"Standard" clauses are like
professions of love;
if they aren't mutual
someone is going to get hurt.

Basically, the provider gets the uranium mine and the customer gets the shaft. 

Amazing as it might sound, the provider versions of boilerplate clauses like limits of liability, indemnification, force majeure, and assignment rights are rarely mutual. Sometimes the asymmetries appear in the paper that the providers give their customers to sign. More often they can be found in the providers’ on-line Terms of Service, Service Guides or Publications, which the written contracts incorporate into the parties’ agreement by reference (in as small and inconspicuous a manner as possible).

Having your TEM negotiate your
telecom service agreements is
just so hit or miss

It’s great to get something cheap, unless part of what you are getting is the risk of a big bill or a long-term headache.  

The TEM providers want to move up the food chain like everyone else, and one way they get a foot in the door—and land the long term bill processing contracts that are their bread and butter—is by offering to negotiate terms and conditions for very little (sometimes nothing).  But  as always in life, you get what you pay for. 

If you think vendor forms are \"fair and balanced\" we\'ve got a network we want to sell you.

Not surprisingly, vendor forms are grotesquely one-sided.

The vendors’ Terms of Service, Service Guides/Publications/Schedules are drafted by the vendors’ lawyers with no customer input, and they are rarely read by customers.

Time is so NOT on the customer's side

The carriers know that an enterprise customer's leverage declines dramatically the closer it gets to the expiration of its contract or the hoped for installation date of a new service, and they work tirelessly to take advantage of this.

Continue reading to discover four techniques carriers employ to capitalize on a customer’s time crunch and how you can counter them.

Cloud computing
thrives in the Goldilocks zone

Sourcing a cloud solution requires a delicate balance of strategies, tactics and contractual requirements to get a deal that is just right.

Cloud computing is so hot right now that many seasoned enterprise IT professionals and sourcing advisors scoff and dismiss it as an over-hyped fad.  Others (mostly neophytes) in the commercial technology business claim that it will permanently supplant both anachronistic self-managed corporate data centers and “old school” IT outsourcing.   

After advising our Fortune 500 clients through many IT outsourcing, managed services and cloud computing transactions, we embrace and apply the Goldilocks principle.

If you want contract
amendments done
right, draft them
yourself

As any negotiator knows, the author of the first draft has a substantial advantage.  It’s an inertia thing—anything the other side wants is a change.

Telecom and IT vendors are quick to supply contract forms, and then to insist on working from them.  That puts the onus on the buyer to catch the “gotchas” and one-sided terms that the vendor inserted, a task that can be exhausting and penalizes the unwary or eager.  

Unless you are doing a very large deal or working with a small vendor, it can be very difficult to get the vendor to work from your draft of the master agreement—so you’ll likely have to slog through their paper, hopefully with the aid of someone who’s done it before.  But amendments, which by their nature are shorter and less complex, are another story.  

It's not how much you spend;
it's how much leverage
you have and keep

Contrary to what the providers tell you, the correlation between commitment and great prices is a lot lower than the correlation between leverage and great prices.

The provider sales teams get compensated in part on the basis of the commitments they secure. Commitments (unlike actual spend) are “bankable,” and a customer who has committed all of its traffic can’t be tempted to try another provider (or threaten to do so if it doesn’t get what it wants). The result is that the providers will do a lot to get as close as they can to a 100% commitment.

Pounding the table
isn't the way to limit
surcharges

Once less than 5%, carrier surcharges now total 20% or more.

Like hotels, banks and car rental companies, telecom carriers have become adept at padding their bills through the addition of surcharges that can’t be negotiated and that they can change at will.

There are measures you can take. Realism and proactive approaches, not bluster and after-the-fact protests, are the right approach to surcharge issues.

Buying telecom
isn't like buying pencils

For many enterprises, procurements are an exercise in “filling in the blanks.”

It doesn’t really matter what the customer is buying—office supplies, soap, ergonomic chairs—a procurement is just a matter of taking the customer’s boilerplate documentation, specifying the price, type and quantity of the applicable goods or services and—voilá!—there’s the contract.

Telecom is different. Really.

Don't get roped into
a benchmarking clause
without teeth 

Toothless benchmarking clauses don’t give you a right to money; they give you the right to a conversation.

If you ask a provider for a rate review or benchmarking clause you’ll get one. But the provider versions are worthless—what we call “we’ll talk” clauses.

What others are saying about us

“LB3 is the top firm when it comes to negotiating contracts for enterprises.”

— Erik Krapf, Editor
No Jitter

"Professional, smart and client focused are the things that come to mind when I think about my impressions of the LB3 lawyers over the 20+ year relationship CCMI has had with the firm.  The folks at LB3 never disappoint... are always out in front of key enterprise issues... and consistently challenge everyone they do business with to match that standard."
— George David, President of CCMI, Publisher of The Voice Report

“Stealing the spotlight [was a partner at] Levine, Blaszak, Block & Boothby, LLP. That’s right – the most informative and interesting speaker during a panel discussion on cloud computing and enterprise communications was a lawyer.”
— Yankee Group