If you are a SaaS buyer, there are two really important things to understand.

Negotiating power. As a buyer, you have lots of negotiating power: lots of it that is, until you tell the supplier that they are the preferred provider. Then your negotiating power goes from 100 to about 20.

Risk profile. From the perspective of the buyer, the dynamics – and risk profile – of a SaaS contract are radically different to those of old-school onprem contracts. If you fall out with your onprem software provider then, provided your software licence is still in place, you can carry on using the software. You won’t get maintenance and support, but you usually manage for a year or two. But if you fall out with your SaaS provider, that’s it: no more functionality. Also, crucially, if you fall out with your onprem software provider, you will still have all your data on your systems. But if you fall out with your SaaS provider, all your data is sitting on their servers, not yours.

To achieve a good contract outcome, you need to be able to manage these two issues successfully. And if you are regulated by the FCA, the OpRes requirements make it even harder.

Here’s how I approach things.

• I will agree upfront with you what your success criteria are. This means that we are aligned right from the start.

• I’m a big believer in Eisenhower: “the plan is nothing, planning is everything”. Success starts with good planning: the creation of an internal term sheet so that it’s clear that the choices are, and what the trade-offs are behind each choice. This is particularly important with deals which contain a high number of variables, each variable having a knock-on impact on the next.

• The fact that we have been through the planning process means that we can decide quicker and react quicker – a key contributor to a successful negotiation.

• I act more like an in-house counsel and I (typically) front the negotiation (negotiation is one of my key strengths). That means that (unlike a law firm) I don’t come to you for a decision on every minor issue: I will filter out the small stuff and only come to you with important decisions. This has two main benefits: a) it keeps your brain clear so that you can see the wood from the trees, and b) it takes work off your plate and allows you to get on with your day job.

• Strong SaaS knowledge minimises false starts and faffing around with approaches that don’t make sense for SaaS. Plus key points for you are quickly identified.

• My in-house background means that advice and work is grounded in the pragmatic.

• Strong negotiation skills make for a substantially better deal.

• Early preparation + speed of response mean that you are empowered.

• End result: a much better deal, a much stronger contract.

Do Nothing. Sign the contract on the vendor’s standard terms. Not recommended if the technology is really foundational to your business.

DIY. This can be a viable option if you have done enough similar deals in the past and are confident that you know what you are doing. But be aware that it will consume a large amount of your time.

Use external. There are plenty of law firms that provide this service. Some of them are very good.

Usually a fixed price, based on scope and the value of the deal. But sometimes billed by the hour if there’s too much uncertainty for a fixed price (or if the client has a strong preference for hourly billing).

It’s hard to measure ROI on legal spend for this kind of deal, but I expect your ROI to be at least 5x if not more.