Speaker 1: Hi, my name is Stephanie Pudsley, and I'm an attorney practicing in the United States located in Salt Lake City, Utah. And I work for a global outsourcing company. My role is to work with our internal and external teams to negotiate large scale global and regional complex agreements with our partners. We have about 330,000 employees in more than 80 countries. And I'd like to share some thoughts with you today on negotiating cross-border agreements. Now as a side note, most of these thoughts are certainly applicable for negotiating very large scale agreements, but they're just as applicable in negotiating a cross fence agreement with your neighbor. So I just happen to be with neighbors that are thousands and multiple thousands of miles away. The world has become a much smaller place and many of us are doing business all over the world and with other countries. And even small businesses now have a cross-border reach. And as we talk today, I want to leave you with one overarching principle. We as lawyers are representatives of the court, wherever that court may be, and representatives are clients. We've taken an oath to always be civil and professional. Even though there are many who don't understand that game and the rules that we've agreed to play by. And there are many who don't follow those rules. The root of the word agreement is to agree, not to win. So it's important to always remember that we're building an understanding. And our agreement is only as good as the terms that we come up with. So please keep that in mind as you work through the issues and the individuals that you're working from, wherever they're from. And remember there are different cultures and there are different things that are underlying what you're working on. There are two main things I'd like to focus on when negotiating these kinds of agreements. First is the substance of the agreement. And the second is the mechanics of how you actually do it. And some of these things are going to seem awfully normal. So the first is the substance of the agreement. What kind of an agreement are you creating? Are you building a relationship or are you severing a relationship? Years ago I was a litigator and so carefully drafting an agreement that closes off a relationship can be just as important as building a new one. Now in my practice I'm focused on building new relationships. But it really impacts how you behave during the course of the discussion and very likely the positions you take. When you're building a relationship, I find that some parties are less careful with the terms. And they're just so excited about building that they don't carefully consider the words and the binding effect. However, when you're severing a relationship, you're very careful to think about recourse and documentation and venue and jurisdiction. However, those are just as important when you're building relationships, especially in the cross-border agreement. We'll talk about that more in a minute. When I see an agreement that involves another country, I have a very quick internal checklist that I run through. I have some questions and I want to share those with you. And I find that some of these are questions that when I was practicing solely in a state within the U.S. or just a U.S.-based practice, they weren't necessarily as important. Let me run through them for you in no particular order. First is, where would be the performance of the contract? For example, what country or countries? Because if there are more than one, you need to know those. Which country's law will govern? And what would be the venue? Are there any local law considerations? Does your contract or agreement allow for local law considerations? Because don't presume that there won't be any local law considerations. That's a very Western way of thinking. And if there are local law considerations, do you need any special provisions in your agreement for that particular country? When you figure out which law and venue will apply to the agreement, think about the ramifications of that. Let me give you an example. I have a son who served a foreign mission. When he got home, he was very excited to start a business, a very small business. He started a watch company. He designed watches. He contacted a company in China to make the molds and create the casings and the facings of the watch. He ordered straps from another company and packaged them elsewhere. He then designed a website and sold his products on Instagram. I think he was 23, maybe. And his whole presentation was incredibly impressive. And he was contacted by a very well-known magazine out of London, England. And he was offered to feature his watches in this magazine. And he was super excited. And so they emailed him a PDF agreement, just a confidentiality agreement. And he promptly signed it without reading it and sent it back. Now, he didn't have anybody else read the agreement until after the fact. And, no, spoiler, nothing happened. There wasn't a problem. But he agreed to litigating in Wales at his expense, under the laws of Wales, and paying for the company's litigation expenses as well. So when he finally told me about it and I asked him, may I see the agreement, he produced it and was shocked to hear that he'd agreed to all of these things. Because being a young kid, he said, well, I can't afford to go and pay for all of these things. My point being, what are you willing to agree to? And he didn't know that he was allowed to negotiate agreement, because it's sent as a PDF, to which I would say, always ask for a Word document, and of course you can negotiate, because the worst they can say is no. So, back to the original point is, are there any local law considerations for venue and jurisdiction? Another point that runs through my head when I see a cross-border negotiation is, what about privacy