As law students, we are trained to identify the legal risks of a given scenario and then advise our clients of those risks. That is the essence of lawyering.
As a transaction lawyer, because we can recognize the potential for misconduct within a transaction, we have a fiduciary duty to protect our client’s interests in the transaction by structuring it in a way to optimally minimize such risks. Our three duties, then, are to:
Identify the nature and scope of any perceived risks that can disrupt the transaction.
Reduce the probability of loss (i.e., transaction costs, opportunity costs, out-of-pocket costs, or sunk costs) from those identifiable risks.
Deflect, to the extent most possible, the costs of inalienable risks.
Put another way, our goals are to protect our client’s interest (identify, reduce, deflect) & facilitate the completion of their desired transactional interest.
Source: Rick Daley, Real Estate Development Law, West Publishing (2011)