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Great dogma of contract negotiation: Difference between revisions
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{{a|negotiation|}}Once upon a time an {{isdama}} was a new and dangerous thing, and one would drop twenty or thirty grand with the [[partner|finest finance lawyer money]] could by to make sure one’s goolies were safe. It was a wonderful period of discovery for we young [[associate]]s, trying to figure out what on earth {{isdaprov|Automatic Early Termination}} even meant, but charging some finance director £350 an hour while we found out. | {{a|negotiation|}}Once upon a time an {{isdama}} was a new and dangerous thing, and one would drop twenty or thirty grand with the [[partner|finest finance lawyer money]] could by to make sure one’s goolies were safe. It was a wonderful period of discovery for we young [[associate]]s, trying to figure out what on earth {{isdaprov|Automatic Early Termination}} even meant, but charging some finance director £350 an hour while we found out. | ||
Before long, {{isdama}}s were common, and their [[negotiation]] within financial service firms had been quite the cottage industry. Any good-sized institution will have literally hundreds of people devoted to producing these beasts: in [[onboarding]], [[AML]], [[credit]] sanctioning, [[netting]] and [[negotiator|negiotiating]] {{isdama}}s and like-minded [[master trading agreement]]s. | Before long, {{isdama}}s were common, and their [[negotiation]] within financial service firms had been quite the cottage industry. Any good-sized institution will have literally hundreds of people devoted to producing these beasts: in [[onboarding]], [[AML]], [[credit]] sanctioning, [[netting]] and [[negotiator|negiotiating]] {{isdama}}s and like-minded [[master trading agreement]]s. | ||
[[Management consultant]]s and [[COO]]s are good at spotting large aggregated {{wasteprov| | [[Management consultant]]s and [[COO]]s are good at spotting large aggregated {{wasteprov|cost}}s in an organisation and the contract negotiation process sticks out like a butcher at a chickpea curry stall. There is not an investment bank in town who hasn’t taken a chainsaw to its document negotiation operation — most many times over the last 15 years — and yet contract negotiation remains one of the massive sinkholes in modern finance. The process gets more bogged down, more frustrating, and more expensive. | ||
Ask me why. Go on, ask me why. | Ask me why. Go on, ask me why. | ||
And all because the management consultants don’t observe basic principles of their own discipline. | And all because the management consultants don’t observe basic principles of their own discipline. That is why. | ||
They diagnosed high personnel and unit costs in producing what were (by now) standard form customer agreements. Answer: to [[Downgrading - waste article|replace]] the personnel operating the process and negotiating the agreements with cheaper personnel, in [[low-cost jurisdiction]]s. | |||
[[Low-cost jurisdiction]] implies that, [[all other things being equal]], the quality of the personnel stays the same: just the unit cost that is cheaper. No-one commissioned any serious research on that topic before reaching that conclusion — it was taken as read — and it just isn’t true.<ref>While it is true that neither have I, I can at least point to anecdotal evidence and the basic rules of supply and demand.</ref> ''If you pay peanuts you get monkeys''. | |||
There is an old truism, however: you get what you pay for. Arbitrage opportunities do not last long in any buoyant market, as any banker will tell you. | |||