INSIDE:European Briefings

June 2011

Risk Management—International Background Checks—Business in Ireland—Request for Proposal—M&A in Russia—Lending in Sub-Saharan Africa—Dodd-Frank

Avoiding the Jungle:

L I MI T I N

G E X P O

S U R E F OR D

R U GS M

A DE I N

CH

I NA

ACC Docket 20 June 2011

HEARSAY

Working a deal with an

experienced business

partner can be a well-

choreographed dance

bringing professional satisfaction to

each side and beneficial business deals

to the company. Knowing when to lead

and when to defer during negotiations

is sublime. Of course, we all know the

other side of the game. What happens

if your business partner is less than

ideal, escalating every time they hear

“no” or are asked for additional infor-

mation? What can you do about it?

First, ask, “What can I do to be a

better legal partner?” The more value

you can bring to the relationship, the

more likely it is that your business

partner will respect your views and

listen to your advice. For example, do

you understand your business? Do

you understand the pressures your

business partner is subject to? Do you

support your business partner during

meetings? Do you meet before a deal

to discuss and agree upon objectives?

This might be just another deal adding

to your already overloaded workday,

but to your business partner, it might

be a sale that saves his job or the

company’s quarterly financials. Under-

standing the importance of the deal

and knowing the business background

will help instill confidence in your

business partner.

If you can fairly say that you have

covered the preceding, what have you

done to educate your business part-

ners? If they are inexperienced, have

you discussed what qualifies as a legal

or business decision and when deci-

sions belong to another department?

A license grant, indemnifications, and

reps and warranties fall under legal.

Pricing and distribution fall under

business. What about deviations from

standard company policy? Are other

departments required to approve?

What will your CFO say when you

learn that business has promised net

75 payment terms or provisions that

affect revenue recognition? Identify-

ing these areas of responsibility up

front can provide clarity in how you

work together.

Continuing on the educational path,

have you established template agree-

ments with rules of use, explaining

the need for certain key language?

Have you discussed how and when

certain pain points are best presented

to the other side, or at what point legal

should be brought into a deal? Do you

attend staff meetings for the technical

and sales groups you support? Have

you presented training modules at staff

meetings to discuss how to work ef-

fectively with legal?

As a department, have you identi-

fied the individuals in legal who are

responsible to support certain agree-

ments and groups? Have you prepared

an internal business term sheet sum-

marizing the business goals of the pro-

posed engagement (e.g., deliverables,

properties created, ownership, main-

tenance and support, and the business

motivations of each side)?

After all, as in-house counsel, you

support the business units. To bring a

business partner over to your side of

thinking, you need to be patient. You

also need to be honest about why the

relationship is not working. Have you

become a roadblock — a black hole into

which work disappears forever? If so,

is it possible to off-load

some of your work? Are

there template agreements

that can be executed by

the business group unal-

tered under certain condi-

tions? Can you promise

24-hour turnaround on a

simple task, such as NDA

requests, as a means of gaining trust?

If you are assigned to support a group

that is highly technical, but not much

interested in the business side, is it pos-

sible to identify one person in the group

to funnel work through? Can each side

be held accountable for performance?

At the end of each business meeting,

do you identify open items and whose

job it is to close out each task? Can you

clearly identify the business owner of

each deal or name the executive sponsor

watching that the deal gets completed

properly? Any time you can encourage

business ownership while holding up

the legal side of the equation, you are

heading down the right path.

So, do these ideas always work?

No. But they work sometimes. Of

course, if all else fails, you can take

a very long walk and clear your head

before coming back to work. After

all, who among us couldn’t use a bit

more exercise?∑

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Developing Effective Relationships with Business PartnersBY FRANK FLETCHER

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FRANK FLETCHER is general counsel for Nero AG headquartered in Karlsbad, Germany with subsidiaries in Hangzhou, China; Yokohama, Japan; and Glendale, Calif., where he usually can be found. Fletcher can be contacted at ffletcher@nero.com.