Have you found yourself involved in a deal that is stagnating? Have multiple drafts and redrafts of the deal documents coupled with lengthy and numerous e-mails and conference calls failed to move the parties closer to final documents? Although the idea of having an in-person negotiation session or meeting with lawyers is often dismissed as too costly (especially when participants are in different locations), in many cases the results far outweigh such concerns – here are a few reasons you should consider coming to the table if your deal is not getting done:
Face-to-face interactions rule the day. Simply put, it is easier to take unreasonable positions or to simply reject the other party’s position when your thoughts are typed into an e-mail or voiced during a conference call. When you sit with the other side and discuss each party’s real concerns on the open issues, there is a greater likelihood of resolution. Proposals and counterproposals are considered and responded to in real time rather than over several days or even weeks through e-mails and phone calls. This real-time interaction lends itself to frank discussion and compromise on the real issues.
Compromises are struck. When the parties have committed to spending time and legal fees on an in-person meeting, there is an implicit commitment to resolve the open issues during that meeting and to receive a return on the parties’ investment in the meeting. Everyone puts on their thinking caps, is focused on the task at hand and offers new compromises and resolutions to old, and sometimes new, issues.
You will likely save time and money in the long term. Many clients are understandably reluctant to incur travel expenses and legal fees for this type of meeting. We have found, however, that in many situations, the travel expenses and half or whole day of legal fees incurred will be less than the legal fees spent on endless redrafts, e-mails and phone calls that only move the deal toward closing in small incremental steps. It is also important for both parties’ legal counsel to attend the meeting. The attorneys will be responsible for documenting the resolutions reached during the meeting and it will benefit both parties if the attorneys can raise potential issues while the resolutions are being discussed. The attorneys’ attendance will also reduce any misunderstandings that could make their way into the documents that are produced following the meeting, which could delay closing the deal.
An in-person meeting or negotiation will be most productive and efficient in terms of time and cost if the parties undertake two important preparations. First, before the meeting, it is a good idea for an issues list to be formulated and circulated to the parties. This allows each party to articulate what it believes the open issues are and to consider its position and possible compromises on each of the open issues in advance of the meeting. Second, it is important that each party have a decision maker with authority at the meeting or, at least, available by phone. This ensures that issues can be resolved during the meeting and that the negotiations do not stall.
While electronic communication is virtually instantaneous, sometimes an old-fashioned in-person meeting is the most productive. As every client knows, "time is money."
Matthew J. Swett and Hannah Dowd McPhelin