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And the Lawyer Just Smiled

We struggled with formulas. How much would this business be worth in one circumstance or another? We tried to imagine all the ramifications. There was a lot of Excel work.

We were working on a contract with marketing vendors. It was in the early days, we couldn’t pay the normal way, but we wanted their work product, so it was percentages and just in case this and maybe that. Hard to negotiate.

And our lawyer, a man in his fifties, just smiled.

I know now what he was thinking. He said it then too, but we thought he was joking. He was serious.

We’d ask him to help with the detailed formulas and he’d just nod and say, "It’s not going to matter."

Flash forward to about a year later. The formulas didn’t matter. It was all going to come out in mediation. And he had predicted that all along.

The mediation took a day. We sat in the lawyer’s conference room on the seventh floor, and they were on the ninth floor. The retired judge, the mediator, went back and forth, up and down the elevator, talking to us, then them, then us.

Throughout the day, the lawyer calmed us down and narrated the plot, predicting it a lot of the time. "They are going to start out with absurd demands, intended to scare the living daylights out of you," he said. And they did start with absurd demands, and those  demands did in fact scare the daylights out of us.

"We just have to last until the end of the day," he said. "Nothing important will happen until the end. Just wait." That was also true.

It would have driven us crazy, except that it was exactly what the lawyer had predicted. And he also asked us, throughout, to give him a free hand for about 20 minutes after we were settled and agreed. He had to remind us often.

And then, when it was all done and we’d agreed to pay six figures to buy the vendors out of the contract, he held us to our word. We were so relieved, we didn’t want to mess with it, but he insisted. And he came back, 20 minutes later, with having saved us another $20,000.

And so it was over. We had twisted and turned and suffered and analyzed and worked through all those detailed formulas, for months, even though the lawyer, almost indifferently, said several times that it wouldn’t matter. He was right. He knew throughout that this would end up in mediation. And it did.

Since then, I take contracts with a grain of salt. The details don’t matter that much; what they are, in the best case, is an effort to lay out what we’ve agreed upon, so we can refer back to it. A contract isn’t easy to enforce. Mediation isn’t unusual. A simple letter of agreement is usually just as good.

I know, there are exceptions. But most of the time, the rule is, we put too much stock in contracts. And too much effort.


  • Tim Berry says:

    You make a very good point; these things are never simple. Where you and I particularly agree is on the value of spelling things out, what happens in the future, who does what, and so on.

    The case in question, since you asked, is a bad example. It didn't favor us or the other side either, it was an ornate elaborate set of spreadsheet formulas that had tried to anticipate all the possible alternatives, but didn't, and ended up as far more confusion than help. Our lawyer tried to tell us that, but we fell victim to the "live by the spreadsheet, die by the spreadsheet" syndrome.

    I remain skeptical, though, about the value of the formal contract, as opposed to the less formal letter of agreement, because I think people tend to overestimate the enforceability of a contract. You put a lot more effort into it, and don't get much more out of it. That's a generalization, I know, so it applies only as far as any generalization does.

  • C Small says:

    Nice post, though I must say I disagree. I wrote my response to your theory over at my site (with a nice link for you). Take a look if you have some time. I'm curious as to what you think.

    This is the link to the story:

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