Great dogma of contract negotiation: Difference between revisions
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This might not matter if the subject matter did not need specialist expertise. But, as it is, it ''does''. The {{isdama}} is a tortured piece of legal technology, and that’s before the institutions have injected their idiosyncratic, paranoid and often senseless credit standards. Now, it’s an open point whether an {{isdama}} ''should'' still be so complicated<ref>In your humble correspondent’s view, the standards required by most institutions of their master trading agreements are absurd — this whole wiki is a testament to that.</ref> but the fact remains that it ''is''. And no [[management consultant]] has ever thought of simplifying the legal and credit content of the agreement before offshoring it to give the poor kids a chance. | This might not matter if the subject matter did not need specialist expertise. But, as it is, it ''does''. The {{isdama}} is a tortured piece of legal technology, and that’s before the institutions have injected their idiosyncratic, paranoid and often senseless credit standards. Now, it’s an open point whether an {{isdama}} ''should'' still be so complicated<ref>In your humble correspondent’s view, the standards required by most institutions of their master trading agreements are absurd — this whole wiki is a testament to that.</ref> but the fact remains that it ''is''. And no [[management consultant]] has ever thought of simplifying the legal and credit content of the agreement before offshoring it to give the poor kids a chance. | ||
Why? Because making that case requires subject matter expertise (legal and credit) that a management consultant does not have. Most lawyers and almost every credit officer you ever meet will swear blind that it really is a matter of life and death that we maintain that [[cross default]] and those complicated [[downgrade trigger]]s, and the [[management consultant]] doesn’t have the technical chops to gainsay such an assertion. | |||
So instead, the whole operation, replete with its tortured prose, over-engineered legal terms and fantastical credit experctations, is lifted and shifted from a high-cost jurisdiction (where at least the people concerned have a half-chance of understanding the Byzantine concepts they are expected to negotiate) to one where the poor kids have no chance. As a result, process managers must create [[playbook]]s and negotiation guidelines which the low-cost negotiators must follow as if colouring by numbers. If issues arise that are not covered in the [[playbook]] the negotiator must [[escalate]]. Due to the lack of skill [[escalation]] is a more frequent occurrence than previously; due to the remote location, it is more protracted. | |||
So, to recap: shifting the negotiation process from skilled (but expensive) negotiators in London and New York to less skilled [[negotiator]]s in [[low-cost jurisdiction]]s removes autonomy and increases the frequency and duration of [[horizontal escalation]]s. | |||
{{sa}} | |||
*[[Seven wastes of contract negotiation]] | |||
{{ref}} | |||