Corrections or additions?
This article by Barbara Fox was prepared for the June 20, 2001 edition of U.S. 1
Newspaper. All rights reserved.
Speeding Contracts Through `Legal’
When the sales team sells a software contract but the
programmers don’t go to work until six or nine months later, who is
to blame? Fingers often point to nit-picking lawyers.
If a contract is delayed, it damages customer relations, postpones
revenue, and frustrates the commissioned sales people.
But one lawyer, Kurt Anderson, says that even though most
software
contracts need to be tailor made for each client, their negotiation
does not have to drag on for months and months. “There is a high
level of frustration when sales people have negotiated the business
terms of the deal it gets bogged down when they turn it over to the
lawyers or contract managers.”
Anderson, who is with Giordano, Halleran & Ciesla, presents a
GetContactx
seminar, “Why Do IT Sales/Business Development Consultants Fail,
and What to do About It?” on Wednesday, June 27, at 8 a.m. at
the Palmer Inn. Cost: $119. Call 609-844-9880.
Anderson has found nine ways to speed-up the sales cycle:
1. Understand what you are selling and what you are notselling. In other words, don’t give away the store. “If you sellthe intellectual property associated with consulting services, youcan’t use it again,” says Anderson. Maybe you were the consultantwho had the bright idea for “one click” sales that Amazonpatented. If you helped them develop that, and your contract did notexclude the intellectual property rights, you would not be able touse this idea again.Choose the licensing option, he urges, unless you are prepared to”erase the memories” of those who work on a project. Licensethe rights to use software or modifications. Or ask a higher price.2. Assess the risks . Identify what risks your companyis willing to take for a sales contract. A typical sticking pointis “termination for convenience,” the client’s right to callit quits. Meanwhile the consultant has made the commitment to gearup and has lost other business opportunities. Other potential problemsinvolve liabilities, warranties, indemnification, and non-solicitationclauses. “The sales people need to understand these issues. Ifa client mentions termination of the contract, the salesperson willmention a termination fee.”3. Allocate the risk management . Restrict the decisionmaking to as few people as possible. Ask who will make the decisionto permit a “termination for convenience” and who willcalculatethe fee. “Quicker decisions are made with fewer people,” saysAnderson.4. Develop template agreements . When you use your templateas the starting point for a contract, you can focus your attentionon specific deal breaker issues and develop fall-back positions. Tellyour salespeople, “If someone asks for X, here is our standardresponse.”5. Train salespeople on fundamental legal issues andbusinessissues that relate to what they sell. “Gone are the days whenthey can be nothing but relationship massagers,” he says.6. Train the legal team on sales issues: what they needto do to support the sales team and how to balance that by minimizingrisks. “Too often, the legal team doesn’t care,” saysAnderson,noting that Great Divide between sales people and legal people.”Legalpeople are trying to protect the company at all costs, but we needan integrated process here.”7. Get the legal team involved in preliminary serviceproposals. Then you might have better luck when you call your attorneywith a last minute question. “Commission and revenue deadlinesgreatly increase the pressure,” Anderson says, “and theasked-forturnaround time is generally 3.5 minutes on a 200-page proposal.8. Keep sales team involved in contracting process. Thesales people know the idiosyncrasies and priorities of the clients,says Anderson, and they need to be there during negotiations forintellectualproperty rights. They can ask the question, “Will we need tore-usethings from this project?”9. Do periodic sales process audits. Ask “did we getthe same requests over and over again and did we give on it everytime? If we did, maybe we should change our form of agreement andnot waste the time negotiating. If the standard is two times feesand we always get negotiated down, let’s buy more insurance, changethe template, and not waste the time.” Ask what deals got killedbecause of issues and what can be done about it? “Too often, thedead deal just lies there and no one looks at it again.”Anderson grew up in Irvington, New York, the son of medicalphysicist who did implant dosimetry at Sloan Kettering. He went toColgate, Class of 1985, and Rutgers/Camden Law School, and hepracticesin Monmouth County. His clients have been various software companies,including Comvault (in Oceanport), People3 (a Gartner Group affiliatethat does HR consulting in software), Vertec Corp. (atelecommunicationsservices provider in Murray Hill), and Synchronous Technologies (anapplication service provider for telecoms in Bethlehem, Pennsylvania).”It’s hard enough for a salesperson to get a foot in the door,and when you have a chance to take your shot, you need ammo,”says Anderson. “And it needs to be standard. I have seen differentservice level commitments sold for the same product. Then you haveto tell your service folks that the response time varies from fourhours to 36 hours. How do you manage a department like that?”— Barbara FoxTop Of PageCharitable GivingJasna Polana, the estate of someone quite wealthy, wouldseem an appropriate location to hold a charitable giving seminar.And sure enough, Catholic Charities thought theestate-turned-golf-clubwould be an ideal spot for its “Financial Survival Strategies”workshop set for Thursday, June 28, at 8 a.m. Those who attend canogle the grand staircase and enjoy breakfast in the sumptuousgreenhousewhile they hear pitches for such opportunities as “charitableremainder trusts” and “guaranteed income and plannedgiving.”Among the speakers will be Michael Goodman of J.H. Cohn, LLPon Lenox Drive; Richard Simkus of Simkus and Ventura, a divisionof CapTrust Financial Advisors on Main Street in Lawrenceville; andGeorge Reilly of MetLife Financial Services of the CarnegieCenter. For reservations call Catholic Charities, Diocese of Trenton,at 609-394-5181, ext. 153.The 88-year-old behavioral health care and social service agencyprovidescare to more than 100,000 people each year,offering services forphysicallyand sexually abused children, the elderly, battered women, peoplewho are homeless or hungry, girls and women experiencing crisispregnancies,the seriously mentally ill, people struggling with addictions toalcoholand other drugs, people suffering with AIDS or HIV infection, childrenin need of a family or home, and families, couples, and individualsin need of counseling.”Our goal is to heighten the awareness of opportunities that aredesigned to maximize one’s charitable contribution and offer a senseof personal security simultaneously,” says Reilly, financialservicesrepresentative at MetLife Financial Services and board member ofCatholicCharities. “Today’s investors can benefit greatly when they havethe tools needed to make informed decisions about charitable giving.Many are pleasantly surprised to see the personal benefits thatcharitable giving can offer.”Previous StoryNext StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