laws? Privacy is a brand new area in the last couple of years that is exploding. And especially in other countries, privacy has been a consideration for significantly longer than in the U.S. So, ask yourself that question. What about tax implications? The more subtle questions. Are there language barriers? Are there cultural barriers? Do you need to consult local council for anything? One step further, do you need to engage local council for anything? Do you need a specialist? What language will your contract be in? I'm lucky. My company does all of our contracting in English. Many companies do. But the contract needs to state that. The contract can state what language all contracting can and should be in. Some contract has dual languages where you've got two side-by-side paragraphs in both languages. And then it should state which of the two written versions takes precedence. And if that's the case, are you capable of looking at both versions? Or, again, do you need to bring in another attorney who can look at and tell you which of those versions is accurate or that they're both accurate? Those are my checklists. And I recommend that you be thoughtful of those as you're getting into a negotiation across international borders. Even with the smallest of engagement to the very largest of engagements like I work with. Oftentimes, I find that negotiations can be really difficult. And I have to stop and ask myself, is this difficult because it's cultural? Or is this difficult because of the nature of the deal? Or is this difficult because I'm an individual? Or is this some sort of a hybrid because of all of it? And, again, you don't have to be difficult. You don't have to be disagreeable. But you have to figure out, you know, what is going on here? An example. I had a cross-border negotiation where it began with emails and phone calls and video calls. And then a very lucky thing happened where we were able to have a face-to-face negotiation. And the particular contract negotiator I was working with was incredibly unprofessional and very uncivil at every single turn. His business leader, contact, whatever, was unaware of how unprofessional he was. And as we sat in a room together, he would be incredibly unkind and unprofessional to me at every turn. And his business contact was embarrassed and surprised. And every time this happened, he would stop the negotiation, invite this person out of the room. Then the business guy would come back in, apologize to me, invite him back in. We would begin again. And then it would happen again. This happened probably over the course of the day maybe 12 times. And it was really interesting to have this experience. At the end of the negotiation, we ended up getting the contract signed. And we're business partners. It's a great business partnership for the companies. I remember sitting at my desk in my office and receiving a big box and opening it up. And it came with a note. And I actually keep it in my office. I'll show you. I have it right here. I'm going to cover it so you can't see it. A little note that came. I'll read it to you. And it says, I can't thank you enough for all you've done to get us through our contract agreement. Thanks for staying strong and being kind through this difficult process. I truly appreciate it. They'd sent me flowers. And it was from the client. The lesson I learned was being true to yourself matters. The deal was completed. And on the terms that we needed, I was recognized and rewarded for my efforts of being professional. Instability and professionalism is never the answer. And I compare this with another agreement that I worked on not too terribly long ago. Where, again, incredibly difficult terms, incredibly difficult people. And, again, I asked myself, is this a difficult contract? Are these difficult people? Or is this something different culturally? And it turned out to be a cultural difference. There were significant similarities with difficulties. And what we did is we called in counsel from that country on both business and legal sides. And explained to them what we were experiencing. And we were given a lot of underlying cultural lessons of here are different ways to handle the cultural things that you're seeing in the business negotiations. Which was very helpful to us to understand that it wasn't personal. And it wasn't a person-to-person disagreement. It was a cultural lesson to learn. If you can identify what you're dealing with, cultural versus personal versus deal terms, and account for it in your strategy, and maintain your professionalism and stability, then you're going to be well ahead of the game. And irrespective of others' behaviors, for whatever reason, then you're going to be able to come to a better resolution for your clients and for yourself. And we as professionals, that's what we've been tasked to do. So, I want to move and pivot to the second thing I wanted to talk to you about, which is the mechanics, not of what the agreement is, but how we get to our agreement. And how to carry it out. Interestingly, with the current state of the world with this COVID-19 pandemic, my negotiation practice has hardly changed at all. I mentioned that I've had an in-person negotiation, and that's extraordinarily rare for me. Most of my life exists with multiple phones and screens and video conferences. And having the in-person experience with my tool belt, at least for a moment, is something. But video conferences, right now, are one tool for cross-border negotiations that are very, very common. And they are a skill. And they are something that should be practiced and learned. So, it's video conferences, phones, and emails. Those are really the only way to do it, at least right now. So, with video conferences, I prefer them because, just like being in person, you can read people's faces and body language. And