It is not radical to state that businesses whether local or international involve some sort of exchange; whether goods for goods, services for services or goods for services and vise-versa. A business whether sole proprietorship or otherwise for reason of expediency usually finds itself in need of a go between aka Agent to represent it in certain affairs.
Depending on the jurisdiction in which the Agency contract arose, the rules governing such relationships while often times sophisticated are fraught with uncertainties. For example, under American Law, the Agent’s authority to act on behalf of his Principal depends on whether the Principal has conferred on him express, implied or apparent authority and the extent to which the Principal is bound by the authorized or even unauthorized acts of his Agent depends on whether the Principal is disclosed or undisclosed. Issues such as ratification and disclaimers of the Agents’ act often arise and where the Agent has faithfully performed according to the Principal’s desires the burden shifts on the Principal to ensure that the Agent is adequately compensated. Such compensation is usually contained within the Agency contract and a defaulting Principal may be hailed into Court or the Agent may place a lien on goods or services within his care until the Principal fulfills his obligations.
International Business Transaction is that body of trade which encompasses more than one sovereign territory. An Agent in a developed jurisdiction in pursuit of compensation earned in a domestic transaction may have recourse to the Law, even though recovery is still not an easy matter. However, issues of recovery of compensation become exponentially exacerbated when the matter crosses international boundaries; in pursuit of his compensation, issues of litigation, discovery, enforcement of awards etc. become further exaggerated should the Agent be crazy enough to attempt such a recovery; most Agents often give up at this point and let the chips fall where they may; an example may serve to highlight the Agent’s dilemma:
An Agent’s (The Agent) services has been contracted by a firm (The Principal), the mandate/instructions is for The Agent to liaise with a manufacturer (The Manufacturer) of blades for the supply of blades to be used in the making of The Principal’s signature line of women’s shavers. The specifications for the blades and the packaging requirements are also contained in the Agency contract. The Agent contacts a Pakistani manufacturer of fine blades whose products seem up to specifications; he obtains further guarantees from The Manufacturer that delivery will be on time and to specification.
On late delivery by The Manufacturer, it is further discovered that a fair percentage of the blades are blunt and another fair percentage were curved. The Principal has rejected the blades and is refusing to compensate the Agent for his services; on the other hand, The Manufacturer is refusing to replace the rejected blades (payment has been made anyway) neither is he willing to reduce cost for late delivery, what is the Agent supposed to do?
In a domestic transaction wherein all parties reside within a single Sovereign Jurisdiction, then it is just a matter of going against The Manufacturer in a Court of Law to compel cure for the defect; however since the transaction involves parties in different sovereign jurisdictions, the Agent may have no other recourse to compel performance than to engage in an expensive and protracted battle in local and foreign courts depending on what the dispute resolution clause contained in the contract agreement is; the best an Agent whose Principal has defaulted could hope for is to have the dispute arbitrated by a competent arbitration panel previously stipulated to by the parties.
A second more acute issue in Agency relationships and one for which this write-up is more concerned involves an Agent engaged in an International Business Transaction whose services may become redundant after Principal and Manufacturer are put in touch with each other; an illustration may serve to clarify the Agent’s dilemma in such instances:
An Agent’s services has been contracted by a firm (The Principal) a local Oil Merchant; The Principal’s mandate/instructions simplicita is for The Agent to source a credible supplier of crude oil to be picked up by cargo ship at any safe world port. An Agency agreement is promptly entered into between The Agent and The Principal; reimbursement is predicated on the successful completion of the mandate.
In pursuit of the mandate, The Agent contacts a Libyan producer (The Producer) of crude oil and notifies him of The Principal’s readiness to enter into an output contract. The Agent enters an Agency Agreement with The Producer and thereafter places both parties in direct contact. After a while, The Principal notifies The Agent that negotiations have failed and that Agency remunerations are now mute. Thereafter Principal and Producer re-initiate negotiations and conclude the transaction without The Agent.
Of course you could call The Agent an idiot for not demanding upfront payment of Agency fees; you could berate him for not signing a Non-Compete/Non-Disclosure/Non-Circumvent (Non-CDCs) Agreement previous to placing the Principal and Producer in contact with each other, but remember that there are no limits to the ingenuity of dubious contractors wishing to save costs by cutting off the Agent’s fees, Non-CDC Agreements are often worth less than the paper they are written on unless the Agent is a big firm with enough resources to enforce its terms and that is even where it is aware of the Principal’s double dealing.
If The Agent is a sole proprietorship or a small start-up for example, The Principals might make payment of Agency fees contingent on the successful performance/conclusion of the contract and could thus repudiate the Agreement at the slightest infraction; furthermore, as you may have surmised, Agents come a dime a dozen, the smart Agent will usually act first and question later, thus placing himself at the mercy of parties who are usually in business to maximize profit and save costs; the issue thus reverts back to the initial query: how, considering the stated circumstances does an Agent guarantee payment of Agency fees for service rendered?
