9 P.M. PST, November 6, 2016
Contact: Leila Banijamali
San Francisco, California | November 6, 2016
Enterprise deals are HARD
A quick word on enterprise deals…they are HARD. Since Bedrock’s launch just 6 years ago, I have successfully negotiated hundreds of tech licensing deals (mainly SaaS) on behalf of the firm’s clients with enterprise companies. I negotiated licensing deals with Disney, Google, GE, Johnson & Johnson, LinkedIn, and many more. I have led deals where enterprise companies on the other side insisted on using a business procurement person to negotiate with me and saved their lawyers for behind-the-scenes work, which is not uncommon but can really slow things down…sometimes even by a matter of months. In some of those negotiations, my business procurement contact would be replaced several times during the course of the negotiation and, each time, we would essentially start the negotiation from the beginning. Patience and managing expectations are hallmarks in these situations.
On the other side of the spectrum, I have experienced lawyers who are active, diligent, responsive, and cooperative – those deals close quickly. Each deal has its own peculiar circumstances and complexities that we work hard to uncover and address as efficiently as possible. After hundreds of enterprise transactions and negotiating with more lawyers than I can remember, it’s hard not to develop a keen sense for the elements of a successful deal…and a great lawyer to close it.
Priority # 1 (and 2 and 3 and 4 and 5) = Close Deals
Some executives who believe that their products and contracts close deals are wrong. Investing in products and contracts alone will not yield higher annually recurring revenue (ARR). Experienced executives at companies that are churning even just 5+ enterprise deals each month know better. Of course, it’s important to have a reasonable agreement and solid product. But obtaining commitments from all sides means discovering agreements both externally (with customers) and internally with: lawyers, salespeople, technical teams, and corporate executives. People, not technology, are responsible for starting (and stopping) negotiations. The importance of front-line negotiators (lawyers and business teams) should not be overlooked. This isn’t about over-lawyerign documentation, it’s about strategically and thoughtfully bring the parties closer to agreement.
Top Licensing Lawyers are Scrupulous, Responsive, and Astute
Contract negotiation requires scrupulousness: an unusual attention to detail. In house counsel at enterprise companies typically require their business procurement teams to check off a series of boxes in every negotiation. The actual licensing agreement is a single (albeit critical) part of that list. Other documents may include: security documentation, service level agreements, business continuity plans, support and maintenance policies, business associate agreements, non-disclosure agreements, and so on. Experienced tech licensing lawyers will anticipate discussing and addressing each of these documents as the negotiation progresses, offering practical approaches to satisfy regulatory and policy requirements on both sides in a wide range of industries. Top licensing lawyers selectively craft and tweak legal text. These lawyers will even take an active role in assessing the enterprise target’s legal needs at the outset so that the client is prepared to respond accordingly.
Non-responsiveness to clients has been one of the biggest complaint that clients file against lawyers with the State Bar of California. That’s not acceptable. Bedrock was built on the premise that clients deserve responsive support in order to be successful. We structure each enterprise deal by prioritizing response and turnaround times on all negotiated/redlined documents. Clients will get a response from us, even on evenings and weekends. Period.
It goes without saying that knowledge of legal nuances is critical for effective client representation. Being astute is about listening to the other side and strategically crafting solutions that work and are profitable. Bedrock’s lawyers serve clients as an extension of their teams in order to develop overall IP protection and licensing strategies, which require a deep understanding of the client’s products and competition, visiting client offices regularly, and participating in board meetings and product development discussions upon request.
Subscription Billing is King
All in house lawyers are concerned about legal outsourcing fees. I remember reading a recent study by Thomson Reuters which concluded that in house lawyers are cutting back on outside legal fees, however possible, to satisfy investor expectation and internal board pressures to increase the bottom line. Big firms that have traditionally assumed the lion’s share of work from enterprise companies will, in turn, be forced to rethink their excessive hourly billing operational infrastructures. The future of legal services must be aligned with the way that clients do business: smarter, efficiently, and tech-driven. The enterprise move from high-cost downloadable software to subscription-based cloud technologies has ushered in a new demand from all support personnel, including lawyers.
Bedrock has developed predictable fixed-fee subscription billing to support all clients in enterprise technology negotiations. After our initial engagement by a client, we spend the first few weeks becoming intimately familiar with that client’s particular technology, needs, and short/long-term goals. We then collaboratively build out a predictable monthly billing model for unlimited negotiations and counseling. The commitment is month-to-month and the fee can be renegotiated for subsequent months at any time, if needed. Bedrock modeled its subscription fee plan to better align with how our clients do business. We care about every one of our client’s deals, no matter the size of the transaction.