When lawyer Merja Kohonen founded her own business a couple of years ago, the name of the company was obvious to her from the start. CLean Contract refers to lean management, a business philosophy which has been prevalent in several sectors for many years, but which has not reached the law firm business yet.
“A contract can be concluded in a much more efficient and lean way if you focus on the essentials. This means, for example, avoiding lengthy commenting and finetuning of the words. Instead you should find a level which is good enough in each individual case.”
This attitude towards contracts hales from Kohonens background. She has over 20 years of experience in international business law, as she has previously worked as a company lawyer at both Wärtsilä and Atria. At Wärtsilä she served all selling divisions and was later responsible for the legal support to the global sourcing organisation. At Atria she was responsible for the legal affairs of a listed company and served as a secretary of the Board of Directors as well as the management team.
With the mindset of an in-house counsel Kohonen can help her clients save time and money through effective contracting. According to Kohonen, from a business perspective, you should focus on the things that are relevant when drafting a contract.
“Legal issues are only a means of achieving business goals; they are not an end in themselves. A lawyer should not be an obstacle, but rather an integrated part of the business process. This means that lawyers should not only think of legal matters, but of business matters primarily,” she points out.
Many of Kohonen’s clients can be found in the industrial sector. However, she wishes that more Finnish export companies would understand the benefits of good, proactive contracting. This means, for example, that the liabilities of the selling party are limited.
“Too often, companies don’t understand how much good-quality contracts add to the value of the business. It’s definitely wiser to involve a lawyer already when making an agreement, rather than doing it when problems occur. It’s easier to prevent a fire beforehand than to extinguish the burning ruins. Most disputes are settled through negotiations, but the agreement defines your negotiation position.”
Kohonen also wants to point out that the quality of the contracts is of great importance for the value of a company. The risk levels of the contracts affect the company value, which can come as an unpleasant surprise, for example, when a company is about to be sold.