14 hard-learned truths about contract negotiations by Ron Bell
In an increasingly divided world there is one thing we can all agree on: most LinkedIn content is terrible.
But every once in a while I find something on LinkedIn that is excellent. Just superb.
And then my zoom meeting begins or I receive a text that I need to reply to … and that outstanding post is gone forever, like a leaf floating by in a river.
When I read Ron Bell’s 14 Hard-learned Truths About Contract Negotiations, I dove headfirst into that river to pull them out. I could not let this collection of wisdom float by.
Now I'm sharing them with you.
I don’t typically re-post someone else’s work verbatim but I am today (with permission from Ron) because I find his advice that good.
Ron Bell learned these negotiating truths during senior legal roles at Yahoo and Apple. He began his career at a law firm, after graduating from University of Chicago Law School. Today, Ron is the Chief Legal Officer at Collective Health, a venture-back SaaS platform that helps small businesses administer health benefits to employees.
If I had to pick a favorite from among Ron’s lessons it might be this one: “The length of a contract seldom correlates to its clarity on key issues.” It reminds me of the quote by Blaise Pascal, “I didn't have time to write you a short letter, so I wrote you a long one.”
I hope you to turn to Ron’s truths during your next negotiation … and I hope they help you get your deal done.
14 hard-learned truths about contract negotiation
by Ron Bell
☑ Contract negotiation is more than a legal process; it's also about getting a relationship started on the right foot by problem solving and forging trust between the parties.
☑ If you don't know why you want the deal, what you hope to get from the deal, and what your biggest risks are from the deal, it’s sheer luck if you get these things.
☑ Taking time to consider how you can meet the other side's reasonable needs and drive a mutually successful agreement is less expensive than litigation.
☑ If the draft you sent was reasonable, the skillfulness and confidence of opposing counsel are inversely proportional to the density of their contract markup.
☑ Absent a gross imbalance in power between the parties, the more aggressive the negotiator, the more they create resistance and the less likely they are to get what they want.
☑ What goes up, must come down. But if your company muscles its way through negotiations, expect no flexibility when you need it later.
☑ The length of a contract seldom correlates to its clarity on key issues.
☑ Business points a client wants to breeze past in negotiations because "our strategic interests are aligned" signal that such interests are not aligned.
☑ Indemnification, limitations of liability, intellectual property, and representations and warranties are "legal issues" *only* until the board asks an executive why the company is so exposed in litigation.
☑ Who, what, where, when, why, why not, and what then are questions to ask about everything in an agreement.
☑ If the other side wants to leave something vague or table it for discussion after the deal closes, they need and will use that ambiguity.
☑ Time kills all deals. If you take too long to finish negotiating, parties lose interest; if you move too fast, parties lose their shirts.
☑ When one side *needs* a deal more than the other side does, the needy side usually gets fleeced.
☑ Complex deals close when both negotiating teams are so exhausted that they align in a common interest to make the deal happen.
