In Praise of Transactional Attorneys

I have always respected the attorneys that draft and negotiate commercial agreements. In the last while, I've been doing a bunch of that myself and so have increased my understanding of the joy and difficulties they face.


The basics of the job include working with one or more groups of other attorneys from other companies to negotiate and draft an agreement to reflect the terms of a commercial deal. It can be as simple as I will give you X number of widgets for Y amount of dollars or as complex as hundreds of pages attempting to deal with all sorts of contingencies. These deals are then used by companies to figure out what they should do, for example pay $Y when X widgets are delivered, and, extremely rarely, they are used by courts to figure out whether a company has wronged another by violating the contract.

There is a lot of joy in making a deal work and thinking of creative solutions to disagreements but the job is also VERY tough. To put it in computer terms, imagine the contract as a computer program. In each the object is to be able to interpret the words and have that interpretation drive a result. Now imagine that there is no compiler for your program and that you can't run any tests. All debugging must be done only theoretically and in your head. Imagine that you are coding with another person that is likely to be trying to develop a program that does something significantly different from what you want it to do. You and the other programmer may have different time constraints and, even though you are trying to do different things, you have to be on good terms with the other person because she could just as easily decide to stop working on your project. You and the other person take turns editing the code but without a common coding environment or standard tools to figure out whether the other person (or you) goofed it up. Then imagine that the code you are writing has a high probability of only ever being "run" through two different interpreters with significantly conflicting points of view about desirable outcomes and you likely won't get to see the result of any of these "runs." Or you may be asked to interpret the code in light of complete changes in context. Include a small chance that your code will be "run" by a relatively unbiased interpreter but the outcome of that one interpretation will be at extremely high stakes, often millions of dollars. Finally, know that you will likely get little credit for writing good code but will be crucified if the one time your code is run it doesn't work flawlessly. Now you are beginning to understand how hard the job of a good transactional attorney is.

Great transactional attorneys also pack a whallop of business sense and are very hard to find. Of course I believe our department at Twitter has some folks that are extremely good at this, and the team at Google is also wonderful. If you are not lucky enough to work at either of these companies I'd also recommend the great folks at Fenwick, Heather Meeker of Greenberg Traurig and Suzanne Bell of Wilson Sonsini. Wherever you work, give thanks for your transactional attorneys, I'm sure they deserve it.

8 comments:

Eric Goldman said...

Yay! It's true that licensing/commercial contracts lawyers don't get a lot of love, so kudos for calling them out. Eric.

J Bigga said...

I would really like to see more actual API's written with a "licence" or "contracual attachment". I believe that any site that hosts streaming media would benifigt greatly from these types of portable licence APIs. When companies fail to compartmentalize the product the also fail to realize the strenth of the products dirivative uses. Why would a YouTube not utilize the advantages of their content being programatically licenced by anyone using their API?

Matt L. said...

Solid work. However, I think you left out a key player -- the Project Manager (the client, external or or biz dev/sales person in-house). As the coder, you may warn him of the disastrous output of a subroutine the other side has written (say a very one-sided indemnity). However, because all code is thought to be rarely executed, and the PM is judged on his number of quarterly launches, the PM would rather just launch than push for a rewrite of that code.

SJ said...

Since much of contracts are currently boilerplate to begin with, and use a common dictionary of terms and jargon within a field, I think you've identified a powerful opportunity for people to create crude compilers for transactional documents.

The output of an early compiler can include the full text of sections that can be identified as relevant to certain subroutines, but couldn't be further compiled or analyzed. The practice of developing such compilers and trying to improve them would likely redefine what sorts of boilerplate are used, the chunk-size of pieces of boilerplate, and how one selects different chunks that are compatible with one another.

Tools to help construct contracts with an internally-consistent set of boilerplate pieces, and pre-compilers that help rearrange a contract so that existing compilers can extract as much meaning as posible from them, would both become useful in the resulting ecosystem.

Rick Klau said...

Word.

Related: Tell Bakari I say hi. Still bummed we couldn't close Amazon before he left, but I raised a glass in his honor when it did (four days later!).

:)

J Bigga said...

It is without any doubt that innovation is being hampered by efforts to curtail illegal activity on the Internet.  Most of the great web innovations occured before the Internet was regarded as a serious threat to terrestrial busines' very methods of doing busness.  

Using API objects that have Attached Licences to distribute content to the public, would allow content owners to set their own prices for the use of their content.

While the IP protocol blindly passes information through networks.  A royalty baised IP structure would monitize the use of data and allow contractual obligations between consumers and creators to be satisfied as a part of the delivery process.

Without a doubt the potential to abuse said system would still exist because some would choose to ignore the licences attached to content.  

If all perpatrators of illegal use of content were required to comply to the attached audit terms of said content, litigators could easily find profitable settlements with perpatrators that would encourage innovation instead of imprisioning innovators. 

Jeff said...

Excellent analogy! Wonderful job. As Rick said: Word.

~Jeff

ahyman said...

here here! :) And then add a layer of cultural and language complexity when doin International deals....