Published on

Collaboration — an Effective Tool When Drafting Contracts

The process of drafting a contract is viewed differently by the people responsible for it. The questions of “Who is in Charge?” or “Am I Forgetting Something?” always seem amongst the top questions asked by the drafters. In our previous article, we looked at contracts from the perspective of the support team; today, let’s look at the role of collaboration amongst this team and how tapping into an experienced brain will help improve your contract’s overall effectiveness.  

Who’s in Charge? (CLUE: Not You)      

An attorney is often seen as the person in charge of drafting a contract; yet, though the attorney may lead the team who is responsible for drafting the contract, he or she is not in charge. When asking “Who is in Charge” of which provisions make it into a contract, the answer must always be: “The Goal of the Client!”. Therefore, when one begins down the path of reducing the provisions of an agreement to writing, care must be taken to keep the goal of the client in mind; and because ideas are in charge, the approach to contract drafting should always be collaborative.

The human mind is unique; it can remain in the depths of ignorance by refusing to learn, or it can soar to the heights of knowledge by simply allotting time to absorb something new. But the human mind is also subject to memory loss and often struggles to recall the information it once knew well. Dr. Saul McLeod’s survey of different theories surrounding why humans forget underscores the necessity of collaboration – displacement of short-term memories and the failure to retrieve long-term memories are ever present and pose a serious threat when it comes to keeping the goal of the client at the forefront of your drafting mind. 

When asking “Who is in Charge” of which provisions make it into a contract, the answer must always be: “The Goal of the Client!”.  Therefore, when one begins down the path of reducing the provisions of an agreement to writing, care must be taken to keep the goal of the client in mind; and because ideas are in charge, the approach to contract drafting should always be collaborative.

Memory and the law

I noted in my previous article that I operate in the Oil & Energy Industry, and for illustrative purposes, let’s turn our attention to this Industry’s quintessential contract – the oil and gas lease. My first few years as a landman were spent in the State of Arkansas, where the oil and gas lease form consisted of a single page of single-spaced, Times New Roman 8pt-font on letter-sized paper. In contrast, a “standard” California form oil and gas lease consists of some eight pages of the same font, size, and paper. The differences are not necessarily due to the divergent legal jurisdictions as much as they are due to local customs. The job of the drafter, however, is not to be restricted to the following custom, and care should be taken to avoid “what we’ve always done” if what we’ve always done does not help reach the goal of the client. 

I intend to speak more on standard forms or “boilerplates” in my next article, but I wish briefly to state here that as part of the Support Team we cannot be afraid to deviate from “industry norms.” The standard form provides a degree of comfort in that it has “thought” of most of the details for us; and, as highlighted in Dr. McLeod’s article, our memories need all the help they can muster.  And what’s more, is that we don’t have time to re-read applicable case law or the statutes that address each aspect of our contract! So, how do we deviate from the standard and maintain our client’s goals in the timeline they’ve imposed? Collaboration!

The Support Team (Your External Memory Bank)

The support team consists of the attorney, the paralegal, and the subject matter expert (for our purposes, the land manager) – each has accumulated years of experience in their respective fields for the very purpose of collaborating on this contract (whether they realize it or not). And so we stay on the same page here, I am not speaking from the perspective of only an attorney needing to seek support, but from the perspective that whoever leads the drafting process, be it the attorney, the paralegal, or the subject matter expert, they will need the support team in order to meet the goal of the client. 

In his book Understanding and Negotiating Oil & Gas Farmout Agreement, Dr. Patrick W. Fitzgerald makes a statement that I believe can apply to all types of agreements; he says, “If you are ever in a position to negotiate [an agreement], you will need to fully understand the goals and objectives of your company. Only then can you properly evaluate the impact of different deal terms that you can propose and that will be proposed to you by the other side.” To further illustrate Dr. Fitzgerald’s point, take the Oil and Energy Industry, for example; the attorney is not often in the planning room when leasing plays, or drilling schedules are being discussed. Instead, they are generally sought after the meeting is over to prepare a contract without being given the opportunity to understand the goal of the client. And my intuition would have me believe this practice is not all that uncommon in every industry. And yet, what the attorney might understand in regards to the law, he or she might miss key aspects of planning that those in the meeting would be privy to. In the same notion, the land manager might understand the expressed goal of the client but might not understand the nuances of the law that the attorney would. And the paralegal might recall the time when both the attorney and the land manager got it wrong and be able to draw from his or her lessons-learned portfolio to kindly remind them. The simple point is that our minds are finite, and the goal of the client trumps an individual’s title or education; therefore, there should never be just one mind contributing to the drafting process.

Summary     

The role of each individual involved in contract drafting or negotiations should be understood as crucial and careful planning, and collaboration should be a top priority when drafting and negotiating these vital business agreements. 

Attorneys, paralegals, and subject matter experts each support their clients by having their hands in the mixing bowl and each aims to confect an agreement that will meet a very specific need for their client. But the key to a great contract is more than simply having smart people on your team. It is found in creating an environment where each member is allowed to contribute their unique perspective and draw from their varied experience.   

Collaboration can be said to be an exercise to attain omniscience – it is the use of multiple finite brains to achieve a perfect outcome (or, at least, a nearly perfect outcome). The overarching best practice in contract drafting, therefore, is to have multiple professionals in collaboration. Indeed, the sage wisdom of the proverbial writer still rings true: “Without counsel, purposes are disappointed: but in the multitude of counselors they are established.” 

In my next article, I want to look at the anatomy of a contract and consider the use of Loio’s SaaS in assisting with the drafting process. Until then, let me ask you: “What role does artificial intelligence (AI) play in collaboration?” “Is AI a fourth member of the support team?” At Loio, we believe the answer is, “Yes”. More on that soon. 

Article by James M. Spillers

James M. Spillers is the Manager of The Spillers Group, LLC, which he owns and operates alongside his business partner (and brother) S. Parker Spillers. 

Their focus is on land management and the resources associated with land, and they primarily operate in the Oil & Energy Industry. 

Thank You! Welcome on board
We use cookies to improve our website's work and deliver better services.
Our use of cookies
Upgrade the manual re-reading of agreements with Loio's AI-driven Highlights. Be in full control over every editing decision, but have the power of machine learning analysis by your hand. Turn on the Highlights tool whenever you need an extra check of your document's most essential details.
Analytics
These cookies collect information that is used to help Us understand how Our Site are being used or how effective Our marketing campaigns are, or to help Us customize Our Site for You. We use Google Analytics to recognize You and link the devices You use when You visit Our Site or Service on Your browser or mobile device, login to Your User Account on Our Site, or otherwise engage with Us.
Communication services
These cookies collect information that is used to help Us to facilitate the interaction with You on Our Site. We also use those cookies to improve customer service by maintaining contact with visitors of Our Site through Intercom chat.
Ad Services
We and Our third-party partners may also use cookies and tracking technologies for advertising purposes. These third-party services collect information about Your use of Our Site over time so that they may play or display ads on devices You may use, and on other websites, apps, or services.