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Monday, August 02, 2004

Deal lawyers and trial lawyers, revisited

I'm a serial bandwidth abuser of a few other blogs that permit comments, but I'm trying to cut back on that and write more here.

It occurred to me recently, however, that some of the stuff I write in comments on other blogs, I ought to post here as well, if for no other reason that someone else might cancel his or her blog and — alas! — my work product (so to speak, such as it is) would be lost forever as a result. 

What follows is something I originally posted about here only briefly last March, with links to a couple of comments I'd left on two posts from Scheherazade's blog.  Sherry's original posts and many of the other comments were also very good — I continue to recommend them to anyone genuinely interested in the subjects of what trial lawyers and deal lawyers do, and do differently.  But for archival purposes, here again are my own long-winded takes on trial lawyers and deal lawyers:


I'm not one, but nevertheless have worked with and around transactional attorneys — sometimes also known as "deal lawyers" — enough to have to enormous respect for what they do.

Sherry's post captures an important aspect of transactional practice and effectively illustrates that although not carried out in a courtroom, it is indeed an "adversary practice" that calls for zeal and loyalty on behalf of one's client to ensure that he isn't bested by the other side outright in the negotiation and documentation of a transaction, nor caught unprepared by an adverse and unexpected contingency.

Additionally, however, much transactional work is carried out in coordination with, or anticipation of the involvement of, folks whose interests to your client may be partly or largely aligned, and only potentially or hypothetically adverse. The transactional lawyer may, for example, be helping an employer draw up employment or benefit agreements for its employees; or drafting for an operator of an oilwell drilling project the agreement with its investors that creates the operator's privileges, responsibilities, and duties with respect to those investors; or drafting documents to be filed with the SEC or other regulatory agencies to ensure compliance with various laws and regulations. Negotiating with your mostly-allies (but potential adversaries) is a demanding art that calls for not only aggressiveness and imagination, but subtlety, good judgment, and compromise.

Imagination and creativity aren't only used to identify and ward off bad consequences, however. Good deal lawyers can have a remarkable ability to find synergies and opportunities that benefit not only their own clients, but everyone else involved. They're charged with knowing, choosing among, and refining the numberless structures within which deals are possible, and then negotiating and communicating and drafting precisely and clearly to confirm the particulars of their transactions as they evolve. But many times — especially as they gain, with experience, a deeper understanding of their clients' and the other parties' means and needs and goals — deal lawyers' imagination and ingenuity can keep a proposed deal from falling apart, or find a way to put it back together again, in ways that might well not have occurred to the principals had they not been so capably represented. Thus, it's far more common to see transactional lawyers than trial lawyers migrate to serve as "in-house counsel" for their clients, or to go the next further step to becoming business principals on their own behalves.

It's a serious mistake to assume that being a transactional lawyer necessarily means being a pencil-pushing, form-filling-out drone, or even just a well-trained scribe. Transactional work can be every bit as thrilling as arguing to a jury, and sometimes moreso. And as for the stakes involved: The verdicts and settlements that seem enormously significant to me in my regular trial practice are most often dwarfed — frequently by orders of magnitude — by the sums of money at issue in, and the probable economic impacts from, that which the deal lawyers regularly help create and shape.

During the go-go mergers & acquisitions days of the early 1980s, I frequently was part of a team of trial lawyers who worked as auxillaries to the deal lawyers who were running the show. They were the ones who were elbow to elbow with the clients and investment bankers; we were often camped off to the side waiting for something that might or might not ever happen. We "litigators" (ugh, I hate that term) were rarely more than a sideshow to the main events of those extremely exciting engagements: we sometimes could bring a deal to a halt, but we could almost never make one go. And while our part was itself exciting and challenging, those days certainly cured me of the excessive hubris that some trial lawyers hold.

That hubris is a misconception which, unfortunately, is sometimes promoted and aggravated by the fact that by the nature of our practices, we trial lawyers all too often are dealing with deals gone south, scenarios unplanned for, terms ambiguously drafted, or disputes unanticipated. But the happy fact for our common clients is that good transactional lawyering can make much of what I do for a living unnecessary. And while there are rivalries and occasional ignorant prejudices displayed by legal practitioners of both sorts, cooperation and respect among them can be as useful and beneficial to a client as his internist's and surgeon's cooperation and respect in maintaining his health.


Some litigation is aptly characterized as "spilt milk" — just a cost of doing business, a distraction, a nuisance.

Some clients, though, are drowning in the spill.

I'll never forget an anguished two-hour phone call I had at dawn on Christmas morning one year from the CEO of a public company I was in the midst of representing in a six-week long "bet the company" lawsuit. Or a hospital bedside meeting I conducted with a personal injury client (and his family) whose career had just been catastrophically ended and whose economic future was being thrust into my hands. Or a lawsuit I tried in bankruptcy court that determined whether a company would emerge from bankruptcy reorganization largely intact, or instead be dismembered and partially liquidated — with literally thousands of working-class jobs at stake.

And sometimes my skillset as a trial lawyer becomes very useful to clients in planning for and structuring their ongoing businesses. For several years I represented a large homebuilder in its lawsuits with customers; over the course of that representation, I not only helped revise their standard deal documents, but gave "preventive medicine" seminars to their customer service staff to help train them how to resolve the vast majority of their complaints and disputes without my direct involvement. In every house they sold, some discrete portion of their real economic cost was attributable to litigation and litigation risk; by minimizing those costs, I felt like I was helping them sell more houses and helping more families qualify to own their own homes.

Negotiating and settling lawsuits can also call upon the skillsets more regularly honed by deal lawyers. Sometimes there are "win-win" resolutions to lawsuits, but if a trial lawyer's imagination is limited to "what assets can we seize to collect on our judgment?" he's not likely to imagine, much less realize upon, those results.

With due respect to Balasubramani, I think he's badly wrong. Half-assed is half-assed on either side of the professional fence. A busted deal closing can be just as definitive as an adverse jury verdict. The overwhelming majority of lawsuits end up being settled, not tried to a definitive conclusion; oftentimes what constitutes a "good settlement" is far more subjective and indistinct than what constitutes a "good deal"; and it's certainly as easy for sloppy trial law practice to be buried over and hidden in them as it is for sloppy transactional practice to be buried over and hidden in the deal world. And as I mentioned in my comment to Sherry's earlier post about transactional lawyers, the financial and economic stakes of their work often — but not always! — dwarfs the stakes we trial lawyers deal with.

Posted by Beldar at 12:49 PM in Law (2006 & earlier), Trial Lawyer War Stories | Permalink


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(1) Peter made the following comment | Aug 7, 2004 1:07:58 PM | Permalink

Late to the party but I wanted to make a point. My experience is with criminal law, not as a lawyer but as a retired LEO. It's my experience that the very best criminal attorneys, at both tables, get reputations as 'deal lawyers' simply because they are so good at trial. Opposing counsel want to make the deal to avoid getting their backsides handed to them.
I will say that the lawyer I would have had represent me if I'd ever been involved in, say, a questionable shooting is not the lawyer that represented us in our periodic contract negotiations. Two different breeds of cat, both important.

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