"Know why every clause is in the contract" — How I Contract Interview with Mark Anderson

We have had the great pleasure to interview Mark Anderson, Managing Partner at Anderson Law LLP, member of the Law Society, and author of the Execution of Documents: A Practical Guide.

This interview is part of the How I Contract interview series designed to offer various perspectives from experienced lawyers and contract professionals on what works in contracts in the real world.

Dive in! 

What was your biggest challenge when you started working with contracts? If you could go back in time, but keep all the knowledge and experience you have now, how would you deal with it?

My first significant job was as a sole in-house lawyer for three years.

I had very little experience of contracts or commercial negotiation. I taught myself, through doing it.

But at times my work was rather superficial — making changes because I had seen them in other contracts, rather than really understanding their commercial and legal significance.

After a year or two, I realized that I needed to get to grips with the law on contractual liability, and I studied the practitioner textbooks on this subject — such as they were. I should have done this much earlier. 

How have your contract drafting techniques changed over the years? What did you stop doing? What did you start doing?

In my first job, I tried to be helpful, and was perhaps sometimes too client-centric, with very simple contracts.

Then I moved to a traditional law firm and had to rein back some of my instincts to fit in with what the partners wanted me to do, which included more thorough contracts and more conventional drafting.

When I set up my own firm 30 years ago, I tried to combine these approaches — helpful wherever possible, but not forgetting the need, sometimes, to take an independent view and not be too influenced by short-term commercial pressures.

This has led me to develop template agreements that aim to be clear and focus on key issues, but also try to be rigorously accurate in their language and in the way they take account of case law.

Imagine sharing a contract-related story from your career to inspire or educate your younger self. What would that story be? 

I would tell my younger self that we all make mistakes, and not to be overly worried when we do.

Sure, don’t make the same mistake again, but you know that already.

Some of the people you worked with cared more about not getting anything wrong than they did about adding real value to the client, which sometimes requires a more creative, fluid approach.

They stamped on you when you made mistakes, rather than praising you for creativity.

Contract drafting and negotiation is a multi-factoral skill set, and nobody is perfect at all of those skills.

What’s your biggest lesson learned in contracts?

That I’m much better at problem-solving and creative drafting than I am at macho posturing in negotiations.

Fortunately, most of the contracts I have been involved with have been what the English courts call relational contracts, where my skill set has been useful.

If you could share just one practical, real-life contract tip, what would that be?

In negotiations, you should try to speak to the other side fairly early on, rather than exchanging numerous drafts of the agreement. It really does help you to make progress. 

What mistakes should contract lawyers and professionals avoid when working with contracts? How would you avoid them?  

The most common mistake that I see is overly complex language where the meaning is lost.

For example, mutual indemnity clauses that are really unclear as to who has to indemnify whom. This may be because the drafter hasn’t taken the time to make the meaning clear.

Sometimes, after struggling to negotiate indemnities, I have suggested deleting all the indemnity clauses, and this has broken a logjam. Obviously, you need to think carefully before suggesting this, as to whether it is likely to be in your client’s interest.

What’s one of the easiest ways to screw up a contract?

Starting with the wrong template, then insisting it is used rather than being open to replacing it with something closer to the deal structure.

Are there any simple hacks our readers can use right away to improve their contract drafting and negotiation skills?

Good preparation.

Know why every clause is in the contract.

At the drafting level, keep your sentences short and direct. Avoid legalistic language unless you are really clear why it is necessary. Clean up inconsistencies (e.g. indemnities in different clauses that use different language, only because they have been copied and pasted from different sources).

If you could give a shoutout to one (or more) person who has influenced your life in contracts (or is your mentor), who would that be?

It has to be Ken Adams, author of A Manual of Style on Contract Drafting, published by the American Bar Association. He has dedicated the last couple of decades to improving contract drafting.

What interview question would you like to be asked and how would you answer it? 

What’s your favourite colour? (Joke!) A better question would be: why are large organisations resistant to simplifying their contracts? I suspect the answer is that decision-makers are reluctant to take the perceived risk of being blamed for omitting some important protection. And that they don’t really understand those risks and don’t know how to balance them against the benefits of simpler contract terms (e.g. increased deal flow. Or that they are creatures of habit, and think long, complex contracts are what everyone does, so why should they step out of line. All bad reasons, in my view.

Who should we interview next? Why?

Ken Adams, if you haven’t interviewed him already. Because he is the guru of contract drafting.

Thank you very much, Mark!

Want to learn more about how other experienced lawyers and professionals excel at contracts in the real world? Check out these interviews.