In today’s disrupted oil and gas industry, expect to see a number of “emergency” business transactions. Our abilities to be effective in our negotiations may make a big difference for our clients. While this blog focuses on buying and selling oil and gas properties – it is applicable to all business transactions and negotiations.
This will not be another article about ethics and professionalism – no doubt you hear enough about that – and, of course, ethics and professionalism are important. But this article will focus on how to the Seller or Buyer of choice. And, to the surprise of some, that involves a lot of ethics and professionalism.
The Adrenaline Rush of a Big Sale
In virtually any significant sales transaction, emotions will run high. Significant amounts of money will soon change hands; one’s life work may be being liquidated; others, fear the tests of new management, new jobs, and, well, change in general. And, long hours of work will be put in on any complex sale. So remember, emotions can easily fray – and things may be said that we wish later had not been said.
You cannot change how others do business, but you can change how you do business. Here are some easy tips:
1. Stay rested and get exercise.
2. Remember to smile – remember, this is fun. This transaction may be the most challenging business transaction you will ever have. Enjoy it – learn from it.
3. Be prepared. This is a “big deal” – have the files open and organized; make your team members reasonably available. Try to avoid asking the same question or for the same document, twice.
4. Get your “team” together and get them to work as a team. Don’t have lawyers answering technical questions – don’t have engineers answering legal questions. Aside from the risk of being misperceived, there is a genuine risk that there will be a material misrepresentation.
5. Answer all telephone calls, texts, emails, letters, and faxes – promptly but not necessarily immediately. All of these non- face to face communication options are fraught with the peril of misunderstanding. Be thoughtful how you present yourself. Once stated, it cannot be retracted. However, silence is damning. If you do not return a call or email is it because you did not get it or because you are trying to avoid it? What is the message you intend to send to the other party?
6. Try to leave your ego at home. Some of the best sellers or buyers (think, great properties or plenty of cash) have poor communication skills. Be careful to differentiate between a jerk and a poor communicator.
7. Your word is your bond – especially on the little stuff. When you say you will mail something on Tuesday, then mail something on Tuesday (and shoot off an email confirming that it was placed in the mail, on Tuesday).
8. Be professional. Be on time to meetings; be prepared; be appropriately attired; bring your right team members. Don’t bring a knife to a gun fight – don’t bring a gun to a knife fight. Engineers like to talk to engineers; lawyers like to talk to lawyers.
9. Be ethical. Don’t lie – I recently had a lawyer tell me his client could not afford a payment amount. Problem is, there are funds in a court registry exceeding the amount of the payment amount demanded. That could have been so easily avoided – merely say that after a careful analysis, the amount demanded is viewed as being unreasonable (along with a brief, unemotional reason why).
10. Promise less – and deliver more. I will get this to you by the end of next week – then get it to them on Wednesday (and confirm by a quick telephone call that they got it).
11. Try to look at it from the other party’s point of view. Why do they want a particular indemnity clause? Ask them – and have a professional draft one acceptable to you that addresses their concerns (whether objectively valid or not).
12. And don’t be judgmental – not everyone is as smart and talented as you – but there are some surprisingly smart “dummies” out there.
13. Use state of the art electronics and photocopying equipment/services. But be flexible and aware that others may not use state of the art electronics and photocopying equipment/services.
14. Remember, not every deal is successful – and this is a small industry. Even though the transaction at hand does not work out, if you presented yourself as honest, courteous, and professional, you may have positioned yourself well for a future transaction.
Becoming the Seller/Buyer of Choice
So you did not “land the deal.” Why not send a note along with a box of Harry & David pears (not a bribe, mind you) to help the other side “remember you.” They will remember you as being:
· Good Natured
That in and of itself is not bad – and I suggest to you that those traits will cause you to be the first name on the seller’s/buyer’s list when the next transaction comes along.
by Jack M. Wilhelm
Edward Wilhelm and Jack Wilhelm provide assistance to buyers and sellers of oil and gas properties.
THE WILHELM LAW FIRM, 5524 Bee Caves Road, Suite B5, Austin, Texas 78746; (512) 236 8400 (phone); (512) 236 8404 (fax); www.wilhelmlaw.net
DISCLAIMER: The information on this site is not intended to and does not offer legal advice, legal recommendations or legal representation on any matter. You need to consult an attorney in person for legal advice regarding your individual situation.