I'm not sure what you're trying to say exactly. If it's not your experience that both sides usually want to make the deal happen when the deal is genuinely mutually beneficial, then I'd say you're probably working with the wrong people (it's amazing how many perverse incentives exist in many companies and some entire industries). I'm not saying that doesn't happen. I just prefer to avoid those types of deals if possible. In fact my point was to the effect that things are quite a bit less scary when you do avoid those types of deals.
But my experience with both big and small deals, is that there's often much more flexibility than people assume, and the only way to know how much flexibility there is, is to push back a little (not for the sake of pushing back, but if there's something that you genuinely want or that bothers you about the deal, speak up).
Also, you seem to be saying that when deals get to a size large enough to warrant participation of legal departments, that there is no flexibility. That is the opposite of true, as the only reason the legal department would be involved in the first place is to work out the "custom", or non-standard, parts of the deal. If there were zero flexibility in the deal, then everyone would just use the standard documents that already exist for that deal, fill in the blanks, and sign away.
Why do large deals often result in greater than $50k-$200k or more in legal costs though? It's because the two legal teams are actually negotiating (i.e. fleshing out and changing the terms of the deal that need to be changed).
My point here is that unless the deal is large enough to cover legal costs, you have to fit your deal into the standard, pre-approved deal structures.
This flexibility of which you speak, sure, some flexibility exists within the blanks on those forms, but the deal structure is fixed, at least at the deal sizes where I live.
>If it's not your experience that both sides usually want to make the deal happen when the deal is genuinely mutually beneficial, then I'd say you're probably working with the wrong people (it's amazing how many perverse incentives exist in many companies and some entire industries). I'm not saying that doesn't happen. I just prefer to avoid those types of deals if possible. In fact my point was to the effect that things are quite a bit less scary when you do avoid those types of deals.
Sure, they want to make it happen, but they are only willing to negotiate, as you said, about what to put in the blanks on the form. My theory is that legal makes non-standard deals not make sense until you get into the multi-million dollar range.
If you have a $400,000 deal, and you spend $25K on lawyers and so does the other guy, well, that's more than 10% of the deal value gone. From my understanding, on a company acquisition of that size, $25K is on the very low end of what one party might pay for legal help. It could easily be twice that.
The time I had an opportunity to see such a deal? that 10-20% would have been the profit on the deal.
(Interestingly, the deal might have gone through, if we knew of a standard deal structure... or trusted oneanother more.)
My theory as to why I don't see the deals you say are the only deals to take, where there is both significant money and significant flexibility is that I don't bring enough value to the table to pay for legal.
>Also, you seem to be saying that when deals get to a size large enough to warrant participation of legal departments, that there is no flexibility. That is the opposite of true, as the only reason the legal department would be involved in the first place is to work out the "custom", or non-standard, parts of the deal. If there were zero flexibility in the deal, then everyone would just use the standard documents that already exist for that deal, fill in the blanks, and sign away.
You are confused because I mentioned the really small deals. If I do a deal with someone I know that is just a few grand, we can do it on a handshake. But most of those deals are small that while I could pay rent that way, there's no way I could make as much as a mediocre contract sysadmin.
I understand that enabling non-standard deals is one of the things that lawyers are for.
I said:
>>The less standard the deal, the more it costs in legal. I imagine this is why large companies are so... inflexible on sub-MM deals.
so I largely don't think we're in disagreement. You are probably just dealing in larger deals than I am... that or you are willing and able to do larger deals than I am on trust.
But my experience with both big and small deals, is that there's often much more flexibility than people assume, and the only way to know how much flexibility there is, is to push back a little (not for the sake of pushing back, but if there's something that you genuinely want or that bothers you about the deal, speak up).
Also, you seem to be saying that when deals get to a size large enough to warrant participation of legal departments, that there is no flexibility. That is the opposite of true, as the only reason the legal department would be involved in the first place is to work out the "custom", or non-standard, parts of the deal. If there were zero flexibility in the deal, then everyone would just use the standard documents that already exist for that deal, fill in the blanks, and sign away.
Why do large deals often result in greater than $50k-$200k or more in legal costs though? It's because the two legal teams are actually negotiating (i.e. fleshing out and changing the terms of the deal that need to be changed).