Tuesday, February, 2, 2010
Lawyer, Meet Shareholder Agreement; Shareholder Agreement...Lawyer: Introduction To Drafting Corporate Agreements
to draft agreements, as opposed to analyzing those that failed on some
level, comes somewhere during the fifth year of law school, which is to
say, not at all. That's why new associates flock to drafting seminars
and snap up drafting guides and forms. As a drafter in its own right,
Toolbox thought it would lend a hand with a broad overview of the
drafting process. First you need some good avoidance techniques —
YouTube and video games do the trick. Then you need a snack. Finally,
you can sit down and make phone calls before panicking about the
looming deadline for the draft agreement you're supposed to have done
in the morning. But that deadline won't even make you break a sweat if
you've fully digested
Introduction to Drafting Corporate Agreements, by Alyssa A. Grikscheit (Goodwin Procter LLP), who chaired PLI's recent seminar Drafting Corporate Agreements.
Grikscheit's perspective is a little less procrastination-laden and
more process- and client-oriented than Toolbox's approach. And while
she acknowledges that it "is difficult to make useful generalizations
about drafting corporate agreements," she also notes that there are
"general themes" that come up in any drafting process:
- Controlling the Drafting — Who is best placed to prepare the first
draft? Sometimes clients will actively resist having their counsel
initiate drafting on the theory that it will be less expensive to have
their counsel comment on the other side's draft than to prepare the
initial draft of the agreement.
- Drafting in Context — "Do the parties get along? Will they have to deal with each other over time?"
- Structuring First to Minimize Redrafting — In general,
"structure and basic terms of the agreement should be nailed down
before drafting begins."
- Understanding and Addressing the Client's Special Needs —
"Many attorneys believe they understand which issues are of paramount
importance to their client, only to find out later in the negotiation
process that another issue (e.g., use of net operating losses or
protection of intellectual property) is actually very important to the
client and has not been a focus in the early negotiations or drafting."
- Drafting for the Appropriate Time Horizon — Only diamonds are
forever; so check out Grikscheit's useful observations on time horizons
in the download.
- Relying on Forms — Toolbox says, "Nothing is better than a
form, until you have to actually deal with reality." Grikscheit would
- Drafting Agreements That Work Well Together — Remember,
foolish consistency may be the hobgoblin of small minds, but that's why
lawyers get paid the big bucks...we have big minds and can't suffer any
inconsistency, especially in corporate agreements.
Toolbox will implement all of these pointers in the future, but will find time for procrastination between each.
« Disclosure Policies Ought Not Be Kept Secret — Sample Company Disclosure Statement
| If All The Leaves Are Brown, And The Sky Is Gray, Maybe Don't Buy The Property: Environmental Due Diligence Checklist »
Back to top