Oct 14, 2017

The Real Cost of Not Doing Business

By Evan Schneyer •

When someone is messing with you in a business context—not paying you on time, making demands for things they are in no way entitled to, or other such shenanigans—you may fantasize about thrusting the contract you both signed in their face and snarling: “Listen you [not nice word here] – this piece of paper says that I’m right and you’re wrong, so get with the program or I’ll see you in court!”

Feels good, doesn’t it?

But wait…does it?

In reality, most of us are conflict-averse and would much rather get along than fight. After all, humans are social beings; much of life’s satisfaction comes from relating to our peers and feeling that we’re a part of the group. We are self-interested, true, but our selves exist within a social context, and we tend to understand our interests as at least partially intertwined. Ultimately, there are way more evolutionary incentives to stick together than to cut ties.

Fight to Win

So when the potential for confrontation looms in our professional lives, why is it so tempting to imagine launching ourselves into one of the most adversarial spaces we can think of—namely, a courtroom?

One reason is that although avoiding conflict is part and parcel of humans’ social nature, once you know a fight is inevitable, aggression is actually a good thing: you need it to win. We imagine that “lawyering up” will make us feel strong and protected, like we’re headed into battle flanked by the shock troops of a special warrior-intellectual caste. They’ve got our backs and are ready to throw down hard.

Win Some, Lose Some

But ask anyone who’s been through a long legal battle: it’s not all it’s cracked up to be. Even if you win, you will probably take some hits to your pocket book, busy schedule, and maybe even reputation. Most importantly, *it might just feel really bad. *

Crucially, that last one isn’t “just a feeling”—it’s an emotional state associated with the very real social costs of damaging a relationship. Calculating these costs is hard because it’s impossible to know what the value of future interactions would have been. But we do know that open hostility forecloses some opportunities down the line. And true to our pack-mentality, the loss doesn’t just affect a pair of individuals, but extends throughout our highly-networked lives. The person you drag into court today is probably not going to introduce you to their most reliable angel investor tomorrow.

Slow Your Roll

This is a great reason to pump the breaks before a fight becomes inevitable. If you don’t actually want to end up in court, don’t start blustering about getting lawyers involved in the hopes that this will intimidate the other side into “doing what’s right.” This might work, but it could also backfire since you’ve essentially told them to get ready for a fight. Once their hackles are up, it may be too late to dial down the adrenaline, and now you’re both embroiled in a costly, unpleasant battle neither of you really wanted.

So what’s to be done when you’d rather not fight, but you aren’t willing to put up with someone’s bad behavior indefinitely? Fortunately, aggression and passivity aren’t our only options; we don’t have to choose between raging out and rolling over. We can engage conflict head-on by encouraging people to take responsibility for their obligations on the basis that it helps maintain a relationship from which both sides benefit, and will continue to benefit in the future. People want to be liked, respected, and included, and this works to our advantage when we need to nudge our colleagues into doing the right thing. As social animals, we’ll do almost anything to avoid getting isolated from the pack.

Let’s Stay Together

The law is a tool that’s great for determining winners and losers, but not much else. Using it may help you get back what you lost in monetary terms, but pummeling people into submission all but guarantees that the story you’re writing together—as co-founders, business partners, or whatever it may be—comes abruptly to an end. Maybe that’s ok depending on the person you’re dealing with; but nine times out of ten if you’ve managed to keep things civil throughout, starting a new chapter together is easier than you think. And who knows, you may even end up happily ever after.

Written by Evan Schneyer
Co-Founder & CEO of Outlaw

More about Outlaw

Voted G2’s #1 Momentum Leader for contract management, Outlaw provides pioneering end-to-end contracting solutions for the fastest growing companies such as Intrado, BeyondPricing, and Democracy International. From dynamic template-based generation through in-app negotiation, lifecycle management and reporting, Outlaw automates and customizes contract workflows helping companies reach agreement faster. Outlaw has been recognized as a legal technology leader in 2020 by the National Law Journal.

In 2021, Outlaw joined Filevine’s legal tech platform to radically improve the future of legal work. Together, Filevine and Outlaw become the first and only end-to-end solution to dynamically link documents, contracts, and databases with their surrounding business processes, resulting in easier workflow customizations, instant automations, and better collaboration.

More information can be found at getoutlaw.com and filevine.com.

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