Lawyers as Negotiators: Hitting the Wrong Targets?

Tim Cummins, Executive Director and CEO, IACCM - International Association for Contract and Commercial Management, USA

The annual IACCM study of the most frequently negotiated terms in business-to-business contracts once again reveals a strong focus on the provisions that deal with risk allocation and the consequences of failure. Those who negotiate these deals confirm that their focus is often in the wrong place. Indeed, one General Counsel observed: “Having studied this issue, I realize that much of our negotiation is more driven by functional positions than it is by broader business interests”. In other words, business negotiations can result in the negotiation team fighting for things that undermine the interests of their own organization. This is vividly illustrated when we look at the behavioural impacts of terms and conditions. For example, onerous risk allocation forces defensive approaches to innovation and stifles good communication. Ill-considered performance measurements can lead to cost-cutting that jeopardises quality and outcomes. The inclusion of liquidated damages may result in a culture of blame that undermines cooperation and threatens key issues such as health and safety.

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USA Contract Association December 2011 Vol. 5, No. 17, Autumn 2011

Tim Cummins

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Tim Cummins is Executive Director and CEO of IACCM, a non-profit international association based in Connecticut, USA. Prior to founding the association in 1999, Tim's career included commercial and financial roles in the banking, automotove, aerospace and technology sector. He led sales negotiations for contracts up to $1.5 billion and headed a variety of reengineering projects at IBM Corporation, including the creation of a global contracts process and organisation. Tim regularly produces articles and research papers for publications around the world and acts in an advisory capabity to many in-house counsel regarding best practices in contracting and relationship management.

IACCM - International Association for Contract and Commercial Management

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IACCM based in Connecticut , USA and in the UK is a non-profit association that brings together lawyers, procurement specialists and contract managers to research and develop ‘best practices’ in contracting, negotiation and relationship management. It has more than 22,000 members representing over 6,000 corporations and government agencies from 130 countries. IACCM has recently published the world’s first authoritative guide to business contracting – “Contract & Commercial Management: The Operational Guide”, available through IACCM or Van Haren Publishing.

USA Contract Association December 2011 Vol. 5, No. 17, Autumn 2011