Maybe The Problem Is: Time Doesn't Kill Deals
There’s a saying in sales that “Time Kills Deals”. People agree a deal-in-principle, but as we all know handshake-deals mean nothing - the contract means everything.
But this is a problem, as people can back out of a deal-in-principle with few to no consequences. Certainly fewer consequences than backing out of a contract1.
And the more time there is between a deal-in-principle being agreed and the contract being signed on agreed terms, the more time there is for something to go wrong and for a party to back out. How?
Budgets can disappear, particularly towards the end of a budget year
Drivers that led parties to enter a deal can change
People can simply change their minds
Other factors can arise that disrupt the deal
This means, in most sectors, that there is pressure to close a deal - and sign on the dotted line - from the moment an agreement-in-principle is reached. If the contract isn’t signed, the deal may fall through.
For contracts lawyers and managers, this sharpens the mind - focussing the negotation on those big ticket items, and both parties have an interest to ensure there is momentum behind negotiations.
In research contracts a useful distinction between contracts arising from ‘Grant’ projects and ‘Non-Grant’ projects.
‘Grant’ projects involve an application to a funder, some kind of review by the funder, and eventually an award by the funder to the applicant. The applicant might act on behalf of a consortium in which case they’ll need to put in place some kind of collaboration agreement.
‘Non-Grant’ projects are a more typical ‘deal’ where the parties negotiate and find a mix of project, funding, and terms that are mutually acceptable.
For Non-Grant projects, time really can kill deals - prolonged negotiations can lead to myriad factors that lead to either or both parties walking away.
But for most research organisations, Non-Grant projects are the minority; overwhelmingly grant funded research outweighs non-grant funded research.
And time does not, generally, kill deals for grant funded research.
The number of times I’ve been asked to start drafting a contract for a five year project that is just about to finish, or in some cases already has finished!
Just this week a friend was telling me about a multi-party collaboration agreement she was leading; in the forth round of negotiations (a time you would hope was meant for closing off the final points) one of the parties raised a whole host of both new and seemingly unimportant amendments to request.
Negotiations that take a year - or two, or three… - not for any real reason, but just because there is a lack of momentum, a lack of urgency, and because it only takes one party to delay to derail negotiations.
The counter to this is that teams are told every contract is urgent; but that just leads to the same effect - if everything is urgent, nothing is.
This isn’t anyone’s fault; I’m certainly not saying contracts teams are to blame, and I am not suggesting that grant funders have to pull funding if contracts aren’t signed within timescales2. If anything, the clear under-resourcing of the research contracts function is a key part of the problem.
But it has an insidious effect; and where a team, a function, a system is designed this way, it can be all-too easy to process the minority of non-grant contracts where time does kill deals with the same approach.
The only solution I have to this is fairly simple, yet infuriatingly difficult to implement: treat all contracts as if time kills deals3.
Yes, yes - depending on the terms of the contract
Often where I have seen this, the timescales tend to be wildly unrealistic - as they are applied to the most high-value, complex of projects which then require complex contracts - and the pressure has an adverse effect of producing contracts that meet the deadline but aren’t necessarily fit for purpose.
That requires an institutional approach; it doesn’t rest on the shoulders of any individual - contracts need input from a multidisciplinary professional team.