An “average” sale, purchase, rental, or lease contract takes
about an hour or two to thoroughly read and spot issues; a one pager takes less
and a multi-document takes more. Once
the attorney is familiar with the subject matter and intent of the parties, the
redlining begins. If the original
document was drafted from a one-sided perspective where all of the risk is
shifted from the offering party, the edits will be significant. If the document is generally balanced (where it
is a matter of watching out for the occasional slips into greed and selfishness)
only a few edits may be necessary.
Attorneys are taught to “zealously represent their clients.”
To most, this means attempting to shift all the risk, and “while I’m at
it, why not slip a few things past the other side.” The typical response is to take a position at
the other extreme with a goal of meeting in the middle. The redlining process attempts to tip the
scales and to find all the “gotchas”.
A seasoned, business-oriented attorney will recognize that
client representation means doing
business, not negotiating, disputing, and litigating. He will represent your interests, rather than
your position, and offer a balanced agreement to begin with. In most cases, the other side quickly agrees
to consummate the deal because it is such a welcome relief from the many
terrible contracts being pushed on businesses.
As an attorney representing the receiving party, a balanced response to
a one-sided offer is usually met with the same welcome relief.
Given the range of balance or lack thereof in the offered
document, redlining (marking words for deletion and inserting new language) may
take two to three hours.
After the review and redlining, all that information must be
communicated to the client so he knows where he stands. The client needs to make business decisions
on which risks to accept and which provisions to negotiate. (Notice that we are not talking about
rejecting the offer. The business folks want
to do business and it is the attorney’s job to facilitate the transaction.) Communications may take another hour or so
depending upon how much detail the client needs.
In some cases I have personally read, redlined, and
responded to clients in an hour, but the average business contract seems to
take about three to four hours for a complete review. Add in a review of negotiated terms, and the
average attorney time may be five or six hours from start to finish.
Again, it all depends on the document and the parties. The time invested by the attorney in the
review and editing can vary significantly.
Why go through all that?
Why pay an attorney to read your contracts? Because, it is much less expensive to avoid
problems than it is to fix them. You
say, “But this is going to cost me a small fortune!” Not if you have a working relationship with
your attorney. An experienced business
attorney in solo practice in Dallas, TX typically charges $300 to $350 per
hour. However, if he can depend on you
for repeat business, he will likely discount the fee by as much as fifty
percent. Give him the equivalent
business of full time in-house work and you can probably hire him for a third
of his normal hourly fee.
Bottom line on what it costs? As any good attorney will tell you, “It
depends.” It depends on all the
facts. The fees will vary. If you want a fixed fee for a contract review
you can hire in-house counsel to conduct all of your reviews for a salary. If you insist on a flat fee for a single
contract review, expect to get canned templates and be content with marginal advice.
Was the original question answered to your complete
satisfaction? Probably not, but at least
you now have a few reference points from a business oriented attorney with more
than thirty years of experience.
