Who Are You? [Client Agreements Edition]

"When someone shows you who they are, believe them." - Maya Angelou

For the better part of thirty years, I have led negotiations for companies large and small. Over the last eighteen years, those negotiations have been almost exclusively between creative agencies and their clients and suppliers.

During the first read of an agreement draft, I start forming an opinion about who we are dealing with on the other side of the table. Are they reasonable or unreasonable? Do they "get it" (i.e., are they sophisticated about these kinds of transactions) or do they come off like amateurs? Do they seem interested in forming a mutually rewarding relationship or are they trying to squeeze their partners?

What is in an agreement draft (and what might be missing from it) says a lot about a potential client, what they are like as a business partner, and even what kind of challenges they have dealt with in the past.

Sometimes a negative first impression is merely a consequence of having the wrong people involved in the drafting and review of an agreement and I have learned not to assume the worst. As an old boss used to say, "Don't assume malice when mere ignorance will suffice."

But, if I present a first round of edits that addresses an agreement's weaknesses, and the client's negotiators double down on the unreasonable bits? Well, now we don't have to assume the worst. We know it.

And, in my experience, if a client is unreasonable during the negotiation of your agreement, there is a better than average chance that they are going to be unreasonable during the services relationship.

So, don't ignore the unreasonable terms. Press on them and pay attention to the client's response.

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In case you're wondering what unreasonable sounds like in a client agreement, have I got a deal for you! Here are some examples of paraphrased provisions I have found in client agreements and what impression they've conveyed to me:

AGREEMENT	TRANSLATION
Your undisputed invoices will be paid in 90 days.	Even though we are (probably) quite a bit bigger than you, we'd like for you to float us some cash.
Despite the fact that we are a Fortune 100 company and this is only a $5,000 project, we insist that you not accept any other work for the next two years from any company that might possibly be considered a competitor of ours.	We assume you're able to pay your rent by telling the landlord that we are a client.
Also, for this $10,000 project that involves no technology development or handling of sensitive data, we'll need you to secure $10MM worth of cyber security insurance and agree to conduct a $50,000 audit every year.	You're cool with losing a lot of money on this one, right?
We've included misspellings, references to terms that are not defined and missing or misnumbered sections, and some other assorted typos.	We didn't even bother to read this thing.
While this is a simple services agreement, you agree not to disparage us.	We have a history of being terrible and we'd rather folks not talk about it.
Even though we are going to be giving you a lot of materials to include in the project and really specific instructions about what we want you to do, you need to agree to indemnify us for anything that might happen (even if you did nothing wrong) and we will accept no responsibility for anything.	We're just really looking for a throat to choke when this eventually goes pear-shaped.
Everyone that works at your company, including junior employees that never touch our business, have to have a clean driving record, pass random drug tests, and must have never been accused of a crime. Oh, and we get to tell you to fire them whenever we feel like it.	Our HR would flip out if they saw this, but that's part of the fun of outsourcing!
While you're working for us, we own anything you create. Yes, even if it has nothing to do with our project or it existed before we knew each other. And, yes, even if we decided not to pay you.	We'll call this a "services agreement" because "hostile takeover" sounds...you know...hostile.
You agree to do extra work if we ask for it, change the project timeline when we feel like it, honor any new terms we add in, and follow all of our company policies and codes even if you have never seen them.	It's fun that we have spent time negotiating this agreement, but howsabout you just do whatever we tell you to do?
If we fire you, you agree to spend at least 30 days training one of your competitors to replace you. At no cost, of course.	When given the choice between our convenience and your existence, we shall take the former.