“You Can’t Get There From Here.”
There is an expression, apparently attributed to folks from Maine: “you can’t get there from here.” It may have something to do with all of the lakes, mountains and vast rural stretches that make up much of Maine. I’ve heard that phrase too many times throughout my career. But not once was the person reciting it with conviction someone from Maine. No, never. It has always been other lawyers going to great lengths to emphatically explain why the transaction, project or their client had just hit a dead end.
It is often true in business that direct routes are elusive. But twists and turns should never lead to dead ends. Only roadblocks. And the thing about roadblocks is that they are temporary.
When I was a young attorney in the M&A group at Shearman & Sterling, I remember the important advice that one of the senior partners gave me. A new deal had just come into the office and I was sitting in his office and watching him pace back and forth. He liked to put on his New York Yankees baseball cap–backwards–while he was thinking. He asked me, “Why does the client want to do this deal?” He said that in every transaction there are a handful of critical objectives for a client that, if not achieved, are likely to make the transaction not worth pursuing. He said, “It’s your job to make sure you understand what those critical objectives are and then to make sure that you fight like hell to get those objectives. But don’t waste the client’s time and money arguing about and obsessing over the things that are insignificant and irrelevant.”
The thing about identifying and focusing on the most deal-critical objectives for a client is that they are likely to be the most critical objectives for the other side too. Focusing on such common goals and priorities can not only eliminate most roadblocks before they even arise but will make it much easier to find the paths around those that remain.
But how can that be true? Say for example, my client Ms. Jones wants to purchase an existing thingamajig manufacturing business from Mr. Smith. For Ms. Jones, to build her own manufacturing plant from scratch would take too long and she would lose all of her customers to her competitors. Mr. Smith wants to retire and build his dream beach house and he can only do that if he sells his factory. Of course, Mr. Smith wants to sell his business for as much money as possible and Ms. Jones wants to pay as little as possible. Here is the problem. Mr. Smith needs $10 million. It’s an expensive beach front house! But Ms. Jones only has $8 million available and cannot pay anything beyond that.
Doesn’t this mean that the critical objectives of each side are different? Absolutely not. The critical objective for both parties is the sale of the thingamajig manufacturing plant, not the purchase price that will be paid. The difference in price is merely a roadblock. And remember, roadblocks are always temporary. For example, Ms. Jones could agree to pay Mr. Smith $8 million and help Mr. Smith get a $2 million loan from a bank in order for Mr. Smith to build his dreamhouse. To get the loan, Ms. Smith could agree to provide a guarantee to the bank and enter into a contract with Mr. Jones to make deferred payments to Mr. Jones from future sales of thingamajigs equal in amount to Mr. Jones’ loan repayments. Roadblocks are nothing more than opportunities for creative workarounds.
When working on a project for a client, the first thing a lawyer should ask is how the client defines success for the project. What are those critical outcomes for the business venture that can be life or death for a transaction? A lawyer who is not on the same page with a client cannot effectively represent that client. Only when the lawyer can truly understand and recite the client’s critical goals, can the lawyer begin to clearly see the potential legal impediments to success and identify the most pragmatic, achievable legal solutions.
Seeing the world through my client’s eyes is something I have always done. That’s how I help my clients achieve their most important goals. I can always get there from here. Even in Maine.