Ah, Independent Legal Advice (“ILA”) . That throw away line in many agreements where people sign saying they have had an opportunity to have it, but have chosen not to.
We recently had a great example of the right way to use ILA when we were retained to give ILA to a shareholder on a Shareholder’s Agreement that they had largely drafted on their own. Despite the fact that this shareholder had been the principal instructor to the corporation’s lawyer, and was intimately familiar with most of the terms of the agreement, the corporation’s lawyer still thought it would benefit all of the shareholders to get ILA – not just to waive it as I described in the first line of this Blog.
The shareholder was convinced that ILA would add value even if only to have a fresh set of eyes review the agreement. In our review, we offered more than that; considering various critical events from the shareholder’s individual perspective was very different than the perspective of corporate representative they had while preparing the agreement.
Getting independent legal advice is not cheap, but it is cheaper than being stuck with legal obligations you don’t understand and then have to retain a litigator to handle. If you are entering into an agreement of any significance (including potential future liabilities), you absolutely must have legal counsel review the agreement and confirm that your interests are protected (or that your unprotected interests are known to you). It’s that simple.