Review This List Before You Sign on the Dotted Line
When I left consulting years ago, I thought I’d never have to redline or review legal documents that frequently again. Working in an industry HR tech role proved me very wrong on that idea. About a year ago, when I left corporate HR, I really thought that I wouldn’t have to deal with legal documents again. Well, as it turns out, when you venture off independently, your life pretty much revolves around legal paperwork and documents.
In true Millenial fashion, I have now concluded that Adulting = Contract Reviewing (and dealing with accountants, but that’s a story for another day).
In the past year, I’ve picked up a few things in contract reviews and negotiations that I didn’t always think about when I was in my HR role (because, hey, Legal’s got it, right?), and now wish I could pass this onto my past self.
So, here is to hoping that my pain is your gain when it comes to lessons learned in contract reviews:
1. It’s Better to Have the Hard Conversations Now
Contract negotiations suck. Depending on your personality, it can sometimes feel like you’re confronting someone and becoming their adversary, even though the intention is to become their partner. Here’s the thing, though: most of the time, these conversations have to happen, and clarifications have to be provided. Would you rather have the hard conversations now while everyone is on the same page, or would you rather have to awkwardly bring those conversations up later when something isn’t panning out based on your expectations?
My take: sit down and have all the hard conversations. Get those out of the way so 1) you can appreciate how the other side thinks and works and figure out if you can work with them, and 2) you can timebox the awkwardness and focus on the important stuff once it’s done.
2. Just Because It’s Improbable Doesn’t Mean It’s Impossible
Make sure you are protected from all potential scenarios when you review a contract. I have often heard, “Oh, but that’s not likely to happen, so let’s just move on,” only for that very scenario to occur later. And Later is going to suck because you haven’t written it into the contract, as everyone will now dispute from whatever angle that gives themselves the most advantage.
As I’ve always said, people are not against you, they are just in it for themselves. So, when it comes to contracting, ensure you protect yourself from all angles.
3. Write It Down
This may be a bit dramatic, but trust should never be a factor during contract reviews. The salesperson you are working with could leave the company next week; the customer success person may not have passed on your requirements internally to the right team, etc. Whatever the reason may be, it’s best not to get involved in a “who did or didn’t do what” conversation down the road by putting EVERYTHING in writing from the beginning.
The last thing you want to be involved in is an email chain 10 months after the contract is signed, in which someone says there must have been a miscommunication about what was agreed to.
4. If Your Gut Says “Meh” Don’t Do It
This one I learned many times the hard way: if you are the purchasing party, don’t let anyone rush your decision-making process. If they genuinely want to do business with you, they can wait a bit longer for you to have the conversations, conduct due diligence, and make sure this is the right decision for you.
Believe it or not, there are books and courses that teach people how to close deals and get signatures on dotted lines faster. So, when you feel rushed next time during contracting, ask yourself this: who has the most to lose if something was missed during the review cycle?
5. CYA and Read the Fine Print
Never feel awkward about needing to pull an expert or legal counsel on a call or email chain to explain something to you—even if it is buried deep in the part of the contract that no one may ever look at. Not understanding the contract terms and legal language is absolutely normal. This is not a measure of intelligence or ability by any means. Your legal counsel went to law school, and you probably didn’t; it’s simply a matter of expertise.
It should be as simple as: if you don’t understand it, don’t sign it.