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You know that we lawyers joke that we live in our inbox. So it should not be surprising that we even negotiate contracts there. Sure, in the past lawyers negotiated deals face to face, or over the phone. But today they e-mail lined draft after lined draft. But do they ever talk? Does anyone pick up the phone to see whether an issue can be resolved more quickly and efficiently with a five-minute conversation rather than with multiple salvos of revised documents? SPEED ISN’T THE ONLY IMPORTANT FACTOR One of the benefits of electronic commerce is speed, and the flipside of that coin is the elimination of administrative delays. Yet conducting contract negotiations through exchanges of drafts by e-mail not only could harm the process, but also, paradoxically, slow it down. Consider all the information — albeit not electronic — that could be lost by the absence of conversations or other human interaction. For example, no one during e-mail or telephone communication has the chance to get all of the cues revealed by face-to-face visual observation. It becomes harder to evaluate what is truly important to your opponent from just a typed list of comments. The “throw in” point added to a contract, which might be downplayed in discussions, looks the same in e-mail as every other point. Clues about how a prospective business partner is affected by pressure, or how he or she responds to difficult challenges, must also be filtered through a delayed e-mail response. Another point to ponder is that because an e-mail reply requires at least a little time to compose and send, the prospective partner’s immediate reaction may never be known — or yours to him or her. PROS AND CONS OF ‘THE NEW WAY’ Yet e-mail etiquette often demands an immediate response, regardless of whether there’s a business necessity for such immediacy — a true case of form affecting substance. In fact, a prompt e-mail reply to a complicated situation may itself be a sign that the prospective partner lacks the judgment required to discern the important from the flood of e-mail chatter, and to think through an appropriate answer. Similarly, traditional negotiations have allowed parties time and opportunity to evaluate one another’s integrity. Potential issues that attorneys and contract drafters may not be able to resolve with words may go away if the parties trust one another enough to work them out, should a problem arise. Attorneys generally warn clients against relying on these “trust me” solutions, but often, while they write disclaimer letters for clients who choose them, good business judgment overrules legal advice. But e-negotiations may limit contacts between the parties to cold e-mails, or simply reduce the parties’ need to work together during negotiation. As a result, an opportunity for the principals to develop such trust at a personal level may never occur — with the result that it won’t be available when needed to work through difficult issues. The absence of direct communication can also undercut many of the subtle pressures that bring negotiations to a close in the real world. When everyone is in the same room, and often for long hours, a desire to get the deal done quickly can lead to compromises that may have been rejected earlier in negotiations, or never considered. The virtual deal room, in contrast, doesn’t have those same pressures. A party that wants to force an end to discussions must affirmatively choose to introduce deadlines and demands. Unless a business principal demands an end (to electronic discussions as well as to legal fees), closing can be delayed indefinitely. All of these “information losses” are even more evident in international negotiations. Although e-mail discussions may take place in a common language, it may not be the native language of any party. As a result, comments may have (or lack) nuance that dramatically affects their substance. The speaker may not even know that the message as stated and received was very different from what was intended. While the same problem exists in face-to-face or phone negotiations, body language and vocal tone may help to control confusion caused by language or cultural differences. IT COMES DOWN TO NEED AND FLEXIBILITY Still, negotiation by e-mail can benefit firms unwilling to let attorneys resolve business issues on their own. If all negotiations take place by exchanges of documents, the client can approve each draft before the attorney sends it. Of course, this extra step can drag out what may already be a stop-and-go process. Speed often is essential to making a business deal. e-Mail lets parties “e-negotiate” price and deal terms rapidly. But just because technology lets discussions be conducted entirely online, that doesn’t mean that they should be — particularly for more complex legal negotiations. Formal agreements, in contrast, demand reflection and planning, rather than just “negotiation by reaction.” Attorneys who appreciate when to use speed can take advantage of the convenience of electronic negotiations — provided that it doesn’t harm the client’s position. If a client will benefit from the different dynamics of traditional negotiations, then it and its counsel together should affirmatively try to re-create those conditions in the online discussion. For example, clients can call and e-mail both attorneys with instructions to simply “pick up the phone and talk to each other” (rather than debating a point by e-mail, billing all the while). Videoconferencing can also restore some face-to-face interaction without the cost of travel. Deadlines can be set to limit negotiating time — as long as the party setting the deadline is willing to walk away from the deal if the deadline passes. For large deals, however, requiring everyone — particularly attorneys — to attend a meeting prepared to get a deal done may be the only way to get closure. In the end, it may come down to this: even if attorneys prefer to negotiate behind the wall made possible by e-mail, sometimes stepping out of the inbox may be the only way to close a deal in the real world. Stanley P. Jaskiewicz, a business lawyer with Philadelphia’s Spector Gadon & Rosen, helps clients solve e-commerce, corporate, contracts and technology law problems, and is a member of e-Commerce Law & Strategy’s Board of Editors. Subscribe to e-Commerce Law & Strategy.

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