This is post #48 of my #365 day series.
As you can tell, I spent a lot of time thinking about an awesome title for this post. Back to the issue at hand, the thought I want to run down in this post is the discrepancy I’m seeing when it comes to deal making skills between business folks (namely corp dev and partnerships) and the lawyers they work with it. The thought spurred from a conversation I was having with my good friend Pamela (name changed for privacy reasons) who handles corp dev for a large tech company. We both found it surprising that our assumptions about lawyers were wrong — that they would naturally be good business people and negotiators to get deals done. We both lean on lawyers so much and nowadays I do a lot of deals opposite of them since they are also potential clients now. Here’s what we realized: for business people, we go into each deal (think of each deal as a game) with the intent to get the deal done. We score points only if the deal is consummated. For the lawyer, the deal being completed doesn’t change the math. That becomes an issue, because the lawyer and the business person’s incentives don’t align.
Before you go screaming bloody murder, I get it that not all lawyers assign the same points to risk versus no risk in the calculus of deal versus no deal. Those are the good lawyers. That’s not however, the bulk of the bell curve, so it would be a mistake to assume that lawyers are aligned with the way that business teams think about getting deals done.
What lawyers need to understand is that the business teams want to get the deal done for some strategic purpose. The purpose might have economic and/or strategic payouts such as brand exposure that would benefit the company. It is not just a bag of risk. The point is that the deal should get done and the legal teams should help drive the players in the game to that outcome. This is how and why business teams will get along better with legal teams.
That doesn’t mean that business teams are off the hook for helping make the groups better at collaborating. What would help ease the alignment issue is if the business teams spent the time to explain to the legal teams the benefits for the deal. That will help the legal teams understand that you’re not just trying to get the deal done, but that the deal yields benefits that outweigh just the risks. Remember that to a hammer, everything is a nail. When all lawyers think about is risk, that’s all they’ll care about. When you can help refocus their outcomes in the game, it’ll help them re-evaluate the decision tree:
