Before You Sign: Why Counsel Should Be in the Room

Two companies form a joint venture to pursue a development project neither could take on alone. One partner brings the capital and the financing relationships. The other brings the operating expertise and runs the day to day. In the optimism of the launch, the terms feel obvious, so the venture proceeds on a document that one side’s counsel prepared.

Two years later, the project is generating real value, and the partners are disagreeing about nearly everything that matters: who controls the major decisions, how profits get distributed before anyone recovers their capital, and what happens if one side wants to bring in new investors or walk away. The agreement either says nothing useful or resolves the question in favor of the partner who drafted it. By then, those terms govern what each owner can do with the capital and the years of effort they have put in.

We see this regularly. Joint ventures, subcontractor and teaming arrangements, investor side letters, and partnership documents get signed on whatever form the other side supplied. Such a document is never neutral. It was written to protect the party who prepared it, and the provisions that matter most, things like governance, the priority in which capital comes back, transfer rights, and the terms of an exit, are exactly the ones a busy principal tends to skim when the deal feels aligned and everyone is eager to move.

Having counsel review and negotiate the document at this level is not a formality. The point is to understand what you have actually agreed to, to surface the provisions that quietly shift control or economics to the other side, and to confirm that the structure on paper matches the deal you believe you are making. That might be a decision threshold that leaves a capital partner without any real voice, a distribution waterfall that delays the return of your investment, or a transfer restriction that locks you into a venture you no longer want to be in.

This is the work our fractional general counsel relationships are built for. We serve as the legal arm of your business on an ongoing basis, available to review and negotiate documents as opportunities arise, rather than meeting your agreements for the first time after a dispute has formed. For owners and investors moving on several deals a year, that means someone who knows your business is reading the terms before you commit to them. The cost of having counsel involved as deals come together is modest next to the capital and exposure that ride on the terms. The expensive version arrives later, when the document is fixed, the relationship has soured, and litigation is the only lever left.

If you are signing deal documents as a formality, trusting a counterparty whose interests run against your own, or committing significant capital on terms someone else drafted, reach out to schedule a call. We will talk through how a fractional general counsel relationship can put experienced counsel beside you on each transaction, before anything is signed.

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