Lawyers Who “Get” the True Nature of Outsourcing

Last time I talked about two lawyers who “get” outsourcing deals as much more than a legal exercise to reduce costs, mitigate liability and avoid risks.

With today’s post I’ll follow up with some thoughts on three more, Jeanette Nyden, George Kimball and Jim Groton, and how they also understand the importance of using the legal team involved in an outsourcing deal as a critical adjunct to the collaboration process while solidifying the partnership between company and service provider. They not only “get” it they also really understand the importance and value of collaborative buy-in from the legal-team perspective when forging a Vested Outsourcing business agreement.

Jeanette, a Seattle business attorney and mediator, focuses most of her practice tirelessly educating others (her firm is J. Nyden and Company, wrote Negotiation Rules: A Practical Guide to Big Deal Negotiation. She also is a co-author—along with me, Jacqui Crawford and Katherine Kawamoto—of The Vested Outsourcing Manual, published this week by Palgrave Macmillan.

Her experience and scholarship on the art of negotiating effective business contracts is a vast and invaluable contribution to the Manual. A Vested agreement is after all a legal document and must hold together as such. She notes that the Vested deal is “more complex and interdependent than transactional deals and yet is less legally intertwined than equity partnerships and joint ventures.” Vested agreements therefore “are not easily developed simply by cutting and pasting from other contract templates.” She believes the transaction model “has passed its prime and no longer serves anyone—not the customer, not the consumer and not the supplier.”  Jeanette’s mantra for the contract process is, “Collaborate, don’t alienate.”

Jim Groton is an arbitrator, mediator, and dispute systems designer who agrees that incentives go hand-in-hand with innovation and collaboration. He is a retired partner of the law firm of Sutherland, Asbill & Brennan LLP, where he formerly led the Construction Practice Group and the Dispute Prevention and Resolution practice of that firm. He has long been an advocate for improving the efficiency of the construction industry, and a pioneer in the application of techniques for preventing and controlling disputes, both on construction projects and in other business relationships and transactions.

Jim says, “As a lawyer who has spent his life having to examine the seamy underbelly of failed business relationships,  I applaud Vested Outsourcing for teaching a process that will help the parties deal constructively with unexpected events and problems—a given in today’s business world.”

George Kimball, senior legal counsel for HP, came from Baker & McKenzie. While at Baker & McKenzie, George penned a wonderful legal guide, Outsourcing Agreements: A Practical Guide , a valuable and detailed resource on the ins and outs of outsourcing.

Good contracts motivate parties to perform through a reasonable equilibrium in the allocation of risks, responsibilities and incentives,” he says. “Performance yields benefits: savings and service for customers; margins, opportunities and references for suppliers.” He also notes that “weak governance is the single most common, avoidable error” that parties encounter in trying to manage the contract and the relationship.

George says Vested “offers mutual benefit, measures that benefit, and then builds pricing and allocates risk and responsibilities in ways that motivate both parties to achieve the common goal.”

These lawyers know their stuff and they know what outsourcing is all about—legally, collaboratively and practically. Kudo’s to these and to Ed Hansen and Oliver Kirchner (who I mentioned in last weeks blog) for helping drive the paradigm shift where contracts are a platform for creating business value and not legal weapons.

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