Installment 3: In Contracts, As In Life, Timing is Everything.

Three comedy rules that also apply to contracts.

Before and even during my corporate legal career, I dabbled in comedy writing and performing.

I did a bit of stand up. I wrote comedy sketches for corporate functions (a real dream gig for any aspiring comedian). I performed musical comedy for a classic rock station morning show in Portland.

Through trial and error, I came to learn and observe – or at least endeavor to observe - a few comedy rules:

  • Timing is everything. You have to know the right time to address a subject through comedy. Too soon to address a public scandal? Too late to bust out a Brady Bunch reference?

  • Know your audience. Playing a room full of insurance professionals? (Yes, I did that.) You might want to cultivate some solid premium/deductible jokes.

  • Hold for the reaction. Deliver that punchline and hold for effect. Don’t step on your laughs.

As I made the natural career progression from amateur comedian to professional corporate attorney, I learned that those three rules also applied to my work in drafting and negotiating service contracts.

Timing is Everything

A service contract needs to be negotiated sufficiently in advance of the start of services to allow for thorough and thoughtful review of the deal.

Waiting too late can cause a number of headaches. As the client, you might lose leverage with a vendor because the project timeline does not allow time to start over with a new party. If the deal falls apart, a client may end up shelling out dollars to the vendor for work that was started during the negotiation…or the vendor may end up doing work that is not compensated because the deal was never signed.

Know Your Audience

While your contract might be with a corporate entity, remember that you are negotiating with humans. They might be Marketing Humans, Finance Humans, Procurement Humans and/or Legal Humans, but they are totally humans.

It is important to develop an understanding of what is important to them as professionals. This will help shape what you ask for and, importantly, how you ask for it.

For example, you might learn that the Procurement Humans are evaluated and incentivized based on their ability to secure Net 60 payment terms from vendors. So, you may want to give on the Net 60 as long as you get assurance that you can pre-bill to cover out-of-pocket expenses.

Hold for the Reaction

As a comedian does not want to step on laughs, a negotiator does not want to step on the counterparty’s reaction.

While it is important to anticipate how the other side might react to your agreement requests, you don’t want to react for them.

If an issue is important to you, find the right way to raise it and then let the other side react. You might get a yes. You might get a no. Or you might get an acceptable compromise.

Regardless of the response, if your request is framed reasonably you will undoubtedly get a reaction that teaches you something about the other party and what they value. And sometimes that information will prove more important than getting the reaction you wanted.

Any questions? Feel free to reach out.

I’m here all week.

And don’t forget to tip your waiter.

Broad Cove Advisors LLC (“BCA”) is a consulting firm that provides strategic advice to brands, agencies and other service suppliers. Among the services that BCA offers is advice on negotiation strategies designed to improve transparency, collaboration and service outcomes. BCA is not a law firm and does not provide legal advice.