Annual syndicated research subscriptions are a common approach for enterprises and vendors when it comes to gaining access to published research and advisory. However, for all the value and convenience in this type of contract, there is a potential “gotcha” to watch for during the contract renewal – changes in the terms and conditions.
Often contract renewals follow a simple path of adjusting the number of seats and add-on services based on past year’s usage, new requirements, and new offerings by the firm. Often the analyst firm sales representative will send along the new contract with a note that says “it is basically the same as last year, so please look at pages x and y to make sure we have captured the number of seats and services you need. Then sign on page z.” If the client does not carefully go through the contract with a fine-tooth comb they might miss that the “basically the same” contract actually has some key changes to the terms and conditions that severely limit their use of the analyst services or gives the analyst firms the right to audit the client for contract compliance.
In some cases, the firm sales rep does not know that the changes are there, they are simply using the new standard contract. In other cases, the sales rep is aware of the changes but does not want to bring them to the client’s attention for fear of sparking a long review and negotiation process.
- Never accept that a contract submitted during a renewal is no different than the prior year’s contract
- Compare the old and new contracts side-by-side to identify all changes, small and large
- Carefully consider the wording of the changes as minor word changes can have major implications
- Never accept that the contract is locked in stone, involve your legal department if necessary
Bottom Line: Analyst services contract managers need to do a zero-based review of all analyst contracts during annual renewals. While the firms are not necessarily doing anything underhanded, it is incumbent on contract managers to ensure that these documents do not give the firms any unfair advantages.
Question: Analyst clients – Do you have examples of changes in Ts & Cs that surprised you? How did you handle your response?