A Trend of Not Involving Attorneys in Routine Contract Negotiations

I had lunch recently with two law school classmates, each of whom works in-house at different large companies, each overseeing a team that negotiates routine contracts.  Both of them agreed that there is a recent trend among large companies with in-house legal departments to deemphasize the resources devoted to attorney review of routine contracts, though at the same time there is a greater emphasis on hiring regulatory attorneys.  With fewer attorneys available to review contracts, there is greater reliance on non-attorney negotiators.  The calculation is that the risk involved in these contracts is more theoretical than practical, so it is not worth the cost and process delays that result from involving attorneys.

contract-reviewOf course, the easy reaction from me would be to decry this lack of respect for the value that attorneys add in protecting their clients from risk.  However, I think that the way that law is practiced by many contributes to the sense among clients that attorney involvement in routine negotiations is unhelpful.  In particular, there are lawyers who are good at identifying risks but (being in CYA-mode) are not willing to say that certain risks are extremely remote.  Others can slow down the process by being non-responsive.  In a recent contract I was negotiating, I received a call from a non-attorney, who said that if my client wanted to seek a couple of minor changes to the agreement that I had sent, it would require review from the general counsel’s office, which would delay the process by a couple of months.  This might have been a tactic on the other party’s part to cause my client to just drop the issues, but it’s frankly unacceptable that any attorney’s turnaround time for small matters would be that long.

By agreeing (in part) with clients’ frustration with the legal profession, I’m of course not saying that it’s a welcome trend that lawyers are being cut out of the process.  Companies that roll the dice by not involving attorneys at all are being shortsighted.  The solution for clients is not to avoid attorneys, but to insist that the attorneys they’re using, whether in-house or outside counsel, be attuned to practical considerations.