Back when I was in high school, I knew a guy who was a great athlete – baseball, football and track letterman.  He had all the pretty girls swooning over him (including the one that I was secretly in love with).  He seemed unstoppable.  I ran into him a couple of years ago at my thirtieth high school reunion.  Instead of the svelte, strong and dashing young man I remember, I was looking at an extremely overweight, ponderous and clearly unhealthy man.  In fact, I recently heard that he had a heart attack (fortunately he survived it) and was doing rather poorly.

This memory came to me recently as I was asked to draft a term sheet for an outsourcing deal.  Back when I first started practicing law, a term sheet was a short (two or three pages), athletic document intended to get the nuts and bolts of the business deal memorialized.  Sometimes referred to as a “Heads of Agreement,” particularly by my Commonwealth counterparts, the term sheet was a vehicle to make sure that everyone was on the same page when they started negotiating the deal.  Unlike a letter of intent, however, it contained no binding provisions – it instead was the guiding light – the “ten commandments” – for the deal teams to follow.

Fast forward a few years and, like the guy in high school, term sheets have grown to these overweight, ponderous and unhealthy documents.  They now span 80 to 100 pages and look an awful lot like contracts.  Since negotiating and documenting a major outsourcing deal is so cheap and such fun, outsourcing advisors (particularly lawyers in this instance) have found a way to do it not just once, but twice!  All the better to enhance firm revenue, I suppose.  What better than to take a process that consumes 300 hours of a lawyer’s time at $500/hour and turn it into a process that takes 500 hours of several lawyer’s time – also at $500/hour.

Suppliers hate these things, too.  Generally utilizing scarce in-house resources, the lead time on deals is extended and their internal resource crunch is exacerbated.  They are constrained in their sales cycle and, at the same time, forced to sit through the same discussions twice (or more).

This is madness.

Certainly, putting time in to understanding the business deal is an important process – and one that everyone on all sides of an outsourcing must slog through.  But is it really necessary to discuss choice of law twice?  Is it necessary to drag both deal teams through a discussion of the finer points of indemnity procedures twice?  Is it necessary to add 60%, 80% or 100% to the transactions costs of an outsourcing deal?  No… but at least some of our advisors seem to lead us through that path “for our own good.”

Frankly, it’s time to put a stop to this madness.  Customers… it’s your deal, not your advisor’s deal.  It’s up to you to manage your advisors and get them to focus on efficiencies in the deal-making process, not upon their own profits-per-partner.  Until the marketplace demands a more efficient approach, these pre-agreement documents will grow and grow – until they, too, die of heart failure.