The Power of the Negotiation Mandate

Mandate /ˈmæn.deɪt/ (noun) a command or authorization to act in a particular way

Slow negotiations create bottlenecks in any business. Generally when we think about speeding something up we look for technology and process improvement to create a step-change, and legal is no exception to this.

However, what looks on paper like a significant cost reduction takes specialist skills and heavy lifting to realise. There is a huge amount of set-up involved in developing tools and playbooks that cope with every eventuality, let alone in an ever-changing, increasingly regulated and global business environment.

At Deloitte Legal we believe in another important factor which has the power to transform your negotiation process.

Rachael Vickery is a lawyer with a passion for providing real solutions to business problems.

Early in my career I was head of legal for a fast-growing company with lots of new people coming on board all the time. There was a real danger that we would lose control over our contracting positions so I sat down with the business leaders in workshops to pull out the key principles of the business. Out of this I developed a ‘commercial principles document’ to make sure we were all on the same page and growing in the right direction

This document was an early prototype of the negotiation mandate which forms the foundation stone of our legal managed service today. For our lawyers, developing a negotiation mandate is a great opportunity to get to know and understand our client. It acts as a guide to their business position, their risk appetite, how they operate. What makes it ‘that business’? It’s their DNA, and it is unique to every organisation. It helps us understand how each side will react to a contract, so that we don’t need to keep going back and clarifying the base understanding. It enables us to work as a true extension of your in-house legal team.

Just as every individual and company is unique, each Negotiation Mandate is different. It reflects the culture, ethos, persona, brand and style of the organisation. The Negotiation Mandate is key to setting the tone, negotiating positions, how communications ‘look and feel’, how an organisation represents itself

The mandate is a living document. We talk to the lawyers, They usually know instinctively what the mandate is without ever seeing it written down. It’s about how far you can go in accepting risk, which areas of contracting are the most sensitive drivers of success or failure for the business. When we write it down and play it back we are hopefully holding up a mirror, but realistically we will need to keep the dialogue open and continue to check our understanding as it deepens. The company’s own lawyers develop this understanding through daily immersion in business discussions. Just by existing in that environment you absorb the strategy and culture. The mandate accelerates this for our team, giving us institutional knowledge so that new lawyers can hit the ground running when you suddenly need to ramp up resources. It’s like we have been there forever, at your right hand.

Technology plays an important part once the mandate is clear. Our Legalhub platform helps us capture the areas that are consistently negotiated. Very often we are able to have really valuable conversations:

you may not realise it, but this is actually your position.

If the terms you agree to 90% of the time deviate from the mandate, that explains why negotiations can take so long. How can we solve that problem? Do you need to double down on the mandate and hold the line, or is there an opportunity to shift the starting position in the negotiation and save a lot of energy for other opportunities? We are constantly thinking about ways to free up the legal team, oiling the wheels in this way to accelerate the growth of your business. The mandate forces everyone to be really honest about what matters.

A clear mandate requires legal and business thinking to come together, and it makes your legal function more efficient and cost-effective from day one.

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