Just get the deal done!

try harderRonald Reagan once declared that the most terrifying words in the English language were: I’m from the Government, and I’m here to help. IP Draughts has a candidate for the most frustrating words that a contract negotiator will hear: just get the deal done.

Typically these words are uttered by a senior executive who has no direct involvement in the negotiations, and who is impatient for an agreement to be signed.  They may be passed down through several layers of management, like Chinese whispers, until they reach the poor, bloody infantry who are trying to ensure that the contract terms are appropriate for the organisation.

sopOften, it is not clear what this message means. IP Draughts would like to suggest that companies implement a Standard Operating Procedure (SOP) for Pressurising Negotiators. This will ensure that senior executives and contract negotiators have a clear understanding of their roles and responsibilities when pressure of this kind is applied.

Under the SOP, senior executives would be able to choose which of several messages to pass down to the negotiators.  For instance, they might include the following alternatives, each of which is followed by an explanation of what the instruction really means.

  1. Just get the deal done (my decision) – A1.” I have carefully considered the outstanding points in the negotiations and, based on my greater knowledge of the company’s commercial priorities, I have decided to concede all of those outstanding points in order to get the deal done in time for [the end of a financial reporting period] [the office golf outing]. Please just accept the terms on offer and get the agreement signed.
  2. Just get the deal done (my decision) – A2.” I have carefully considered the outstanding points in the negotiations and, based on my greater knowledge of the company’s commercial priorities, I have decided we can probably concede all of those outstanding points in order to get the deal done in time for [the end of a financial reporting period] [the office golf outing]. However, there are still a few [days] [hours] [minutes] to go before that deadline, and I would like you to keep negotiating as hard as you can right up to that deadline and [concede] [come back to me for a final decision on conceding] when there is no time left for further discussion.
  3. Just get the deal done (my decision) – A3.” I have no interest in the contract terms, and no real understanding of the risks involved in accepting those terms, but I have decided to concede all of those outstanding points in order to get the deal done in time for [the end of a financial reporting period] [the office golf outing]. Please just accept the terms on offer and get the agreement signed.
  4. Just get the deal done (I’m not responsible) – B1.”  I have no interest in the contract terms, and no real understanding of the risks involved in accepting those terms, but I am frustrated that the agreement is taking longer to negotiate than I would like. I hope that my instruction to get the deal done will somehow make the negotiators work harder to get the deal done. At the same time, please note that I haven’t instructed you to concede important points, just told you to hurry up and get the deal done: you are responsible for deciding what terms to accept in the contract, and I will blame you if the terms are not appropriate.”
  5. Just get the deal done (I’m not responsible) – B2.” I have no interest in the contract terms, and no real understanding of the risks involved in accepting those terms, but I am frustrated that the agreement is taking longer to negotiate than I would like. My interest is purely in the getting on with the project after the agreement is signed. I hope that my instruction to get the deal done will somehow make the negotiators work harder to get the deal done. I haven’t given any thought to who is responsible if my pressure results in a sub-optimal deal, nor am I really sure who takes the final decision on accepting contract terms.  I will probably blame you and/or deny responsibility if problems emerge after the contract is signed.
  6. Just get the deal done (I will support you) – B3.” I am frustrated by how long the negotiations are taking, and I felt it was important that you should be aware of my perspective as a senior member of the management team. My advice is that the parties should move promptly to a conclusion. However, I do not wish to interfere with the negotiations and I  trust you to proceed in the best way for our organisation. I will support you fully if the negotiations stretch out for a longer period, as I know you are doing your best for the organisation. Equally, if you decide to concede points in light of my advice, and in future the company suffers from these concessions, I will support you in that decision.

Have we missed any of the most likely alternative meanings? What is your experience of giving, or receiving, an instruction to get the deal done?

 

6 Comments

Filed under Commercial negotiation

6 responses to “Just get the deal done!

  1. I’m getting a strong sense of Déjà vu

  2. There is another possibility: “Spend less time on legal details like the venue for litigation, and pay more attention to the commercial terms so that I don’t inadvertently sign a stupid business deal”.

    • Interesting one. Just focus on the commercial terms and stop debating legal stuff. Who then takes responsibility if there is litigation in the Ruritanian courts which is predictably a terrible choice for the organisation?

      • Which leads me to my contribution (and haven’t I heard this, not always out loud, many times before!): “My only interest in this deal is to book the revenue this quarter so it will hit my [bonus][commission] and satisfy my quota. I realize that things might go wrong later, but these difficulties will probably affect Operations and not Sales, which is a different budget, and by then I’ll probably be long gone. So cave on any open issues that don’t affect revenue booking (worry about revenue recognition if you must, though it doesn’t really affect my interest) and just get the deal done.”

      • If a deal turns out to have been commercially unwise, there will be egg on the CEO’s face — assuming he or she is still around. Usually, CEOs do respect a lawyer’s ability to develop and to analyze a probability tree of what might eventuate, so it’s natural for a CEO to ask a lawyer to apply that thought process to the commercial aspects of the deal.

        Besides, an in-house lawyer may aspire to become CEO and therefore may be quite willing to provide commercial advice!

        My guess is that for every contract that does reach litigation in Ruritania or wherever, there are at least 25 contracts where the CEO of one party regrets doing the deal but litigation never arises. And even when litigation does arise, the fact that it’s in a favorable or inexpensive jurisdiction instead of Ruritania isn’t likely to make the CEO feel any better.

  3. Brilliant. Now all that remains is to get Powers That Be to accept the SOP.

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