The Surprising Key to Simple Negotiations: Respect
We sat down with thought leaders in contract management to learn their insights, predictions, and advice for improving this field of work. Christian Zapf is SVP of Corporate Development and General Counsel at AbPro, whose mission is “To improve the lives of mankind facing severe and life-threatening diseases with next-generation antibody therapies.”
Contract management is rarely like the movies. There aren’t lawyers leaning over a conference room table, spitting threats of court trials at each other. At least, that’s not how it should be.
Christian Zapf has been an attorney for many years, and much of his success as in-house counsel at Abpro, a biotechnology company based in Boston focusing on the development of antibody therapies, comes from an unexpected technique: respect and consideration.
That manifests partially as gentle communication and professional courtesy. Here is a look at the different approaches Christian has used to extend these skills into contract negotiations and management.
It Starts Inside Your Own Organization
One of the first hurdles in-house counsels face when establishing a contract management process is getting full compliance from other employees.
Often, Sales, Procurement, HR, and other departments just don’t realize the document they’re processing needs to go through Legal.
“For example, in the past, maybe one of our scientists was completing a work order for lab services that they need to perform their work. They didn’t realize that a work order is part of a contract and should first go through Legal.”
Luckily, in Christian’s case, educating other departments on the proper procedure was simple. Since his company is fairly small, Christian was able to communicate directly with everyone concerned to remind them of the process, and the problem was addressed.
“It’s important to respect people as professionals. These are serious people who will do the right thing as soon as you educate them on what that is.”
Christian’s approach of expecting the best of his coworkers and trusting them to follow through is a cornerstone of his approach to contract management.
Contracts Rely on Long-Term Business Relationships
Contrary to pop culture, the bulk of the contracts that Christian works with are not contentious. One party isn’t typically scouring an agreement for opportunities to take advantage of the other.
“Honestly, the majority of the time, in-house counsel’s goal is to maintain the relationship, not to create conflict.”
Obviously, not much work would get done if vendors and providers spent all their time fighting over every contract detail. The real goal for in-house counsel is to facilitate deals being made– and work progressing.
There are lots of other ways that being considerate of each other plays out in contract completion:
- Often, the people who fulfill the terms of the contract never see it. For example, in a manufacturing setting, the people who assemble a product don’t know the specifics of the agreement, but both parties trust them to do their job.
- No one wants to go to court to litigate a contract. Court proceedings take much more time and money than is practical for everyday contracts. In Christian’s experience, any issues are solved through business discussions.
- Simplicity often works best, if trust is present. Christian notes that approval processes in particular can get too complicated. “Some companies have complex policies with different thresholds for different types of agreements. “This makes compliance more difficult. I recommend keeping it simple and clear who can sign or approve.”
Trust Gets Easier with Experience
Christian has learned over the years to very judiciously apply his negotiation skills. With experience, he understands not only how aggressive to be with a particular clause, but also how to weigh it against the priorities of the business.
“You can negotiate all those little details and you will get a better agreement, but what is the risk / reward? What is the cost of spending all that time and slowing down the deal?”
Often, completing a large contract in a timely manner is more important to the business than haggling for a slightly better outcome.
With every contract under his belt, Christian has also learned to recognize roughly what terms are appropriate, eliminating the need to negotiate as vigorously as a less experienced attorney might.
“The fiercest negotiators in the world are young lawyers because they have no idea what the right answer is. One says, ‘A thousand!’ And the other says, ‘No, zero!’ When really, an experienced pro knows the right answer will be between 490 and 510.”
There is no recipe for maturity and experience, except the passage of time. But incorporating respect and kindness into contract negotiations can go a long way toward making the process smoother.
As Christian said, only half jokingly, “My advice is, ‘Get older and be friendly.’”