We’ve all heard the expression many times – you have to have the right tool for the job. Taken a step further, you could say you have to have the right tool to do this specific job and to do it right. After all, you can turn a screw with a butter knife, and you can pound a nail with a rock, but neither would be mistaken for the “right tool.”
The flip-side of this – and something that is often misunderstood by both lawyers and non-lawyers – is that one size does NOT fit all in the practice of law. This is true even when you know all of the facts and the applicable law.
Take an asset purchase transaction. The actual procedure and documentation for an asset purchase can involve a letter of intent and a lengthy due diligence process, followed by a 60 page asset purchase agreement with numerous warranties, representations, contingencies, conditions precedent and antecedent, post-closing escrows and indemnities, etc. Alternatively, it can be consummated by a handshake or a simple bill of sale.
The reality is, there is no one way to conduct or document a transaction. That is why the client’s preferences and risk tolerance and the terms of the deal must dictate the process and documentation. Just as a large scale livestock producer typically doesn’t want a 50 page document even for a complicated multi-million dollar transaction, a banker typically doesn’t want a 3 page document even for a fifty thousand dollar deal. It’s the lawyers’ job to determine which of the many approaches is appropriate for the deal and acceptable to the clients.
The appropriate documentation is determined first and foremost by the terms of the deal and (a close) second, by the parties and their preferences. The practice of law is not one size fits all – you need the right tool for the job.