How I Contract: Contract Challenges and Tactics With Thalia Prozesky

How to Contract interviewed Thalia Prozesky, Independent Legal Consultant at Thalia Tech Lawyer (Pty) Ltd, as part of our How I Contract interview series. These interviews offer different perspectives from experienced lawyers and contract professionals on what works in the real world. 

Overcoming Early Contract Challenges

Thalia, thanks for being part of the How I Contract interview series. What was your biggest challenge when you started working with contracts? How would you deal with it if you could go back in time but keep all the knowledge and experience you have now?

When I initially transitioned from practicing trademark litigation to specializing in contracts, I met a significant challenge rooted in my professional background and the culture of the firms I had worked with. Having spent several years in top-tier firms that emphasized perfectionism, coupled with a natural inclination towards risk aversion due to seeing the consequences of litigation, I approached every contract with meticulous scrutiny. This meant pedantically reviewing and redlining every clause, regardless of the contract's nature, value, or risk. However, upon transitioning to an in-house role, I faced a substantial increase in the volume of contracts. It quickly became clear that my previous approach was unsustainable.

If I had to revisit my early days, I would prioritize my time allocation. Rather than treating every contract with the same level of scrutiny, I would employ a strategic approach, identifying and focusing on the critical contracts and clauses that carry the highest risk or impact for the organization. This shift from a one-size-fits-all approach to a targeted and strategic review process enables me to work smarter.

Drawing from the wisdom imparted by my mother during my school years, I have embraced the principle of "boxing clever" in my professional endeavors. This entails directing my energy to where it matters most in each contract, maximizing effectiveness while minimizing unnecessary effort.

Evolution of Contract Drafting Techniques

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

Over the years, I have evolved, driven by simplicity. I have transitioned away from traditional legalistic language, opting for plain language easily understood by all parties involved.

In addition, I have also created template agreements that can be tailored to address various stakeholders’ requirements (you don’t always have to “reinvent the wheel”). While imposing a standardized template on counterparties may not always be feasible, I have found value in developing a library of template clauses that can be incorporated into contracts.

Biggest Lesson Learned in Contracts

What’s your biggest lesson learned in contracts?

Without a doubt, it is important to have relationships with stakeholders and counterparties (this is not something taught at university). At the beginning of any instruction, my first step is to consult with the business to understand the transaction thoroughly. In technical transactions, it's imperative to break down complex concepts with stakeholders and avoid pretending you know it all (you’re not Oracle Delphi). Instead, I've found it invaluable to ask questions and engage in active dialogue, ensuring that I have clarity and alignment on key terms to empower me to draft or negotiate the most suitable contract.

Practical Contract Tips

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

My tip is simple: don't underestimate the power of your voice at the consultation or negotiating table; take part and speak up. As lawyers, we often bring a unique perspective to transactions, leading to valuable considerations that may otherwise be overlooked. One of my previous line managers always ensured that all his lawyers had a seat at the table, and it’s an approach I strongly recommend to ensure that you’re not the last pit stop on the negotiation journey.

Avoiding Common Contract Mistakes

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

My recommendation is to avoid:

• Playing email ping-pong, exchanging redlined versions of contracts when negotiating, and instead having a meeting or picking up the phone. Establishing a rapport with the counterparty is equally important as building a relationship with your stakeholder/client; it will help you understand their position and rationale (and even their next move).
• Not clarifying who holds the pen after each round of negotiation. I have spent countless times updating versions after the fact because we did not obtain this clarity (this time is often unbillable…just saying).
• Misunderstanding the signatory’s authority. Ensure that you understand the ambit of your client’s delegation of authority and determine if your client has to comply with any contract governance processes.

Key Areas to Watch in Contracts

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

Rushing over the limitation of liability and indemnity provisions and, whilst I’m at it, the intellectual property ownership clause. You may have drafted the most comprehensive contract protecting your client’s interests but missed a word or two in these provisions, which could result in either your client carrying all the risk or losing ownership of valuable intellectual property rights. Ultimately, a contract serves as both an agreement between parties and a tool for managing risks.

Simple Hacks for Contract Drafting and Negotiation

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

Leverage AI for:

• Redlining the first review of contracts.
• A “soundboard” for draft clauses.
• Spell checking.

IMPORTANTLY, I use AI to create efficiencies and never rely solely on it – IT’S A TOOL, NOT A SOLUTION.

Additionally, the following hacks may seem obvious, but they are effective and will save you time (and money) overall:

• Format correctly from the outset.
• Utilize cross-referencing.
• Provide detailed explanatory notes alongside redlined changes to provide context to the stakeholder or counterparty.
• As the drafter, include a separate clause or annex specifically dedicated to contract definitions and avoid embedding definitions within clauses to improve readability and accessibility.
• In the same breath, as a reviewer, when reviewing an agreement, print (if you’re born prior to the 80s) or display the definitions separately on a second screen for easy reference.

Oh, and did I mention using AI!!!

Recognizing Influential Mentors

If you could shout out to someone who has influenced your life in contracts, who would that be?

I am fortunate to have been inspired by two individuals who have profoundly impacted my journey in contract law, specifically technology contracting.

Firstly, David Tollen's book "The Tech Contracts Handbook" served as a guiding light for me as I transitioned into the world of technology contracts. Coming from a background in intellectual property law, I initially lacked expertise in technology contracting. However, the book, from page one(!), empowered me to navigate complex agreements confidently.

Secondly, Ridwaan Boda, whom I had the privilege to instruct during my early days in-house, left a permanent mark on me. When I found myself out of my depth, Ridwaan's guidance was instrumental in helping me navigate a complex agreement. Even in the face of pressure, his calm demeanor and emphasis on respectful communication and active listening taught me invaluable lessons about negotiation and professionalism. Ridwaan's passion inspired me to develop a deep appreciation for technology contracts.

Suggested Next Interview

Who should we interview next? Why?

For the aforementioned reasons, Ridwaan Boda. His experience speaks for itself. He has also supported my latest career move as an independent legal consultant, for which I am grateful.

If you'd like to learn more about Thalia, head over to her profile on LinkedIn or her website. https://www.thetechlawyer.co.za/