For a minimum of two years and perhaps quite a bit longer there will be no real idea of what will change. Perhaps therefore, you can adopt a “wait and see attitude”, get on with your day-to-day work and, once things are clear, then start work based on the facts. Better than wasting time on planning for something that may not happen for some time and that anyway, you really don’t know the detail of?
The Time to Start IS Now
But that would be a mistake – in fact, there are things you can do now to mitigate the impact of any future changes and provide the fullest protection for your business, whatever the final treaties and agreements that are agreed and enacted.
Essentially what we do know is that a number of fundamental tenets of our corporate engagement within the EU will change in some way. In no particular order, these include:
- Freedom of Movement – which may impact your ability to employ EU workers or send staff to fulfil work in the EU (sorry, this is written from a UK perspective).
- Freedom of Goods – there may be increased tariffs, restriction on volumes of certain goods traded, increased delays or paperwork or, ironically, new specifications that must be met.
- Changes in Territory – when the UK leaves the EU, the meaning of “EU” with respect of a territory for the delivery of goods, to be licensed or covered by a contract will change.
- Governing Law – Currently a contract with a governing law of UK encompasses 40 years of EU treaties. Here again, either when the UK leaves the EU, or over the coming months and years, that meaning may fundamentally alter.
I argue that, whilst we don’t know the detail of these changes or indeed how they will impact business, call it “Brexit Preparedness,” and it is an initiative that organizations will be implementing to understand how the potential outcomes of Brexit will affect their businesses, and doing it early enough so they can act upon the insight, and make business decisions to minimize the potential negative effects.
First Steps for Brexit Preparedness
Find your contracts
OK, first thing – get all your contracts in one place in a format that allows you to interrogate/analyse them, so you can identify which ones you need to focus on and where the rogue clauses are.
Triage your contracts
Which of your contracts are still going to be around in two years – if you are on a fixed term of less than two years, with no chance of renewal or extension, let’s be honest, you can probably let that one ride.
On the other hand, perhaps you have a number of key contracts which have a life of 3 – 5 years, are perpetual, where you purchased goods or services (software licenses, maintenance contracts) covering the “EU”, or where you are supplying a valued customer that you renew each year. You should really identify these and mark them for early attention.
Now you know what to focus on, it’s time to start ensuring that, irrespective of the enacted legislation, you have as much cover as possible.
We know that changes are coming, so ensure that you are protected – perhaps include clauses locking in a geographic territory, ensure that you have appropriate termination clauses (i.e. should you be unable to employ people) or the ability to change prices based on tariffs – or limit the term of the contract.
By now you will have identified which contracts are a) important, b) impacted and c) with clauses that may cause a problem in the future. The bad news is that you are going to have to renegotiate these with you suppliers, customers and partners.
The good news is, that you have at least two years and rather than a fire sale, you can enter into negotiations with time and clarity to work on the best outcome – remember, the other side will probably also want to ensure they are “locked in”.
A Helping Hand
Of course, what I’ve said above about finding contracts, identifying which ones need work, and where, is not easy – it’s months of tough, manual, boring work to unearth all your contracts (and addenda, change requests etc.), collate then, read them to get at the data – and that’s before you start to remediate.
Fortunately, I work for Seal – our Discovery and Analytics software can automatically find all the contractual documents on your network, ingest them, extract the appropriate clauses and meta data and present you with the information you need to get to work.
Of course, you could just put it off, wait a while to see what happens, perhaps hope it never does – or you could do the right thing and start work now to protect your business.