While there are no full proof methods of ensuring reimbursement after performance, the following steps are highly recommended:
1. Deal with Principals you trust or Reputable Firms Only
A Principal with whom the Agent has a previously established relationship is less likely to double deal; on the other hand a reputable firm will try to avoid the embarrassment of a weeping Agent at its doorsteps.
Another good way of ensuring payment of Agency fees is to avoid bringing the Principal and Producer in contact with each other; this is a complex dance and may quickly degenerate into loss of confidence in The Agent’s ability; The Agent must ensure that any exchange of documents between the Principal and The Producer must be funneled through him; he must ensure that such documents do not contain any reference to emails, contact addresses/persons, telephone numbers etc. this could be done by redacting and rescanning before re-forwarding; Conference calls and meetings must only be arranged on strict understanding that no exchange of contact information including business cards are permitted.
To ensure that parties do not lose confidence in the Agent, the Agent should ensure that both parties are informed ahead of time that they will not be put into contact with each other until Agency payments are made; such a clause could also be incorporated in the Agency contract.
3. Appoint a Paymaster
A paymaster is charged with all financial payments associated with the transaction, he ensures that escrowed monies are transferred to individuals and companies that are mentioned in the contract. An Attorney in good standing is seriously advised under these circumstances.
4. Non-Compete, Non-Disclosure, Non-Circumvent (Non-CDC)
As earlier stated these clauses in the Contractual Agreement are only relevant where the party seeking enforcement is buoyant enough to seek redress in any Court of Law the world over and even then, The Agent has to be aware/know when The Principal and or Producer as the case may be may have circumvented him; this is not an easy matter to detect, it is advisable that The Agent maintain an insider on both teams to update him on goings-on concerning the contract; in the absence of such an insider, The Agent may have to pay a private investigator to keep him abreast of what is going on, this is usually a time and money consuming undertaking, however, concerning Non-CDC Clauses, it is always better to have one than to not.
As young lawyers, you are told that the path to partnership depends on your ability to generate business. After your first couple of years of being a bottom-rung associate, you therefore need to start thinking about a strategy for marketing yourself. There will be the standard opportunities, of course - conference, bar events, and that sort of thing. The problem with these opportunities is that you are surrounded by your competition, and it can therefore be difficult to get the exposure to potential clients that you want. On top of that, how do you convince potential clients that they should hire you, a junior attorney, instead of someone more established and with more experience?
To be clear, you should take advantage of every marketing opportunity your firm is willing to support. However, you should also look for additional opportunities off the beaten track where you don’t have to fight for airtime. The good news is that there are plenty of marketing opportunities right under your nose. Granted, these aren’t marketing opportunities per se, but rather, an opportunity to demonstrate your professionalism, your intelligence, and your expertise in your industry or practice area.
Pro Bono Opportunities
Pro bono work is a great way for young lawyers to establish a presence and possibly meet people outside your normal circle. Your state or local bar association probably has several programs you can participate in, from helping the poor to writing wills for veterans. These programs make it easy for you to get involved. You’ll gain some experience in having primary responsibility for your client, and hopefully develop relationships with other lawyers that may refer you business in the future. Meanwhile, you’re putting your skills as a lawyer to good use in serving a great cause.
Everyone knows that lawyers work a lot of hours, especially grunt-level associates. It’s therefore understandable if you need a break from the law in your “off hours” (if there is such a thing). If you still want to give back to your community, the good news is that there are probably hundreds of volunteer opportunities within easy distance from your home or office. Whether making sandwiches for the homeless or visiting the elderly in nursing homes, you can form some fantastic long-term relationships. Volunteering is another way to increase your exposure that could lead to business in the future. And again, you’re giving something that is desperately needed - yourself.
Expand your social circle
After work, eating, sleeping, and volunteering, there are precious few hours left in your week. It’s important to rest and recharge, but how much of your free time is just wasted time? Are you really avoiding that social get-together to stay home and binge-watch The Office again? My standard excuse is, “but I won’t know anyone there.” Meeting new people is a great way to expand your network.
Just don’t be that guy who hands out his business card at barbeques.
Which is a great segway to my main and most important point - be a real person
A lot of ink is being spilled these days on the subject of authenticity: being authentic and building authentic relationships. I’m not sure what being “authentic” means beyond simply being a real person. People do business with people they like, and law is no different. If you approach everyone in your life as a potential client or source of business, chances are your business development efforts will yield diminishing returns. This is true even at formal marketing events, maybe especially so. Instead of constantly “selling” people, just focus on building friendships. Listen to their stories, share a joke, encourage their efforts, and offer help (legal or not) when you can. Over time, you’ll develop a network of friends that want to help you as opposed to constantly “prospecting” on the never-ending carousel of marketing events.
Maybe this advice is worth exactly what you’ve paid for it, but I ask you to consider this: even if this tactic doesn’t develop business like you hoped, you’ll have helped some pro-bono clients, volunteered your time in your community, and developed some deep and lasting friendships. What’s to lose?