TECHNOLOGY, OUTSOURCING, AND COMMERCIAL TRANSACTIONS
NEWS FOR LAWYERS AND SOURCING PROFESSIONALS

Please join us for the next installment of the Morgan Lewis Automotive Hour Webinar series.

This webinar will be hosted by Rahul Kapoor, a partner in our Silicon Valley/San Francisco offices, Robert W. Dickey, a partner in our New York office, Daniel S. Savrin, a partner in our Boston office, and is the latest in a 10-part series covering a variety of topics related to clients in the automotive industry. This session will focus on the impact of automotive joint ventures and alliance issues on the automotive industry.

Complexity in sourcing transactions relates to the interdependence between the parties executing a program. However, “complexity” can be a surprisingly nuanced concept whose meaning can vary under different circumstances. Here are a couple of these nuances.

What Is Complexity?

If you are buying a physical product, the transaction is not truly “complex” if it can be described completely in the contract, although the product itself may be complicated. For example, a rocket ship is a complicated product, but with specifications that can (and probably should) be described in perfect detail, there is no requirement for an overly complicated contract structure, and the relationship between the parties may not be complex. Contrast this with an engagement that involves business process redesign accompanied by software development and implementation like an enterprise resource planning (ERP) implementation, or a large-scale robotic process automation (RPA) initiative. Although the contract can specify the desired result, in many cases the results will depend on both parties working together to realize that result. This interdependency makes the relationship complex and requires a more nuanced procurement and contracting process.

Customers in outsourcing arrangements are coming to expect (or starting to demand) that their providers have the resources, technology, and know-how to leverage automation software—whether robotics desktop automation (RDA) or robotics process automation (RPA) software—to enhance the capabilities and efficiencies of IT and business processes. While the software promises big benefits, such as higher levels of accuracy, scalability, and cost-savings, as with the implementation of any new technology, there are new challenges to consider.

In this post we take a look at the top five issues to consider when contemplating the use of automation software in your outsourcing transaction.

Morgan Lewis will co-host an interactive master workshop on negotiations and contracting geared toward business leaders, sourcing professionals, and in-house counsel who work together on complex transactions such as digital transformations and vendor outsourcing. Edward J. Hansen, Vito Petretti, Donald G. Shelkey and Valerie A. Gross of our Technology, Outsourcing and Commercial Transactions practice will present and lead discussions on topics including:

As 2018 comes to a close, we have once again compiled all the links to our Contract Corner blog posts, a regular feature of Tech & Sourcing @ Morgan Lewis. In these posts, members of our global technology, outsourcing, and commercial transactions practice highlight particular contract provisions, review the issues, and propose negotiating and drafting tips. If you don’t see a topic you are interested in below, please let us know, and we may feature it in a future Contract Corner.

Nearly every form of service agreement contains a provision restricting the ability of one or both parties to subcontract their obligations. A typical provision (with a standard quick and dirty markup) might look like this:

“Vendor shall not subcontract any of its obligations under this Agreement without the express prior written consent of Customer, which such consent shall not be unreasonably withheld. The subcontractors set forth on Schedule X are hereby approved by Customer.

These limitations are often included as a standard part of the legal boilerplate without much thought, but can present significant problems, especially given the broad use and incorporation of third-party technologies and services.

It seems that there are many forces at play that are almost designed to create or exacerbate change anxiety. Professionals in industries whose business models depend on stoking our change anxiety bombard us with article after article on social media. Industry conferences that consistently display whichever adoption curve you’re supposed to be on at the moment—hinting that you’re seriously behind where you should be, with the looming possibility that you’re about to go out of business because of it. Yesterday it was the cloud, today it’s RPA and AI (or IA depending upon whom you ask), and tomorrow it will be something else.

But even with all of this change coming at us, perhaps most troubling is that feeling that if you just stop for a minute to think and reflect, you may be labeled as entrenched, unwilling to adapt, a dinosaur, or something worse.

The transformational programs that we work on tend to reveal many of the stresses that permeate our clients’ professional lives. In deal work, one of the first places you see this is when a request for proposal (RFP) is being drafted that is supposed to reflect a progressive vision.