6 Takeaways From Loio Webinar on Contract Drafting and Negotiation
On November 4, 2021, we at Loio hosted a webinar dedicated to contract drafting and negotiation. At this event, we were honored to learn from Rachelle Hare, a senior lawyer and business advisor, with a passion for creating first-rate legal documents.
At this event, we covered everything from the set of skills necessary for contract drafting to ways of organizing collaborative work on a document. Rachelle shared some exclusive techniques she uses in her workflow with the audience and sated the curiosity of the visitors in the Q&A session.
But if you couldn’t attend the event, don’t worry! We have collected the most valuable insights from the webinar and packed them into this article for you.
Here you go!
1. Skills You Need To Have To Master Your Contract Drafting Technique
Our speaker Rachelle distinguished a set of skills and traits that a good contract drafter should have:
- Creativity. Contract drafting doesn’t boil down to putting together the pre-existing clauses. It also implies considering the consequential amendments and coming up with unique ways of linking different concepts.
- Attention to detail. Because a typo can cost a lot to your client.
- Patience. Sometimes, you need to be ready to spend a lot of time drafting one document.
- Analytical skills. As Rachelle put it, an analytical mindset helps to see the links between different clauses, such as the consequential amendments that apply to several clauses. Such skills significantly boost the speed of contract drafting and enhance its overall quality.
- Risk allocation. You need to understand where the risk falls on the spectrum of a particular situation, so you could know when you should draft an additional clause that reflects that risk.
- Ability to keep it simple. It is quite important to be able to distill the complex concepts into short and simple sentences that make a point.
2. What Do You Have To Know About Your Client Before Starting To Work On a Contract?
Rachelle emphasized that first of all, you need to find out where your client’s risk appetite lies. Before starting to draft a contract, you need to know for sure how much risk the client wants to take because this influences whether you need to push every single bit of risk onto the contractor or make a more balanced contract.
So, Rachelle suggested discussing the client’s risk appetite at the very first meeting. The sample question you might want to ask your client on the shore could be like “Would you like payment to be made seven or 14 days after an invoice?”.
You should also know and understand the project’s objectives, and if something is not clear, ask questions. Rachelle also suggested checking in with the client on their previous projects similar to this one, and finding out what went wrong. For example, if you know that they have administrative difficulties in making a payment within a certain period, there’s no point putting the Net 7 days payment term in the contract.
3. Tips for Drafting a Good Contract Under the Pressure of Deadlines
The first thing Rachelle recommended doing in case of an unrealistic deadline is pushing back on a client. Sometimes, it is worth explaining to them why, for instance, two days is not enough to draft a good contract that will achieve their objectives.
But if you have a hard deadline that has to be met, use a precedent. As Rachelle said, in this case, you would want to find every possible example of a document you need to draft, probably approach your colleagues to ask if they have done something similar, doing some research on the web, etc.
For the situations when you still don’t have time to draft the contract itself, Rachelle suggested considering putting a shorter document in place to get through the deadline. This could be a memorandum of understanding or a term sheet. Such documents cover the key points of an agreement, such as the ways of dealing with payment, indemnities, or liability, but are much less time-consuming to draft compared to contracts.
4. How To Arrange Collaborative Work On a Document?
Speaking about effective collaboration, Rachelle emphasized the importance of assigning people the work to their level.
Starting from the bottom up, an intern can do the proofreading, while a graduate or a solicitor would do a fair bit of the contract drafting. At the same time, a senior associate would guide the solicitor on the document’s structure. And only after the scope of work on these levels is completed, it’s time to send the contract to the partner for their comments.
So, main Rachelle’s tip for teamwork is to give the work to the person best able to do it, but also the person who’s the cheapest in a law firm — so that senior lawyers could focus on more high-level work instead of proofreading or editing the document.
5. The Role of Technology in Contract Drafting
As Rachelle sees it, technology is an enhancer, but not a magic wand that does all the work for you with a wave of your hand. So, to get the most out of technology, you need to first learn how to draft documents manually.
Rachelle added that she finds tools for contract review extremely helpful. The ability to press the button and have a program go through the contract for you can be a huge reliever sometimes. Here is what she said about a contract review software Loio:
“When I’m in a rush or when I’m busy, I can just put my contract right through this tool, and double-check the document without having to take too much mental space to pick up some of those smaller issues as I go along.“Rachelle Hare, senior lawyer and business advisor
Book a 15-min demo with Loio or try out Loio for free to upgrade your contract drafting experience!
6. Ways to Upgrade Your Contract Drafting Skills
Rachelle gave an insightful answer to this question from the audience.
The first thing she suggested was to draft contracts a lot. Practice makes perfect, and contract drafting is not an exception to this axiom. Even though attending workshops and lectures is also great, a theoretical base won’t help you improve your practical skills –– so, it is essential to practice actual drafting.
Rachelle also made an insightful note on the importance of good writing skills and proficiency in English for contract drafting. To enhance the former, you might consider enrolling in some creative writing courses (a contract is a form of art, isn’t it?). To improve your written English, especially if it is not your first language, Rachelle recommended doing more reading.
Finally, Rachelle advised to pull down example documents. You can find them via Google search or on special databases. So, pick a particular contract, and find four different versions of the same contract. Print them out, and make notes right on your copies, trying to think about the risk allocation of certain clauses, for example. Learning to spot similarities in different documents helps you get your head around the way how contracts really work.
That’s it! If you want to get the most out of Rachelle’s expertise, check out the webinar recording below.