Becoming a business owner helped me become more sensitive to the expense side of transactions. This experience continues to inform and change the way I negotiate contracts and represent clients in general. One of my first transactions as a solo corporate and transactional attorney proved to be an excellent reminder of the importance of taking initiative on behalf of my clients in terms of cost savings.
Shortly after opening my own legal practice I represented a client in a joint venture, which included the acquisition of real estate located in Nevada. However, there was a gap period between funding and closing the deal. The parties were ready to close, so the decision was made to do so in escrow.
I was retained to prepare the escrow agreement and security documents, and to facilitate the closing. The transaction parties had agreed to engage a Nevada attorney to act as the escrow agent. He was asked to hold the security documents in escrow for less than a month, pending the availability of funds.
After I drafted a simple escrow agreement, the proposed escrow agent requested a $2,500 fee for his services. That struck me as exorbitant, particularly because my legal fees for drafting the agreement were less than that.
I recalled a similar transaction in which the title insurance company held certain documents in escrow at no cost, as an accommodation for handling the title work. I reached out to my contact and confirmed that the title insurance company routinely acts as escrow agent when they are handling the title work on a transaction. I let my client know I had found an independent third party willing to provide the escrow services at no additional cost, if we shifted the real estate title work to them. The client agreed.
A little bit of initiative and thought, saved my client $2,500, but that is not the whole story.
I am proud to say that becoming a business owner made me a better business attorney. Had I remained practicing in “BIG LAW,” as I did for the first 16 years of my career, I don’t think the request for $2,500 to hold documents in escrow would have seemed unreasonable. I certainly wouldn’t have given it much, if any, thought. Nor would I have taken the time to seek out a cost-saving solution, or taken the initiative to present a cost-saving alternative to my client.
Today, as a business owner, I am far more aware of transaction costs and business expenses. My approach to negotiating contracts and representing clients has become ever more practical since the inception of Aimee B. Davis Law P.C. It is this knowledge that served my client well in the Nevada transaction, and it continues to serve my clients well every day.
Have questions about the expense side of certain legal transactions? Please feel free to contact us at (917) 617-2243 or email firstname.lastname@example.org.