Lawyers think about worst case scenarios. It’s what we’re paid to do. But regular folks—especially business people—are optimistic and generally believe things will work out.

Neither side is wrong. But both sides have their pros and cons which can lead to missed opportunities. A healthy balance between the two concepts is best. An optimistic realism.

Optimistic realism occurs when you are convinced there is a better way, yet remain fully aware of the steps required to obtain that better way.

Avoid contractual chaos

Many business owners approach business agreements very casually with overwhelming optimism. This is especially common when hiring employees. They ignore red flags. They assume the details will take care of themselves.

Friends, that rarely happens.

How work is to be done, when it is due, how success is measured, and how people are compensated are points of contention that will eventually arise. Unfortunately, most business owners focus solely on compensation. They then ignore other factors that impact success.

Choose to be different.

When you enter into a business agreement bring your optimism, but don’t be blinded by it. This requires that you:

• Ask the hard questions

• Get into the details

• Pay attention to the red flags

And do this in every area of your business. If you want to exact any meaningful change or improvement in business or life, this is essential.

As a lawyer, I’ve seen too many “gentlemen’s agreements” end up in chaos. This happens because both parties a) refused to be real about what it would take to get desired results and b) weren’t sure they were ready to do the work. This leaves everybody walking on eggshells. The relationship is filled with communication land mines.

Here are 3 practical tips to arm yourself with optimistic realism.

1. Investigate all parties attached to the agreement

Do your research. If you wouldn’t marry someone you don’t know, you shouldn’t enter into complex business arrangements with them either. The financial implications are generally just as profound. In partnerships, you can be held financially responsible for someone else’s mistakes.

2. Gain clarity on expectations

I’ve probably said it a hundred times. And I will continue to say it. It matters that much. Many of the court cases showdowns exist because someone was not clear about what they wanted. And then they got upset when they didn’t receive it. Speak up.

3. Don’t be manipulated

People who harness optimistic realism don’t think strong-arming folks into contracts will actually get them what they want. They know that value creation is key. A good contract makes the exchange clear. Be straight with folks. You’ll get results and respect.

Are there other ways optimistic realism can help you in business? Share your thoughts, questions, and comments below.

This article has been edited.

Temi Siyanbade is the principal attorney at The Law Office of Temi Siyanbade, a Houston based boutique law firm that provides legal services to help entrepreneurs and small business owners find direction, gain clarity, and increase profits. Her legal services include business formation, contract drafting and strategic planning. She received a B.A. in English from the University of Georgia and a JD from the University of Houston Law Center. Connect with @toslegal on Twitter.

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