In full disclosure, I’m not a lawyer, and I don’t play one on TV, but it’s safe to say I’ve seen a few partner contracts in my day. In a recent client engagement, we were looking deep into the legal archives to find contractual details for a specific group of direct-contract partners, and we discovered a few surprises.

We found contracts that had not been updated since the 70’s – contracts that reference discounts and other benefits that did not align with the current partner program and with URLs that were no longer valid.

It got me thinking – there must be some best practices for Channel Chiefs and Program Managers to be armed with when going into those meetings with their legal department to discuss partner contracts.

Here are lessons I’ve learned when dealing with partner contracts and best practices to follow when creating new ones.

1. Update your contracts, at least once a decade

a. I know it is the last thing you want to do with partners, but having clean contracts will pay off in the long run. There is an expense associated with renewing contracts, especially with hyper-customized ones. Having an electronic version of the contract with data captured on sign dates (think DocuSign) is a great idea, but it can be a big budget line if you have a lot of partners!

b. While you don’t necessarily need to review contracts annually, you do need to make sure they are consistent with each other, so if you make any changes to your program, you understand the contractual implications. Don’t wait until you have a major problem on your hands.

2. Have the contract point to program and policy documents

a. Your contracts should point to compliance with the published partner program. If you point to program compliance and give yourself a window to publish changes and have them take effect, then you give yourself the flexibility to change them in the future.

b. Some clients have a master contract followed by addendums based on the type of engagement with the client. For example, a partner who resells will have a resell addendum. A partner that will provide managed services will have another addendum. Even within this architecture, point to the program documents and avoid hard-code as much as possible.

3. Avoid URLs that will change in the future

a. URLs change. Websites get redone. If you are going to reference something in your contract that is available online (like program terms or a privacy policy), describe where it is found instead of linking to it. For example, “privacy policy found on our website” or “partner program published on the portal.”

4. Provide mutual protection

a. The spirit of this relationship is a partnership. Therefore, the contract should protect both parties. Mutual indemnification, mutual IP protection, mutual NDA, and the like show partners you are as invested as they are. The contracts set the tone of the business relationship, so mutual respect is a great way to start.

5. Automate where you can and don’t allow customizations

a. Avoid customization if you want to avoid costs. The more uniform you can make your contracts, the better. Think “click to accept” terms, so that you can scale this easily. As soon as you customize, you introduce costs and extra cycles to manage the contract. Automate where you can and be as uniform as possible.

Again, this is not professional legal advice but rather channel life lessons I have learned. Channel friends don’t let other channel friends contract poorly. Your legal department will thank you.

AchieveUnite is a partner performance company built by experts with extensive leadership experience in channel strategy, program development, partner ecosystems, go-to-market models, leading edge education and management coaching. We empower companies and individuals to create value-driven, lifetime partnerships and drive transformational business results through Partner LifeTime Value®. Reach out to us to learn more!