Why a Monopolist Doesn't Want to Change the Contract?
Most small companies in Lodz give up at the start when they see a 40-page contract from a giant from Warsaw or Berlin. You hear then that it's a standard template and no one will change it, but that's just a game to wear you out. We sit at the table with you and know that every corporation has its weak point; you just have to find it in the maze of paragraphs.
A standard template is only a suggestion
We often encounter a situation where our client, a manufacturing company owner from Radogoszcz, receives a document from an energy supplier or logistics operator that looks like an inviolable Bible. In March 2024, we analyzed such a contract for a company employing 34 people. The corporate lawyers claimed that changes were impossible due to IT systems that allegedly wouldn't accept other rates. This is a classic 'tied hands' technique. The truth is that this 'standard' was written by an army of lawyers to protect only one side — their side. We tell it like it is: they simply don't want to spend 3 hours on approving amendments in the legal department.
In reality, the process of changing a contract in a large structure takes an average of 9 to 14 business days if you know who to hit up. A corporate salesperson who wants to close a sale before the end of the quarter is your best ally. He is afraid he will lose his commission if talks get stuck. We used this during negotiations for a contract worth 87,000 PLN per year, where 12 of our key comments were initially rejected. When we showed that we were ready to walk out of talks a week before the deadline, suddenly 7 of those points became 'negotiable'.
The corporate 'standard' is only the first offer they throw on the table, counting on you not having the strength to read the fine print.
Fear of the salaried employee
You must understand who is sitting on the other side. It is usually a middle-level manager who has a director above him, and that director has a board above him. In May 2023, we conducted negotiations for a printing house from around Brzezińska Street. The person on the giant's side was afraid to sign off on a change in the provision about contractual penalties because that required an email to the compliance department. Such a person is not thinking about the good of your company; he is thinking about not getting a reprimand for 'non-standard action'. Without beating around the bush — he would rather lose you as a client than risk a difficult conversation with his boss.
Our method is to provide him with a 'safety net'. Instead of demanding a point be deleted, we propose an alternative provision that sounds almost identical but changes one key detail, e.g., the payment term from 14 to 31 days or the liability limit to 50% of the order value instead of 99.5%. In 63% of cases when we present the ready text of an annex, the other side accepts it because the manager can present it as a 'negotiation success' consisting of maintaining most of the original assumptions.
Hard facts, not promises — negotiations with a giant are a fight against its internal bureaucracy, not business logic.
Arguments that crumble the wall
Instead of complaining about high prices, hit the operational impossibility of performing the contract. If a giant imposes a penalty of 500 PLN for every hour of delay in delivery, show them that their own notification system in Lodz works such that drivers wait at the gate for an average of 2.5 hours. In October last year, we proved this to one of the logistics operators using GPS logs from 14 of our client's trips. When you put concrete data on the table instead of emotions, the corporation must react because their own procedures require taking operational risks into account.
Another effective move is to point out the contradiction of their contract with local law or industry specificity. Small companies are often afraid to point out mistakes to giants, but we do it without legal jargon. If a confidentiality provision is formulated such that you cannot even brag about cooperation in your portfolio, and you run a marketing agency, then this provision kills your development. We fought for a change of such a point for an IT company, shortening the non-compete period from 3 years to 8 months, which allowed them to take on a new order worth 42,000 PLN just a quarter later.
When to let go and walk away
Not every battle is worth your time. If negotiations for a contract with a 3% margin have been going on for the 4th week and involve 3 people from your team, you're probably already losing on it. At Consilium Krasiński, we always do a quick profit and loss calculation. In December, we advised a client in the construction industry to give up subcontracting for a German developer. The provisions on bank guarantees for the amount of 115,000 PLN were constructed such that they would freeze his financial liquidity for 2 years. This wasn't a business; it was a noose around the neck.
We say it openly: sometimes the best outcome of negotiations is no signed contract. Giants often look for 'capital donors' among small suppliers, imposing payment terms of 90 days. If your company doesn't have a cash reserve for 4 months of survival, such a contract will destroy you, even if the amount on the invoice looks impressive. We help assess this risk with a sober eye before the emotions related to a 'big project' take over common sense. We sit at the table with you so you don't have to sit at the liquidator's later.
It is better to lose an opportunity for bad earnings than to sign a sentence on your own financial liquidity.
