Using Environmental Experts in Commercial Negotiations
Paul Jacobi & Eric Jacobi
Too often we only think of employing environmental experts in an adversarial context. In truth, battles between experts rarely assist in advancing negotiations and often become the issue that unnecessarily kills deals.
We suggest a change in strategy. Utilize your experts earlier in the negotiating process, before the process becomes adversarial. How do we do this?
THE RIGHT CONSULTANT
1) Select the right consultant. First, retain one who is proficient in the required field of expertise (for example, remediation strategy, hazardous waste disposal or regulatory familiarity). Second, the environmental consultant should be someone who looks for solutions. Third, the consultant should not have a reputation as a hired gun who would rather “win” than facilitate the completion of the deal.
DEFINE THE BIG ISSUE
2) If there is a critical issue which may significantly affect the deal, identify it and define it from a technical perspective as soon as possible. Hoping it will go away is rarely a viable solution.
DOES THE LAW APPLY TO YOU?
3) If the outstanding issue involves the potential applicability of a state or federal statute, try to resolve any ambiguity prior to the commencement of negotiations. Unknowns may result in a huge expenditure of time and money as counsel tries to protect its clients from uncertainty through contract drafting.
REASONABLY QUANTIFY COSTS
4) Similarly, if the uncertainty involves issues pertaining to the likely cost of investigation/remediation, obtaining a reasonable cost estimate may help the parties and lenders narrow the range of anticipated costs.
In summary, consider utilizing environmental experts earlier in the transaction process. It may save time and money. Furthermore, if there is a “deal breaking issue”, the earlier the parties discuss it, the less time is wasted.