Nobody wants to be stuck in a relationship with a service provider with whom they are unsatisfied. Such a situation is more difficult when the service provider is an e-discovery vendor – having conflict with your e-discovery vendor can negatively impact on the quality of work you provide to your client, or jeopardize your legal case.
Accordingly, it is important to ensure that your agreements with your vendor help to avoid a situation where, if you find the vendor to be unsatisfactory, you are not stuck in that relationship. The best ways for avoiding such a situation are to ensure that standards for the quality of work and the structure of pricing – two of the most common sources of dissatisfaction and conflict between customer and vendor – are adequately set forth in the contract, and to ensure that if the relationship must be terminated it can be done in a quick and efficient manner.
1. Have Direct, Proactive Standards for Execution of Work
The best way for avoiding getting stuck in a contractual relationship with an e-discovery vendor that you are unsatisfied with is to have clear, direct standards for the quality of work expected from the vendor. Fair, clear contractual language is more likely to lead to a smooth relationship, whereas poor, unclear language is likely to be costly of time and money in the event disputes need to be settled. In addition to having objective standards that leave less room for interpretation as to whether work is being performed satisfactorily, you as the customer will want to make sure that those standards have “teeth” to allow you to hold the vendor to those standards.
2. Watch Out for Hidden or Unclear Pricing
One of the quickest ways the relationship between customer and vendor can be soured is for the contract to have hidden or unclear pricing. The vendor may believe that its pricing structure was clearly communicated in the agreement, while the customer believes that it is being nickled-and-dimed or subjected to a bait-and-switch. Thus, it is important to ensure that all pricing is set forth in the contract, and that you understand the vendor’s pricing structure. Ask all the questions you need to ask, and make sure that all clarifications are set forth in the contract – you may not be able to rely on communications outside the contract in the event of a dispute.
3. Outline Appropriate Causes for Termination
Even if you’ve decided that a vendor’s work is so unsatisfactory that it warrants termination, not having contractually-outlined standards and causes for termination can lead to feelings of ill-will and cause a much rockier transition than otherwise necessary.
Appropriate causes for termination could include: (1) excessively exceeding estimates – while an estimate is obviously a guideline, you may want to consider setting some objective cost ceiling to avoid a bait-and-switch problem; (2) repeated incorrect invoicing/overcharging – a repeated pattern of either billing for services or goods never provided, or overcharging for services or goods, particularly after mistakes have already brought to the attention of the vendor, is something that should be avoided lest future billing mistakes go unnoticed, regardless of whether the mistakes are due to carelessness or maliciousness; (3) repeated quality issues – understandably, you will want to set out objective standards for the level of quality expected in the vendor’s work, and where those standards are not met or where serious quality issues occur, it should be grounds for termination; (4) poor reporting/communication – similarly, you will want to set objective standards for what level of reporting and communication is expected from the vendor, and a repeated inability or unwillingness to maintain quality reporting or communication could be grounds for termination.
4. Avoid Having Your Data Held Hostage
Lastly, once you’ve established cause for terminating your agreement with your e-discovery vendor, you’ll need to begin the process of terminating the agreement and moving your data over to a successor vendor.
One of the primary reasons clients avoid terminating unsatisfactory vendors is because there are no provisions in the contract to prevent the vendor, intentionally or otherwise, from holding the client’s data “hostage” in a transfer to a successor vendor. For example, you will want to avoid prohibitive data transfer “fees” that make it financially infeasible, or at the very least undesirable, to transfer data between vendors.
Ideally, the contract should set forth standards that ensures a quick, efficient transfer of data from a previous vendor to successor vendor – otherwise, once an agreement is terminated, the fired vendor has little incentive to dedicate personnel to oversee a quick and efficient transfer. Therefore, you should insist on timelines for transfer of data, and standards of the quality of transfer work expected.