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What have contracts got to do with empathy?
Craig Conte |
May 11, 2023 |

 12,049 total views

Negotiate noun To have formal discussions with someone in order to reach an agreement with them. To obtain or bring about by discussion. To find a way over or through an obstacle or difficult route. To manage to travel along a difficult route. To deal with something difficult.

Last week I chatted to a GC in the Midwest who described this moment as he moved from employment law to the world of commercial contracts:

When I moved into my new role in aviation I opened up my first contract and was aghast. I experienced a flood of self-doubt.’ The documents were huge, complex, dense with technical language. ‘I asked the MD: who wrote these? He said we inherited them. I said they are awful. Why don’t we rewrite them in language a high-schooler could interpret? He was blown away by the results.

This all sounds so obvious, but it took hard graft to convince traditional business stakeholders that no protections were being lost in the process. Everyone has to go with you on that journey.

On the other side of the Atlantic, Sonia Williamson of Deloitte Legal is an ex- GC on a very similar mission.

You have to consider what happens in people’s minds when you draft and negotiate contracts. There is a human reaction when you receive a legal document. How are you going to react when it lands in your inbox? Do you feel reassured? Worried?

At the end of the day, commercial contracts are a negotiation between commercial people, between sellers and buyers. The groundwork will have been painstakingly laid through relationship building, discussion and eventually agreement. Then the lawyer is asked to draft the contract.

Sonia’s experience has shown her that:

there are two paths at this point. Either the buyer feels they recognise the deal they have been working on, they understand the contract and can agree without detailed negotiation. Alternatively, doubt creeps in. What is this reference to legal statute? Why the over legalistic language – what does it mean? Why does data privacy feature so heavily when we agreed not to share any personal data? What am I opening myself up to here? That trust is eroding before the deal is even signed.

The content obviously matters, so if it is absolutely necessary to reference legal statute then why not include an explanation or train staff to understand what it means to them in reality. However, in order to promote healthy commercial relationships and efficient negotiations the contract also needs to resonate. Look and feel, clarity, language that reflects the nature of the business all help both parties to recognise the deal they have struck and come to an agreement smoothly.

At Deloitte Legal Managed Services our lawyers understand the power of this because they have worked as GCs or in-house lawyers. Sonia and her team spend time talking to our clients’ business stakeholders to understand their business and what works for them. Procurement teams, marketing teams, sales people all need to be able to engage with the contracts, ideally without the help of a lawyer to interpret them. At the start of our most recent engagement with a global manufacturing organisation the Deloitte Legal Managed Services team watched the CEO’s video about his vision. They are thinking like this all the time:

if a business strives to be environmentally friendly, modern, cutting edge, how can we draft contracts and create standards that reflect these values? How do we ensure that all the effort of building trust into commercial relationships isn’t counteracted when the legal document lands in a customer’s inbox?

The answer lies not just in cutting down on ‘legalese’ but in empathising with the real people who strike these deals. We make it easy for them to find the relevant information, signpost it, think of it as a storyboard. Lawyers are taught that punctuation can cause problems with interpretation but long, convoluted sentences can prove impenetrable or at least hard work to read and understand.

Striking the right balance takes decades of legal experience and a real passion for business. Our lawyers are motivated by both of these instincts and strive to make our clients’ negotiations move as quickly as possible. If commercial teams can function without the help of a lawyer in all cases except the truly complex or novel, then in-house lawyers can focus their efforts where they really matter and guide the business towards success.

 

Author: Craig Conte

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