As part of the TPI Blog series, we welcome this piece by Eryn F. Correa. Eryn is the co-founder and managing partner of Crivella Correa, a law firm built by entrepreneurs for entrepreneurs. Prior to founding her own firm, Eryn worked as in-house securities and board governance counsel for Alcoa Corporation, and in private practice for K&L Gates LLP in both their Pittsburgh and Dubai offices. She serves on the boards of Oikocredit US and Sustainable Pittsburgh and is a fellow in the Royal Society for Arts, Manufacturers and Commerce. Eryn is passionate about partnerships because she believes that only in leveraging the unique talents and strengths of all sectors can we truly collaborate to make the world a better place.
On my daily quarantine walk, I was listening to the podcast Dare to Lead with Brené Brown, when Ms. Brown started talking to her guest, Jim Collins, about contracts. Mr. Collins explained that his mentor drilled into him the importance of having really good contracts, but not because you should ever need to use them. Rather, he continued:
“The purpose of a contract process isn’t negotiation, it isn’t to have legal recourse or to go to court. You hopefully never have to do any of that stuff. The purpose of a contract is so that both parties never have a misunderstanding about what it is that you’re agreeing to do.”
As an American lawyer myself, I nearly fell over. This understanding of a contract flew in the face of all my training. Because, what is a contract other than a way to barricade your client against an inevitable parade of litigious horribles?
For lawyers accustomed to writing contracts from this defensive stance, partnering agreements which are supposed to capture a spirit of collaboration, can present a challenge. Below are a few reasons you may find yourself at odds with the lawyer you want to memorialize your partnership and a few tips on how you can leverage your lawyer’s contract-drafting skills to help draft your partnering agreement.
- The Partnership is Not Their Client; You Are
The first reason your lawyer may insist on clauses that are more heavily slanted in your direction is because you are their client and their duty of advocacy is to you – not the partnership. In the United States, lawyers have an ethical duty to “zealously advocate” on behalf of their client. What this means for you in drafting your partnering agreement with your lawyer is that the lawyer is not looking out for the best interests of the partnership. Your lawyer wants to look out for your best interests, which could create tension when you are looking to build collaboration.
- Contracts Are Built On Quid Pro Quo
Unlike partnering agreements, contracts are built on the concept of mutual exchange. By law, contracts are not binding or enforceable without “consideration” or quid pro quo – the bargained for benefit each side expects to receive in return for the value they provide. Conversely, a partnering agreement focuses on pooling resources towards a common goal. To illustrate, think of buying a coat from a local boutique. In a traditional contractual setting, you give money and, in return, the boutique gives you a coat. This is a mutual exchange. This differs from a situation where you are partnering with this boutique to work towards the common goal of providing coats to those in need. In that situation, the boutique may provide coats, and you may provide the money to pay for the costs of distribution, but the beneficiary is the cause, not the parties involved. This situation can create challenges for your lawyer, who is accustomed to negotiating for and ensuring a mutual exchange of the parties.
- A Partnering Agreement is Meant to Build Trust; Lawyers Want to Mitigate Risk
One fundamental place lawyers can find themselves at odds with the process of writing a partnership agreement is in the spirit of the agreement itself. Partnering agreements are aspirational documents that memorialize a hopeful union’s vision. However, a lawyer’s job is to anticipate and mitigate against all the ways this union could sour – to be a grounded voice of reason (read: killjoy) in your honeymoon phase. This job includes drafting contracts that make it difficult for the other party to back out of their commitments. Rather than going forward in a spirit of faith in both parties’ commitment to the partnership’s goals, lawyers prefer a spirit of “trust but verify”, which can create tension in the goals of your partnering agreement.
- Partnerships Are Meant to Evolve; A Contract Does Not
By design, partnering agreements are meant to be iterative documents that can be adapted over time. In contrast, a contract is meant to bulwark against this kind of change and prevent deviations from what is agreed. In the United States an “integration clause” – a provision that states that the contract is the final agreement – is considered best practice specifically to prevent further changes to the parties’ agreement. Indeed, in the event the parties do want to make changes to the obligations detailed in a contract, further negotiation and additional bargained-for consideration is often required. Because of this, it can be difficult for your lawyer to embrace the naturally evolving nature of the contract and be comfortable leaving certain obligations open-ended.
How to Make Your Lawyer Work For You
With all these challenges, it can seem that your lawyer may be the exact wrong person to help you draft your partnering agreement. But this is not so! Lawyers are strong writers who are practiced in translating clients’ needs onto paper. Additionally, the skills they have in looking out for a client’s interests can be redirected towards advocating for and protecting your partnership. Who better to help you draft this initial partnering agreement?
The most important thing for you to do is to find a lawyer who understands (or is willing to learn about) partnering, understands your partnership’s goals, and is keen to find ways to help make it happen. Bring them on early in the process and get them excited both about the partnership itself and the opportunity to be creative and put their skills to the test in drafting an agreement that differs from the traditional contract.
Partnerships can open up far more innovative approaches but can also entail much greater risk than business-as-usual. A lawyer to help understand and manage risks can be an important ally both to you, and to the partnership.
 Brene Brown with Jim Collins on Curiosity, Generosity, and the Hedgehog, podcast,
TPI Blogs are written by TPI Associates and partners to share how they are fostering collaboration and building partnerships in practice. If you would like to contribute to our TPI Blogs series, contact us at firstname.lastname@example.org with TPI Blogs in the subject line.