(Originally posted in April, 2008)
Accelerating a contracting process usually benefits the side that is more prepared.
At least in terms of getting the best of the deal.
Think it through, if we know what we want, understand the risks, and are able to balance them against offsetting rewards or mitigation factors - what sense is there in delay?
On the other hand, when we don't know what we want (or, worse, a committee is trying to figure that out), don't know the risks, and need to think all of the offsets and mitigating factors through each time - delay is our friend.
The sad thing about this is that it is really the same terms being negotiated each time. The IACCM's top 10 most negotiated terms list remains about the same every year. As that is the case, your company has seen the most frequent challenges to your indemnification provision. You've heard all of the variables about Payment, and there are only so many business variables that surround most of your sales-side deals...
Face it, there really are only so many ways to intelligently re-draft the ownership of IP resulting from a services deal.
So why does increasing deal complexity bedevil most contracts organizations?
- Poor documentation - we don't know what the primary and all allowable fallbacks are because there is no really easy way to look them up.
- Poor metrics - how often does fallback #7 work? If you don't know, you aren't managing your terms, they are managing you.
- Poor communication - with the average tenure in the profession over 8 years, many contracts people see no need to talk to their peers. This can be disastrous in widely scattered companies where hallway conversations between contracts & sourcing staff are extremely rare.
- Pressure to accelerate in the absence of the above...
The last one is most damning. We've all fallen prey to the TAT metric inside contracts groups. "If we turn it faster, they will love us." This can be a fool's errand unless the tools (and more importantly the desire) exists to understand each deal individually, as well as how they fit into the portfolio of all deals.
Accelerating once you have 80%+ of the variables understood is easy. Until then, you aren't accelerating, you are cutting corners and calling it efficiency.
- Stephen Sopko