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How Contract White Space Becomes the Gray Area of a Deal (Part Three)

Posted By Genevieve Fraser, Tuesday, October 31, 2017
Updated: Saturday, October 28, 2017

Panelists were discussing the very different worlds of deal making vs. alliance management when ASAP Media left off in Part Two of our coverage of “Reading Between the Lines: Living in Contract White Space” explored the “gray area” between contract signing and actual implementation on day two of the 2017 ASAP BioPharma Conference September 13-15 in Cambridge, Mass. USA. The presenters were Christine Carberry, CSAP, chief operating officer at Keryx Biopharmaceuticals, Andy Eibling, CSAP, vice president of alliance management at Covance, the drug development business of LabCorp, and Brian O'Shaughnessy, a partner at Dinsmore & Shohl and president and chair of the board of LES, the Licensing Executives Society (USA and Canada), which focuses on licensing and commercial transactions involving intellectual property (IP) rights. Now the panel is discussing the handoff from deal to alliance management implementation of the partnership.

 

How does effective handoff happen?

  •  Knowledge transfer.
  •  Art meets science.
  •  The deal leader needs to have significant EI, emotional intelligence.
  •  Sometimes working through difficulty can be bonding.
  •  You don’t want everybody involved in every step, but you need an effective handoff. Bring in the alliance early on and as things wrap up, so the knowledge transfer occurs. Make a note of potential problem areas.

O'Shaughnessy: “There are problems with getting a person to read the contract. He tells me ‘he trusts me,’ but this is HIS business. He needs to bear down and read the terms. Too often a client signs off on details but has never read the contract. That’s when you need to document the visits and confirm the statements he made. Granted, this is difficult to do diplomatically. Frankly, if the boss isn’t going to read the contract, the boss isn’t going to read the contract.”

 

Carberry: “The executive sponsor, whoever that person is, needs to take ownership of it. What will this mean in a year’s portfolio? Is this a big deal or small? If this is a primary revenue driver, you will pay greater attention.”

 

“In terms of anticipating problems, a lot has to do with how you get started. Building a relationship in the beginning is helpful when things get contentious. Everyone should state what they consider to be successful and what concerns them, so everyone has an understanding. Whatever the ‘noise is in your head,’ get it out on the table. Think about having everyone come up with an evaluation of the project, then share it. In the end, the value may be the same, but they used totally different assumptions to get there. Also, set up an easy achievement to drive momentum.”

 

“Remember, people who created the deal are not the ones who implement it. It’s important to reset it with the people involved with the process. You need to get the teams together to discuss process and reinterpret the contract based on what each believes is the deal.”

 

O'Shaughnessy: “The third phase is when the respective implementers and deal makers get together to see if there are fundamental differences. Deal maker drafters will hear the implementers out. Feedback is critical. Don’t drag the last contract out as a basis to begin; instead, examine hot buttons. Sometimes you discover ‘the last time we did this we got burned,’ so seek to avoid it again.”

 

Takeaways:

  •  Success means: parties up-front agree on a set of values.
  • Nothing was agreed to ‘til everything was agreed.
  • Look at everything in development, then made sure it sticks—is held together.
  •  Put details into a ledger.
  •  Teams work through areas as they come up and acknowledge that processes happen within companies so they can move on with negotiated details working in parallel.
  •  Autonomy is a good thing. If lawyers create a massive structure, the results may be too bureaucratic. Flexibility is needed to reflect variables that crop up.

How can we apply previous experiences to future deal negotiations?

According to the audience, there’s a need for “common learning,” sharing it back. You need to discuss what could have been done differently and, in the end, retain some collective understanding, such as capturing what is of value and problem areas.

Tags:  ”First patient  alliance management  alliances  Andy Eibling  Brian O'Shaughnessy  change agent  Christine Carberry  compromise  contract  Covance  Dinsmore & Shohl  due diligence  emotional intelligence  first visit”  governance  Implementation  Keryx Biopharmaceuticals  Licensing Executives Society 

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