Whose Paper?

Tony: Hello, today is Thursday, October 30^th, 2025. I’m Tony Mangino from TC2 and this is Staying Connected.

I’ve asked my friend and colleague,  Laura McDonald, a partner at LB3, to walk me through a question I often get from clients:  when doing a deal, whose “paper” should the enterprise start with?  Their own paper (which was carefully crafted to reflect theirinterests and the services they are purchasing) or the vendors after providing the vendor with a handful of key terms for inclusion.  Laura, thanks for joining me today.

Laura: Tony, great to be here; and this is a question I often get too.

Tony: So that means you have the answer?

Laura: Well, I have answers – but as is often the case, the answer varies based on circumstances.

Tony: Very lawyerly answer, but I’ll bite– what impacts the decision?

Laura: The primary things that drive the “whose paper” question are:  (1) leverage; (2) size of the deal and type of services; (3) where you are in the process; and (4) how much time and energy are you willing to invest.

Tony: I get the question most often when we are helping prepare an RFP.  Does it matter if the company is about to engage in an RFP process? 

Laura: Yes.  Excellent question.  If a company is doing an RFP, and is asking a range of providers to respond, the company has two basic choices – add key legal/contractual clauses or concepts to the RFP and ask for a response on those or provide a model MSA and ask for a response on the MSA.

Tony: Won’t adding an MSA bog down the process?

Laura: It can.  The disadvantage of putting in a MSA is that you must either bifurcate the process or be prepared to allow the provider to have more time to respond to the RFP.  There are other disadvantage as well:  For example, the provider may bring in its team of lawyers, whose first response is to say No (even if internally they know that if push comes to shove, they might agree on terms later to save the business). You might run into resource strapped providers who don’t have legal resources handy so you might get a response reviewed primarily by business folks.  I have been in a situation where the provider’s lawyer then tries to claw back concessions after you proceed with that provider based on the responses because they were not approved.   And you may have limited time or resources.  Remember, you must build into your prep time, time drafting the MSA.  My experience is even companies that have their own “model” MSA have to spend a fair amount of time to customize and craft it to meet business needs, particularities of the providers or the market, take into account regulatory issues (always something to watch in the tech/telco space), and make sure it really works for the needs of the company for that deal. 

Tony:  I think you’ve talked me out of using an MSA as part of the RFP process, plus I’ve seen supplier positions on specific commercial terms that may reside in the MSA evolve over the course of an RFP as a part of pricing concessions.

Laura: Tony, I would not immediately discount using an MSA as part of the RFP process.  I have seen it work very well, particularly when the company has leverage and really is looking for a new solution and is willing to do the work.  I had a client that ended up with two very strong MSAs from two of the providers responding, as well as good pricing and commercial constructs.  And these MSAs lasted through many contracting cycles with minimal need for adjustments.   In this case, the third provider (the incumbent) lost the business, but a few  years later came back and agreed to a strong MSA to get some of the business back.  I’ve also had it short circuit the negotiation process after the RFP is complete.  So, you may spend more time in the RFP process, but you spend less time getting from the awarded bid to a contract that works for the company.  It also works for new services, or where all or most of the providers are “new” to the company or in cases of managed services.  Plus, the advantage of starting with your own MSA means that instead of negotiating to get improvements to a bad provider form, the provider must negotiate to get its own provisions into your contract.  And of course, you have to be reasonable because each provider has their own business processes that will need to be accounted for; you can’t assume that providers will accept your MSA lock, stock, and barrel. 

And, to your point re: tying pricing to commercial terms – that does happen both to company’s favor if they hold the line, and to their disadvantage because the provider argues they can’t possibly give that concession, particularly at the given price point, it will cost them too much.   However, if they give the pricing and the MSA answer at the same time, its harder (not impossible) for the provider to argue that it can only give a clause if the rates increase.

Tony: Can you accomplish the same thing by putting in a limited group of clauses or concepts in the RFP?

Laura: You can accomplish a fair amount with that process, and that requires less leverage and advance work (but it does require advance work).  That method keeps you from getting bogged down with fighting lawyers and it focuses the provider on things you really care about, and it takes fewer resources up front.  You must, however, factor in time and resources to get a contract with those clauses intact and that doesn’t have the restrictive or unfavorable clauses that are likely to be in a provider’s form.

Tony: What other factors impact the decision on whose paper  you start with?

Laura: Another critical factor is the size of the deal and the provider.  If you are doing a small deal, or a refresh, then in most cases it doesn’t make sense to start with your paper, unless the provider is a newer entrant really eager for the business, or it is mission critical and you have to have your provisions. 

Tony:  I can’t imagine giving new paper in the case of a refresh of an existing deal, outside of the RFP process we discussed.

Laura:   I agree, except for circumstances where the existing deal is OLD and the existing agreement has a zillion amendments.  In that case, starting fresh makes sense.  But it does take more time than a simple amendment.  It is a risk reward analysis.  Can you live with what you have or has the market, your needs, the size or age of the deal changed enough that the OLD deal doesn’t work anymore.

Tony:  I’ve found that leverage is a key factor in how you structure the deal.  If your company has a long “partnership” with a provider and has little ability or willingness to move services, then putting new paper in front of the provider is likely an exercise in futility. 

Laura:  I agree.  You have to be realistic about your timing and leverage.  Sometimes you just have to hold your nose and pick 6 – 10 issues that you focus on.  Just make sure those are ones that give the company flexibility and limit risk so that in the near future, the company can reassess and perhaps replace a mediocre agreement with a strong one.

Also, make sure the company is making the decision, not letting the provider make the decision for you. 

Tony: How can they do that? 

Laura:  By delaying, escalating, and just continuing to push their own paper.  You must be prepared for that and have a plan and a fall back.

Tony:  So, in short, I think you are saying there is a time and place for starting with company paper and a time and place for starting with provider paper.

Laura: Spot on.  But let’s be honest, provider paper is written to protect the provider, so you want to make sure that before you get the paper, you are outlining those key provisions that you must have.  You also want to be sure you read and understand and can live with the provider’s paper.  Unless you are buying a printer from a retailer, and  you have no leverage or other options, you should always do your due diligence before you sign any contract.

Tony: Always a good reminder.  Laura, thanks for joining us and if any of our listeners have any questions or would like to learn more about how to assess what paper to use, or to discuss best practice for sourcing and contracting deals, please contact Laura, me, or any of our LB3 and TC2 colleagues by giving us a call or shooting us an email. 

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