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May 12, 2008

How To Earn Undying Loyalty From Business Clients (Part II) - Guest Blogger - Anita Campbell

(You can read Part I here.)

I have had the amazing good fortune of becoming 'friends' with Anita Campbell of SmallbizTrends and she graciously agreed to guest post here on a topic which is dear to her heart (as a former GC), writing contracts for real people, not court. She now runs a small business at Small Business Trends (www.smallbiztrends.com).

How to Earn Undying Loyalty from Business Clients by Standardizing Contracts and Writing in Plain English (Part II)

So, What is a Better Contract?

Having told you some of my pet peeves as a small-business person around contracts, you’re probably wondering, what makes a good contract from the client’s perspective? 

First of all, I take it as a given that a contract should protect the client’s legal interests – first and foremost. 

Beyond that, what makes a great experience for the client has more to do with how easy, fast and understandable the transaction “feels.”

Here are some guidelines for business-friendly contracts, documents and interactions: 

1. Write in plain English.  You’re probably aware there’s a movement for writing plainly, e.g., using I, we and you in contracts.  Some lawyers speak disparagingly of plain English contacts –– one lawyer I know calls them “kiddie” contracts.  But small business owners don’t think that way.  We are too busy running our businesses to be impressed with high-falutin’ legalese.

2. Write contracts for a 12 th grade education or lower.  This helps keep the frustration levels down.  At the end of this article is a citation to a tool that will help you check your contract language for reading comprehension scores.

3. Empower your clients through standardization.  By empower I mean, give clients form contracts that can be filled out with a minimum of involvement by you.  Or get them involved in the process of creating contracts and documents, instead of dropping everything in your lap.

For solo practitioners, this is especially important.  The last thing you want to be is a bottleneck for your clients’ business.  There’s only one of you, but many clients.  Do you expect them to wait for weeks until you can free up your time?

Instead, why not follow the lead of in-house counsel in business?  As in-house counsel, our staff was limited but the demands endless.  We did not get paid by the hour, so efficiency was top of mind if we wanted to have a personal life.  We standardized as much as possible into forms that could be filled out on a word processor by the line managers, by filling in blanks.  We also created sets of instructions to go with such contracts.  That way, we tended to spend the bulk of our time once to create a form and instructions, rather than reinventing the wheel over and over.

Another thing that we did was institute a protocol where the line managers filled out a document as far as they could, and then made an appointment to sit down with us in our office together to review it. The review requirement was written right into the instructions and also as a big bolded note right on the form contracts – to prevent non-lawyers from going it alone. The client felt empowered and in control because he or she set the pace.  But the lawyer acted as a safety net to ensure that unique circumstances were addressed properly and legal advice dispensed. 

For some types of transactions, rather than creating forms, we created detailed checklists for clients to fill out and bring to the lawyers.  Those checklists helped the client understand the transaction better.  Checklists shortened the cycle time for completing deals.  And they save the lawyers hours of time, saving the client money, too.

Yeah, but Standardization Undermines My Billable Hours!

Now, all of this standardization may sound counter to earning a living.  But I suggest just the opposite -- if you make it as easy and painless as possible for clients to deal with you, they will be eternally loyal.  They will so enjoy interacting with you, that they will find a recurring need for your services.  And they will value your services more, because they know you value THEIR time -- and their budget. 

Contrast that with the lawyer who insists that every contract or document must be written from scratch; who makes legal mountains out of molehills – and makes everything so complex that the small business owner cannot even delegate to staff, but has to get personally involved each time. 

What happens to that lawyer?  Clients get frustrated.  They avoid coming to the lawyer even when they know they should.  Why?  They know the process will not be efficient.  They fear their business goals will be delayed. They start making lawyer jokes. That’s when they start going bare, without legal counsel.  Or worse, they start pulling out old agreements or downloading contracts from places like www.DocStoc.com and playing attorney without the benefit of proper advice.

What Can Be Standardized?

Many contracts and business documents can be standardized and turned into fill-in-the-blank forms, if you take the time to do so.  Here is some low hanging fruit:

Employment offer letters

Customer contracts

Non-disclosure agreements

Consulting agreements

Agreements to hire freelancers or independent contractors

Employment handbooks (to cover many employment-related issues)

Resources to write better

Let me close by pointing you to several online resources you can use to make contracts more understandable and less frustrating for clients:

Readability test: http://www.online-utility.org/english/readability_test_and_improve.jsp

Plain English for Contracts: http://www.partyofthefirstpart.com/.  Check the associated blog for this site, too, for a list of other websites and blogs that cover plain English writing:  http://thepartyofthefirstpart.blogspot.com/

Transcript of Podcast for using plain English in general today:   http://www.thecomwellgroup.com/podcast/9-2006.htm

* * * * *

Anita Campbell is a former General Counsel who now runs a small business at Small Business Trends (www.smallbiztrends.com).

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Comments

Jeff Hildebrant

I am a contracts lawyer and I ran across this post by accident, happily. This is a very helpful post and I agree with the list of "do's and don'ts" and of standardize-able agreements.

I would just add that, for subcontracts and complex vendor agreements, the most important areas for speaking plain English are the payment terms (when do I get paid?) and performance requirements (what am I supposed to do?). The second area, especially, can get complicated and needs to be spelled out, no matter how many pages it takes. To make life easy on the client, I always prepare a one-page summary of the highest risk areas, so they know. I also offer a flat fee to review or draft contracts, so they don't have to worry that me or my associates might pad the bill.

Rush Nigut

This is an excellent post. I agree completely with the notion that a lawyer should draft certain standardized contracts for business clients. It has been my experience that it does help create "undying loyalty".

But I do offer a bit of caution regarding standardized contracts. I have seen a number of instances where business clients take a standardized contract and fail to adapt it appropriately for the unique situation. The business client needs to be reminded that a brief review from the attorney is still often necessary, even with standardized contracts. It could help prevent some embarassing situations where language from a form contract just doesn't fit into the current business transaction, does not protect the business client adequately or fulfill the goals of the current transaction.

Rush

Anonymous

But I do offer a bit of caution regarding standardized contracts. I have seen a number of instances where business clients take a standardized contract and fail to adapt it appropriately for the unique situation. The business client needs to be reminded that a brief review from the attorney is still often necessary, even with standardized contracts. It could help prevent some embarrassing situations where language from a form contract just doesn't fit into the current business transaction, does not protect the business client adequately or fulfill the goals of the current transaction.

The comments to this entry are closed.