Most business professionals understand that it would be better to have an attorney draft or review a business contract but many choose not to.  Why?  What are the justifications business people use for do-it-yourself and downloaded contracts, and what are the reasons to find an attorney you can work with.

Money.

Did you really think of any other answer?  The real answer may be a combination of money, timing and risk.  Lets discuss the money up front, because that is the first thing that probably occurred to you.  No one wants to pay money for something they don’t value.  We as lawyers don’t want to pay lawyers when we don’t absolutely have to.  When a person exchanges money for an attorney’s services it should provide substantial value – short and long term.  We all part with money more easily when we perceive a powerful value.

The real cost of having the Watkins Firm review or create a basic business contract may be as small as a few hundred dollars.  The cost to have an attorney draft or review a business contract is directly related to the complexity of the agreement between the two parties, the risks associated with the contract and the money on the table now or down the road if things don’t go well.

Think of a business contract as a road map to success.  The road map guides each party through the transaction or relationship, through the exchange of goods and services for money.  It clearly defines every aspect of the process, and anticipates possible challenges that can conceivably arise.  A well crafted agreement then works the parties through those challenges by prescribing solutions in advance, making it easier (and much less expensive) to resolve disagreements, disputes or a breach of contract.  The contract covers details from start to finish, and provides the basis for what constitutes the “completion” of the subject of the contract.

When our attorneys draft a contract we rarely start from scratch.  You aren’t paying for the creation of every word.  There are boiler plate forms that are something like what you would download from a popular “legal forms” website.  The cost for a boilerplate is very low, and if all you need is a boilerplate we would tell you, and send you on your way.  The missing piece for most business professionals and the real answer to the question posed in the title of this blog is what comes next:

Every contract must be modified based on dozens (or hundreds) of finer points to fit the exact circumstances it will govern.

We live in one of the most progressive and heavily regulated States in the Union.  California business laws are much different than federal laws or the laws of most states.  Download forms almost never provide the right language for California’s unique legal requirements. They certainly don’t work with you personally to thoroughly understand the transaction or relationship in front of you, and how the download form should be customized and tailored to serve your purposes.

When you have a Watkins Firm business contract attorney draft or review a business contract we take you through a series of questions.  These questions are equal in complexity to the transaction or relationship at hand.  These are legal issues, and require the expertise of a lawyer to ensure an enforceable agreement is what you ultimately sign.  We gain your expectations, goals and understandings related to the contract at hand, and ensure that these are carefully crafted into the agreement.  We share the benefit of our decades of experience and real life business experience to help you to evaluate and avoid risk and potential pitfalls.

Finally – a thought that enters many less experienced business professionals thoughts: “what can go wrong?”  After several decades of serving the business and professional community here in San Diego we can tell you there are several issues you need to truly think through:

1. Hope springs eternal – No one expects a contract to go poorly at the outset.  Everyone has high hopes and best intentions.  The value you place on an attorney’s services is directly related to your own expensive and painful experience in business disputes.  For those without a lot of experience, the real question is: are you the type of person who is able to apply the wisdom of what others have learned, and progress faster – or do you need to experience things for yourself?
2. Hope is not a strategy – Sound business is not based upon hope.  Business is based upon sound contracts.  Employment contracts, vendor agreements, service contracts, sales agreements, every form of business activity is governed by a contract.  The likelihood of success for any of these is directly proportionate to the quality of the contract the governs them.  Hope may work for awhile.  When hope fails, the cost is heavy.
3. The real costs of a failed business contract are “damages” and “litigation.”  Damages is the legal term for the financial value of the failure of the contract in measurable provable terms.  You cannot force compliance with a contract in California in most cases, unless real estate is involved.  The dispute will be resolved based upon damages.  Litigation is the most expensive consequence of a failed business relationship or transaction – a failed contract.  When contracts are poorly crafted a mediator, arbitrator or judge must determine the intent of the parties, and in effect fill in the blanks missing from the actual contract in place (if any).  The larger the gaps in the contract, the more work that must be litigated before a mediator, arbitrator or judge and the greater the expense down the road.
4. “Transaction Insurance” – perhaps you should consider the concept of “insurance” when you have an attorney draft or review a business contract.  Pay a relatively small amount up front to avoid paying a substantial amount if and when something goes wrong.

Real Money.  The original answer to our first question above was “Money.”  Experienced business professionals will tell you the right answer is “Real Money.”  Talk to experienced and seasoned professionals you trust.  Ask them about the challenges they’ve faced in business, and how much “real money” they’ve lost due to transactions and relationships that did not work out according to “Hope.”

If the amount of the transaction is measured in tens of dollars, your risk is extremely limited and not worth hiring an attorney.  If you are doing tens of thousands of ten dollar transactions the equation changes.  If you are entering a $10,000 contract, or $100,000 relationship (keep adding “O”s until you reach the level of your own business relationships and contracts) the small amount you invest with an attorney is saved dozens and in many cases hundreds of times over or more in the damages and litigation costs you avoid.

The business contract attorneys at the Watkins Firm understand “money.”  We understand “real money.”  We understand small and mid-sized businesses and international corporations.  We are small business people ourselves when you think about it.  We understand cash flow, and how you’re trying to keep expenses down and increase income.   We also understand the genuine risk you face as a business person.

The Watkins Firm has not served the San Diego business community for decades by taking business people for the small amount of “money” one contract generates.

Our reputation and decades of successful practice is built upon our ability to provide valuable advice, and cost-effective legal services when necessary.  Our clients value their long-term relationship with the Watkins Firm as trusted business counselors and advisers.  Our goal is to help your business to grow and prosper and to fulfill the dreams you have for it – to help you to earn REAL MONEY.

If you are looking for the right legal business partner – a valued, trustworthy and experienced counselor and attorneys who are skilled, efficient and cost-effective – we invite you to review the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.