I am often asked by business partners or associates whether it’s worth having legal counsel in the room or not. In the thrilling world of commercial transactions, the question looms large: to hire a lawyer, or to take a leap of faith solo?
Picture this: you're on the brink of a deal, your heart is racing with the thrill of potential profit, but there's a specter lurking in the shadows — legalities.
Enter the lawyer, armed with a briefcase and a flair for the dramatic, ready to safeguard your interests. But there's a twist. Lawyers have a knack for wrapping deals in so many legal layers that you might forget what you were dealing for in the first place.
It’s like planning a simple dinner date and ending up with a 10-course meal where you’re not sure if you're the guest or the entrée.
The decision to bring a lawyer into your commercial escapade is a bit like choosing between a party and a quiet evening at home.
One lawyer confessed, "If the deal's a hit, we're just part of the crew, but if it tanks, suddenly we're the captain of the Titanic."
It’s a classic case of damned if you do, damned if you don’t. Lawyers, in their quest to shield you (and admittedly, themselves) from every conceivable legal boogeyman, might just be the iceberg to your Titanic, sinking deals with overzealous protection.
Picture this scenario: you're ready to seal the deal, dreams of success dancing in your head, but your lawyer is wrapping it in so much legal bubble wrap that it's suffocating. The lawyer's mantra?
"Better safe than sued."
In this legal overdrive, the deal starts to resemble an over-insured mummy — too protected to move.
What are the odds?
Here’s the kicker: As a client, you've got to understand that in the business bazaar, there's always some risk lurking. It's like wanting the thrill of a rollercoaster ride but insisting on a seatbelt, airbags, and a parachute. Sure, safety is great, but at what cost to the thrill?
In the end, the decision to bring a lawyer into your commercial escapade is a bit like choosing between a party and a quiet evening at home. Each has its merits, but it's about what kind of ride you're up for. Just remember, in the high stakes poker game of business, a lawyer can be both your ace - and your joker.
Next time you're on the brink of a commercial deal, ask yourself ‘Do you want to dance the legal tango?’ Or ‘Am I ready to salsa solo?’ Remember, in the dance of deals, sometimes the music stops unexpectedly. The question is, do you have the right dance partner?
To illustrate the oversights of legal teams, in 2006, Tishman Speyer and BlackRock Realty acquired Stuyvesant Town-Peter Cooper Village, a massive apartment complex in New York City, for $5.4 billion.
This was one of the largest real estate transactions in US history. However, it quickly ran into trouble due to legal challenges. The new owners planned to convert rent-stabilized apartments to market-rate rents to recover their investment.
The tenants filed a lawsuit, claiming this violated rent stabilization laws. In 2009, the New York Court of Appeals ruled in favor of the tenants, causing a significant financial blow to the owners.
Turning around Empire’s fortunes
In a positive example, consider the refinancing of the Empire State Building, one of New York City’s iconic landmarks. In 2006, the building was under the control of Peter Malkin and Leona Helmsley. The property was entangled in a complicated ownership structure and faced numerous legal disputes. Effective legal strategy and negotiation led to the consolidation of the building’s ownership under the newly formed Empire State Realty Trust.
This legal maneuvering facilitated a massive refinancing deal in 2010, valued at about $1 billion, which was crucial for the building’s renovation and modernization.
In conclusion, you need your seatbelt, but make sure you are not driving off a cliff.
