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Welcome to Lawyerland

What’s the view like from Lawyerland? Paul Teta, vice president and general counsel of international trading and marketing company Kolmar Americas, probes the unique lawyer mindset.


the lawyer’s mindset

PAUL TETA

Vice President and General Counsel,
Kolmar Americas


Recently, one of my colleagues who works in Kolmar’s treasury department asked me whether I liked being a lawyer. I found it curious that the question did not contemplate working in a legal capacity or doing legal work, but instead, being ‘a lawyer’ as if it is a thing.

Based on that question I began to think about the differences between the business side of what we do and the legal side of what we do. In the end, I concluded that the overlap is about how we each see and manage risk. Therefore, that is the foundation on which I have written this article – how risk is navigated through the eyes of the law department; that lens being what I call ‘Lawyerland’.

So, in good legal fashion, I must first define what I mean by ‘Lawyerland’ (note the quotation marks: as we know, all legal definitions must be in quotation marks). Lawyerland is a state of mind, as well as an embodiment of work that must be done. Lawyerland includes the way things are considered, discerned, dissected, analysed, written and spoken about. It is a lens through which possibilities and problems are viewed. It is different to ‘Businessland’, but there are many overlaps. At Kolmar, as with all businesses, Lawyerland involves two key work activities: business enablement and dispute management. One involves assisting in creating low-risk business transactions; the other protecting the value negotiated into those transactions once implemented.

Despite involving a host of different undertakings, the overriding mantra is the same for business enablement and dispute management, and that mantra is risk management. I don’t mean risk management as in profit and loss, hedging or the like, but in the sense of advising how to lower risk of non-performance at the time of deal creation, and following that theme all the way through to final payment, and sometimes beyond that.

There are institutional means by which to enable business and reduce a company’s risk. These range from devising confidentiality agreements, writing and reviewing parent guarantees, and working with bank facilities, to developing and managing sales and purchase contracts. They also include creating and employing policies and practices that ensure detailed sales contracts are sent, as well as developing and implementing policy on matters such as limitation of liabilities, indemnities, choice of law and venue – to name just a few. Lastly, instigating and updating company protocols such as human resources, training, compliance manuals and management policies, as well as monitoring and advising on governmental regulations, also qualify as institutional legal risk management.

Assisting in business enablement is creative and constructive. It involves critical thinking. ‘Critical thinking’ consists of the thoughtful use of deductive reasoning and logical analysis (my own definition). Breaking this down, we find that ‘deductive reasoning’, according to that terrific source of all knowledge, Wikipedia, is defined as ‘the process of reasoning from one or more general statements (premises) to reach a logically certain conclusion. Deductive reasoning links premises with conclusions. If all premises are true, the terms are clear and the rules of deductive logic are followed, then the conclusion reached is necessarily true.’

‘Logical analysis’ relates to a process for arriving at a conclusion. This is from ClearPointLaw.com: ‘Reason and Logic is a classification for terms that describe the thought process. This class of terms is most often used to describe how one arrives at a conclusion, whether by sound or unsound means. Take the term, “a posteriori”. A posteriori comes from Latin and literally means “from what comes after”. It describes a logical process that takes a known outcome and then infers the cause. For example, you see a new car abandoned along the side of a desert highway. You might infer, a posteriori, that the car ran out of fuel.’ I would add, however, that the obvious inference may not be correct – the car’s driver may instead be napping in the back seat! Thinking through the alternative inferences is a key part of evaluating a risk situation, and this form of thinking drives decisions not only in Lawyerland, but in Businessland as well.

Designing sound, low-risk business contracts and advising on legal matters requires considerable critical thinking. In forming contracts, critical thinking is necessary from the beginning stages of devising the rough deal concept through to crafting the thorough, clearly-drafted document. The trick is taking the complex concepts and reducing them to considered prose, acceptable to the company’s counterparty.

Language and writing skills are essential and necessary crafts for those living in Lawyerland. When we write contracts we try to favour our respective companies in all ways possible. When we review or revise counterparty contracts and reject clauses, conditions and terms that are not favourable to our companies, it is not to impede Businessland, but instead to facilitate business with as low a risk profile as possible. Certain words and clauses are red flags for risk. For example, we only like to use ‘shall’ when it imposes an obligation on a counterparty. When an obligation flows in the other direction, it is best to use the word ‘may’. ‘Shall’ is an absolute requirement, whereas ‘may’ means the conduct is optional. Also, I never want to commit to ‘best efforts’ as this has been found under New York law to require that ‘a party must do all that can possibly be done to seek and obtain an end, even if the impact would be materially adverse to the seeking party and even if there is a material monetary cost to the action’. Instead, I prefer the standard of ‘reasonable efforts’ which is generally perceived as ‘limiting both the effort required to be exerted in the process as well as what a party may ultimately be obligated to do in order to obtain the desired end’. The point is that we must always seek to use the appropriate words that serve our company’s best interests.

‘When we write contracts we try to favour our respective companies in all ways possible.’

It is when things go wrong that the wheels of dispute management spin. Such spinning tends to consist of encouraging a counterparty to perform under its contract, or recovering lost value. Whether it is retaining performance or recovering lost value, Lawyerland includes thinking through and advising on dispute resolution, mitigation and enforcement strategies. Here, advice must be delivered at the speed of now, and the advice must be sound. Dispute management is truly where time is money. Almost always, swift, thoughtful, thorough and direct action leads to positive outcomes.

The ultimate Lawyerland experience is litigation. This is a costly and unpredictable place in which to dwell. This is so because there are just so many lawyers to deal with. Our company’s lawyers, the other side’s lawyers and of course the judges: each dwell in their own version of Lawyerland and their worlds are far less pragmatic than ours – and far less understanding of Businessland. Nevertheless, from time to time we have little choice but to enter into litigation. Litigation is not for the faint of heart. As we know all too well, even when you have all the facts on your side, a judgment in your favour is not always within your grasp. Despite this, when we do enter this world, we must enter with the mindset of ‘all in’.

Regardless of whether the work is about deal creation or dispute management, Lawyerland is all about managing risk. Living in Lawyerland can colour situations, and a business proposal can be heard both as risk and as opportunity. Recently, in a meeting with several Businessland managers, a customer explained a situation that could have an adverse effect on our business. Following the explanation of the situation, the counterparty made a proposal. Later, in discussing the proposal, I learned that through my Lawyerland lens, I had comprehended something completely different than what my Businessland colleagues understood. I filtered the proposal with a legal risk lens. They filtered it with a business enablement lens. After comparing what we each heard, we came to a position regarding what was in the company’s best interests from both a business and legal standpoint. And that is how the interface between the two ‘lands’ should work.

Finally, I believe that being a lawyer is terrific. In the business world, Lawyerland intersects with Businessland on a daily basis. Both lands need one another. Helping create business is a driving force for business lawyers. It is highly satisfying to know that a well-worked deal has made money for the company. Helping navigate through disputes may be less fun, but when a deal is saved or when a dispute is resolved that reward is just as satisfying. So to answer the question posed by my colleague: yes, I like being a lawyer!

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