Arrrgh not an outsourcing agreement!

There are some very special people in the world. They can get excited about a densely packed word document full of legal and technical jargon. They can actually read the whole thing (yes, all 120 pages) without falling asleep. And, here's the thing, when they realise that there are additional complexities like step-in rights, service credits and the possibility of generating important new IP, it's like they bought a cake that looked quite tasty in the shop only to find on biting into it that there was actually a delicious additional layer of jam and cream. Yum.

We are a rare breed, but special indeed.

If you are not (or not yet) part of that club, then tackle these things first (in this order):

• Liability - Go straight to the liability clause and make sure it covers everything it can. Start balancing the cap(s), the list of clauses or liability types that are outside of the cap(s), exclusions of liability, indemnities, liquidated damages and insurance.

• Remedies - Work out, by reference to specific clauses, what is supposed to happen if things go wrong. Then think about whether that is enough and how the specific remedies fit with the liability position.

• Level of service - What does good look like? It is quite often a harder question to answer that one might imagine. Is there a contract mechanism that helps both sides understand that concept? If the customer is not happy, what happens next...and after that...and after that? You will probably end up with a mix of meetings, remediation efforts, service credits and step-in, suspension and termination rights. The right mix depends on the value and importance of the services and the broader context.

• Commitment - There are several concepts to think about within this theme: minimum use or purchasing of services, guaranteed revenue, cancellation fees, investment in property or equipment (including maintenance), licences, branding, duration of agreement, renewals, termination for convenience, etc. But it all comes down to the following question: what are you putting in and what is the minimum you want to get out?

• Data - Get used to two reality checks. Firstly, the service provider is probably going to need access to customer data and maybe systems too, and they might generate new data that could be important to the customer. Secondly, the data could be commercially sensitive and could include personal data, so you can't get around the fact that there will be some level of information risk. Ask about data early. Doing things like data protection compliance at the last minute is unlikely to go down well with anyone.

• People - The types of services that get outsourced are often the types that rely heavily on good people doing a good job in a reliable manner. It is easy to underestimate the people-side of things. Ask about key individuals, roles and relationships, and consider collaborating on specific appointments. Then, do some analysis of potential people issues. Who might you end up employing without really wanting to, and who might you end up losing with adverse impacts for your business? Also, although it doesn't feel very nice, you should think about TUPE issues in terms of numbers so that you can give appropriate attention to them in the wider liability discussion.

Doing the initial drafting or reviewing of an outsourcing agreement is a detailed job - ideally for those that like doing it. And getting the content and tone right at the start helps with the negotiation to follow. If you want support, get in touch (harry@hamiltonlawscientific.com). We can help with a single clause or take you from start to finish. You will have one person to deal with rather than a rabble of specialists. And with HLS you will get a price that works for you!