Negotiating contracts with vendors, or anyone else, is a challenging but important part of legal marketing. On July 18, Kisme Williams and Julia Bennett, both of Venable, spoke to the LMA Mid-Atlantic Future Leaders SIG about their vendor negotiation success stories and shared tips for negotiating contracts.
The Case Study
When Williams and Bennett joined Venable, it fell to them to execute exhibit space at an annual industry trade show. The relationship with the vendor in this case was already well-established. However, that first year, it became clear that the firm wasn’t provided its full exhibit space, and the vendor did not fulfill all of the deliverables in the contract. At the end of the conference, Venable had only about 30 leads, and they were frustrated. Something needed to change.
“Contracts can be amended,” said Williams. “Just because things have been a certain way for years doesn’t mean it has to stay that way.”
It wasn’t just going to be a vendor negotiation though. They had to discuss the situation with internal stakeholders to ensure they were negotiating with the power of the lawyers behind them. Fortunately, the attorneys believed in them and supported them – and were willing to walk away from the vendor relationship if necessary.
Within two years, Venable became the exclusive regulatory and legal partner for the trade show and was able to schedule meetings before the show, which meant they knew exactly who to send to maximize ROI. Last year, the revenue they received from being at the show was three times their investment.
Bennett and Williams walked attendees through the ways in which they were able to achieve a successful negotiation. One important factor was that they knew what they could reasonably request.
“It’s important to know where the vendor makes their money and where there’s some give and take,” Bennett said. “I have not met a vendor who wasn’t willing to talk about their bottom line.”
Negotiation Best Practices
Before you even sit down to negotiate with a vendor, Williams said, “[you] have to know the bottom line. What’s our angle, and what are we hoping to get?”
Know your budget and gain leadership approval before you start negotiating. Set metrics so that you can later judge whether you’re getting the proper “bang for your buck.” If you go forward with a contract, be sure that you’re getting everything you were promised out of the relationship.
You need to know all the available possibilities and what works best for your firm. You need the backing of your attorneys as well as a clear sense of what you need to accomplish the negotiation. Know your goals and what outcomes will help you achieve them. Be clear on the “why” aspect, as each firm’s goals and culture differs.
Get a list of benefits from each opportunity to help determine which are the most beneficial and attainable. Don’t rush the process for fear of missing out.
“You wouldn’t buy the first shiny car on the lot,” said Williams, “so you wouldn’t sign the first contract you’re given.” Always go back to the “why” to determine whether it’s worth it.
When negotiating, expect to be uncomfortable, but know your value. Be prepared for some back-and-forth discussion. When you know what the end game is, you can work towards finding common ground.
Always write things down. Everyone should be completely clear on what the deliverables are.
Keep in mind that when you’re soliciting services of a vendor, you are the buyer. “You are the person who holds the purse strings,” Bennett said. “It behooves them to get something from you. Don’t let discomfort or fear hold you back from getting something you want.”
As the relationship progresses, continually collect feedback from your colleagues, the attorneys and the vendor.
If you need to, ask for help. “It’s better to pull in folks above you sooner rather than later if necessary instead of having the wrong thing at the end,” said Bennett.
Remember that every negotiation is slightly different, and that “negotiation is not a bad word,” said Williams. “It’s a two-way street. You have to enter into any new negotiation with a new vendor with an open and positive mindset. We’re all in the business to do business.”
Building and Maintaining Vendor Relationships
“Contracts preserve relationships,” Williams said. “They don’t destroy them.”
When building a relationship with a vendor, it’s important to understand both your “why” and your vendor’s “why.” Ask about their goals. Take time to understand their business and position. Find out whether there are ways you can offer value to the vendor.
Remember that the process of building relationships takes time, and you can’t rush it. Keeping the lines of communication open is crucial. Remain in contact with the vendor throughout the life of the contract.
Remember that nothing is cookie cutter. Every negotiation is different. Take your time and be sure everyone is on the same page. Be creative in asking for things that could be added that don’t affect the vendor’s bottom line. Consistently reevaluate your vendor relationships to be sure you are both getting what you need. Finally, know what you need to get out of the relationship for it to be successful, and work towards achieving that goal.
By Rachel Patterson, Digital Marketing Technology Coordinator, Crowell & Moring LLP, for the Third Quarter 2018 LMA Mid-Atlantic Region Newsletter