17 Jul Can We Fix the Dreaded ‘Expectations Gap’ Plaguing Commercial Real Estate Attorneys?
Everyone has experienced those moments of setting seemingly realistic expectations and then ultimately had forces outside of their personal control lead to disappointment. Maybe you planned a home renovation project and expected to have it completed in time for a party. But in reality, the timeline got delayed and there were countless confusing back-and-forth interactions with the contractor until the work was ultimately completed late. This gap between expectations and reality—and the frustration that ensues—is also a major problem in the professional world, and especially for attorneys in the commercial real estate industry.
This phenomenon, which we dub the “expectations gap,” creates unnecessary tension between colleagues, despite the fact that everyone is working toward the same business goals. In commercial real estate, the 90-day gap between letter of intent (LOI) and lease execution is often a major source of tension between attorneys their broker colleagues, frequently resulting in lawyers being seen as “deal killers.” Is the three-month time frame between letter of intent and executed lease purposefully caused by lawyers? Of course not. There are a number of factors at play including the complexities of legal work, the risks in doing that work quickly, and generalized tools not designed for leasing workflows.
Luckily, there are some simple ways that we can address the expectations gap, but before we explore those solutions, we must address the natural question: Why does this gap exist in the first place?
It all starts when the leasing team locks in a tenant with a signed LOI. From their perspective, all of the important business terms have been agreed to by both parties. The deal is as good as done. But drafting the lease takes weeks, even months, as internal and external stakeholders review the document and negotiate terms. In the brokers’ view, deals that were once cruising along hit a bottleneck in the legal department. The frustration these delays create isn’t just felt by the brokers: The organization as a whole loses out on collecting rent and tenants can’t occupy the space.
Attorneys feel the frustration too. Generally, they are hard-working professionals. Analytical and effective communicators, commercial real estate attorneys face an expectations gap right away in their careers. They expect to enter the working world after law school ready to add value to their new company. Instead, the reality is that they spend an inordinate amount of time tracking edits and reviewing leasing documents because of the general-purpose software at their disposal. It drives them crazy that they cannot meet the expectations set by their colleagues and customers, and that these people do not understand why their expectations are not reasonable. Attorneys want to be dealmakers but are set up to fail by broken processes and inadequate tools.
Commercial real estate attorneys are asked to create leases both quickly and accurately. But as anyone with a law degree knows speed and accuracy are often mutually-exclusive goals. Because even the smallest error has the potential to cause enormous legal and financial ramifications, every single word and detail in a legal document matters. A commercial lease has hundreds of interconnected terms and dependencies, meaning that adding a free rent provision can result in dozens of places throughout the hundred-page document needing to change as well. Because they are under a vast amount of pressure to create a perfect document, commercial real estate attorneys end up spending hours poring over these pages. Add in the fact that edits come from a variety of sources—endless email chains, conference calls, memos, redlines—and it’s easy to see why it takes so long to finalize a lease.
Instead of being lauded for their hard work and dedication, attorneys face upset colleagues, frustrated that the lease took so long to complete. But based on the information that brokers and other colleagues have, their expectation that leases should be done faster isn’t unrealistic. Brokers have access to specialized tools like customer relationship management (CRM) software to help them do their job more efficiently. If you asked them to do the same job with the kind of general-purpose tools that lawyers have to use for leasing, they would become highly inefficient.
It’s reasonable for the broker to assume the legal team within the same company also has access to the right kind of tools to do their job well. But that isn’t the case. Instead of tools designed with the legal team’s needs in mind, attorneys are stuck using regular email and traditional word processing software. These tools do not have the right capabilities to connect the dozens of interconnected terms, requiring lawyers to manually update each draft and review it for accuracy.
To bridge this divide, commercial real estate attorneys could and should better communicate the complexities of the work they do. Think of it like decorating a cake. If you ask two people to recreate a fully designed cake, but one is given multiple colors of frosting and decorating tools and the other is given plain frosting, food coloring and one knife, they will both likely be able to decorate the cake. But it will take the second person significantly more time and effort to complete the task because they don’t have specialized-tools at their disposal. The first person may assume that the second should be able to create a decorated cake as quickly.
We can combat the rampant expectations gap through effective communication and the implementation of the right tools and technology. In commercial real estate, it’s especially vital that the legal and leasing teams communicate openly regarding roles, responsibilities and limitations, as well as expectations around a deal and its timing. The sense of understanding will help to ease frustrations for all.
More importantly, commercial real estate organizations need to set up their legal team for success. While versatile software like word processors have their place in the business world, attorneys need technology that is designed specifically with their highly specialized workflows in mind.
Attorneys need help from their organizations to eliminate the expectations gap. The right tools will help lawyers get back to value-added work like creative thinking and complex problem solving — the type of impactful work that they went to law school to do in the first place.
Gabriel Safar is the CEO and co-founder of LeasePilot, a software platform that helps commercial real estate owners draft and execute leases radically faster by using structured data to enable smart, context-aware document automation.