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Tuesday, October 02, 2018

Teaching Transactional Skills

The following post is by Stephen L. Sepinuck, Frederick N. & Barbara T. Curley Professor and Director of the Commercial Law Center at Gonzaga University School of Law, and is sponsored by West Academic.

If you mention transactional lawyering to someone, that person is likely to envision a scribe toiling alone in a poorly lit office. Like Bob Cratchit working 60 hours per week for Ebenezer Scrooge (although Cratchit was a clerk, not a lawyer). Perhaps this vision is more common among our litigation-focused colleagues than among law students who never even contemplated what a transactional practice might be like, but the fact remains that the subject lacks allure. Put simply, transactional lawyering does not make for good television.

To some extent, this rather visceral reaction is justified. Two of the most important transactional lawyering skills are the ability to draft contractual terms with precise language and the ability to spot and resolve ambiguity. Teaching these skills requires repetition and practice, which for some can create tedium (it is asking too much to expect students to share my geekish enthusiasm for the quirks of the English language). So, while I cover these skills extensively in my course – and in my book co-authored with John Hilson, Transactional Skills: How to Structure and Document a Deal (2d ed. 2018) – we put equal or greater emphasis on other skills: imagination, creativity, and strategy.

Imagination. Litigators deal with the past, in which the facts are fixed. Transactional lawyers deal with the future, in which the possibilities are infinite. The client might want the lawyer just to document the deal, but the lawyer needs to consider all the things that might go wrong. What if the electronics that your retail client is buying from the manufacturer become antiquated before they can be sold? What if the painting your client is about to buy turns out to have been looted from its rightful owner during World War II, but that fact is not discovered until after the limitations period has expired on a claim for breach of the warranty of title?
Creativity. Many transactions are relatively simple, two-party affairs that resemble countless prior transactions. But some clients come to the lawyer more with an end goal, rather than a specific deal, and the lawyer needs to devise a transaction that will best achieve the client’s objectives. Will a stock sale, rather than an asset sale, avoid the restrictions on assigning contract rights? Should a planned loan be made to the parent company and guaranteed by its subsidiary, or vice versa, so as to minimize the risk that the transaction involves a fraudulent transfer?

Strategy. Strategic thinking is perhaps the most important skill a lawyer needs and the most fun to teach. Stressing it in class immediately conveys to students that transactional lawyering is less the work of scribes and more like that of skilled chess players. For example, in drafting an agreement for the purchase and sale of a business, should the continued employment of key personnel be a covenant, a condition, or both? How should the covenant not to compete in that agreement be drafted if the jurisdiction follows the “blue-pencil” rule? How should an attorney’s fees clause in a form commercial lease be revised if the jurisdiction enacts a reciprocity statute?

I cannot claim to inspire all my students and I do not try to convert them all into transactional lawyers. I can say, however, that this approach appeals to many of them. More important, most of them come to the course with no interest in transactional lawyering and many leave it with a very different attitude. As a teacher, I cannot really ask for more.

Posted by Howard Wasserman on October 2, 2018 at 04:46 PM in Sponsored Announcements | Permalink


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