as the lawyer, you have to practice. And I would recommend practicing because you've got to be able to type and listen and look all at the same time. You're going to have other people on your team. What about them? You've got to be able to think, who's going to screen share? Who will take notes? How will you communicate with the other folks on your team? With a tool like Zoom, there are chat features. I don't use those because I don't want to run the risk of breaking confidentiality and privilege. So, I use an internal tool that my company has. And I also don't want to run the risk of accidentally typing into the chat feature where the other side would be able to see it. You can text. You can have a group text. But you need to think about how you're going to be able to do that. You need to be able to learn how to use whatever tool you're using. If it's Zoom, figure out how to screen share. Figure out how to use whatever it is you're going to use. Make sure your computer and your phones are updated. Make sure you have sufficient Wi-Fi to use your computer services. Be thoughtful of your lighting. Too much light or too little light can be distracting. Be thoughtful of what you're wearing. I remember being on a negotiation where from the top half up, the lawyer was wearing very professional clothes. And then they stood up and they were in running shorts. And it was distracting. And you don't think you're going to have to get up and leave, but things happen. Or you may drop something. So, just be thoughtful of everything about you as if you were going to be in the same room as someone. You would be thoughtful of how you were wearing. Tell those that are on your team to also be thoughtful of these same things. They look to you as the lawyer as maybe the captain of a team. You may all be equal partners, but they look to you. Think of your connection to the Internet. Oftentimes, being hardwired in is a more stable connection than Wi-Fi. I would also recommend you consider the backgrounds behind you. Warm and professional, interesting visual effects behind you, things to look at, rather than the fun Zoom backgrounds that are available. I would also suggest you understand the pros and cons of all of the various mechanisms. Video calls, phone calls, emails, each of them have pros and cons. Once you figure out the mechanism you're going to use, the next step is how do you start a negotiation with someone you've never met and you probably never will meet? The way I start them is, say hi. Let them get to know you, which is why I like a video call. Be human. It's okay to be human, especially during this pandemic time. It takes people from a very stressful moment to a, oh, I think I can get along with you. I think I can negotiate with you. I think we're all working towards the same resolution place. That's a really good thing to do. Then set some ground rules. Some of them are just business keeping, things like who's going to take the notes, who's going to control the document, who's going to screen share. Talk for a minute. You don't even have to talk about the contract. Ask them where they are. Ask them about the weather. Ask them about their pet, if their pet runs through. If human things happen, like a child runs in and needs a snack, take a break. Be human. Things like that are going to happen to you. I can remember one negotiation I was on where, well, in Salt Lake City, we don't have earthquakes very often. We had one. These bookcases that are behind me were shaking. My internet then disrupted and I had to go to a phone call. When I got back on the phone, which was my backup, everybody on the phone was laughing. They said, so are you okay? Everything on your bookcase was shaking. I said, yeah, that happens. Then we were able to move on. But to be able to have the kind of relationship, even with those folks that you don't work with and you're negotiating with, is a good thing. They may need a favor and you may need a favor. So develop relationships through it. Again, telephone, I like to have as a backup and have the video on as first because there's so much you can learn from body language. I say take advantage of it. If someone is being obnoxious, you can see it. If someone is absolutely perplexed, you can tell. When it's not your turn to speak, mute your mic. I was on a call yesterday and there was someone eating chips on a very large call and crackling and crinkling plastic. It's obnoxious. And I would also set ground rules and say, please don't record this call unless you ask. It seems like common courtesy, but that's a legal thing. A lot of business people would not assume that that's not okay. And at the end of your negotiation, I would be proactive and take the lead and say, now, what are our follow-ups? Identify whom on that call had what task. Identify now I have the document or you have the document. Do we want to schedule another meeting? Do we want to follow up via email? And be polite. Be professional. And again, as my final takeaway, circling back to what I talked about at the beginning of this is remember to always be professional. It's our responsibility as members of the bar, as members of this profession, people who remember how you behaved because it matters. Remember what your goal is. Are you trying to win or are you trying to agree? Always represent yourself and your client in a way that you would be proud to know it was being recorded permanently. Although most people we interact with will never know that we are people of faith or members of the Church of Jesus Christ of Latter-day Saints, we should always represent ourselves and our clients in a manner such that it leaves no question that we are. Thank you for giving me a chance to speak to you today. I appreciate it. If you have questions, please feel free to reach out to me through the J. Rue Clark Law Society.