Is your business ready for Brexit? Find out how to protect your interests as the UK triggers Article 50
Whatever you think about the politics, there’s one thing that is certain about Brexit. It’s happening.
Like it or not, the United Kingdom is leaving the European Union, and the commercial world needs to get ready.
In our business, we’re getting a lot of questions about how contract management software could be useful. And it depends; will the UK’s exit from the EU be liberation from red tape or an avalanche of paperwork? One campaign claims businesses could be faced with 60 million more pieces of paperwork every year if we quit the customs union*.
But wait – I’m not telling you to panic. Like most people in business, I’m a pragmatist, and I don’t find pessimism helpful. My clients tell me they feel the same.
So, here’s something that might surprise you. I’m not worried about the Prime Minister triggering Article 50, the mechanism which kick starts our departure from the EU. In fact, I’m going to say that it’s enormously exciting in many ways.
Yes, there will be work to do. But, in my view, the British are a curious, inspired bunch. Even if we’re not sure about something, we can put our best foot forward and make a success of it. What we need now is a bit of entrepreneurial spirit, and thankfully, the UK has that in spades.
So, let’s drill down to contracts. First, if you’re worried about having a cataclysmic problem with your contracts thanks to Brexit, you’ve probably got problems already. With or without the UK’s exit from the EU, you need to have control of your contracts, you need to know what clauses and terms are in them, you need to know when to renew, when to terminate and that you have someone competent in charge on a day-to-day basis.
If you have thousands of contracts, you’ll have thousands of pages to look at, and this is where software can make your life immeasurably easier. Renegotiations and renewals can take months by hand, but transform into a streamlined process one you have your contracts digitised. If you’d like to know more about how Four Business Solutions can help with contract management software, please get in touch.
Of course, there are relevant contractual issues that managers need to consider in terms of Brexit. These mainly revolve around labour, territory, costs and flexibility clauses. Here’s the Brexit plan I’m discussing with our clients at Four Business Solutions:
1. Keep calm and carry on
In commercial terms, no one knows where we will be in two years time, when the UK finally exits the EU. It’s best to acknowledge that. Whether you operate in pharmaceuticals, finance or fisheries, there will be winners and losers here, and some situations will be complex. Is that insurmountable? Of course it’s not. The reality is that business is always volatile. You may not have a crystal ball, but you can plan to be prepared.
First, look over your contracts and recognise that plenty of the material in them can be left to run as normal. If you come across something that needs attention, break your plan down into bite-sized chunks. Success is a process, not a giant leap from one spot to another. It’s as true for Brexit as it is for anything else.
In my experience, business people don’t panic. That doesn’t get results. Inevitably, the politicians and media will make a meal of Brexit. As business people, we have to try and block out the noise, and focus on what’s important. I really believe that common sense will work its way through in the end.
2. Review and refresh
Brexit has brought to a head for some people that they are not paying enough attention to their contracts, and now is a good time to start. In fact, Article 50 is a great opportunity to spring clean your contracts. The key areas to think about could include:
- Movement of people
If this is restricted post-Brexit, could this impact your business? Shortage of labour could push wage bills up.
- Costs and delays
Will new tariffs, exchange rates and customs rules cost your business more time and money? Will supplier costs rise? There are plenty of areas where you might want to renegotiate clauses to allow for new costs or delays.
- Data protection
Once Brexit is achieved, companies that operate in the UK may have to comply with new British legislation on data protection, and this may have a cost implication. It could be worth thinking about how to manage this now if you are negotiating current contracts.
Once the Brexit process is over, contracts that name “the EU” may not include the UK any longer. Consider reserving the right to amend clauses that deal with territory. As with all contract negotiations, the main thing is to be open about your concerns. Something that is left out of a contract is much more likely to cause a dispute.
3. Stay flexible
It is simple to put a standard clause into a contract allowing special conditions depending on Brexit. However, given the uncertainty right now, I recommend a sensible compromise. If you have a renewal coming up, and you can’t wait for Brexit to unfold, ask for a clause which states that when any consequences of Brexit are more fully understood, both parties will agree to come back and refine the contract.
Four Business Solutions consultants have years of experience dealing with these kind of thorny issues in contracts. We’d be happy to talk to if you’d like more advice.
To sum up, as the process of triggering Article 50 gets underway, no one knows quite where we’ll end up. The Prime Minister is entering into the biggest negotiation of our lifetime, and I wish her luck. There will be shocks, surprises and bumps in the road as we move away from our neighbours, but the one thing I can say with confidence is that contract management doesn’t have to be an issue. I’m telling my clients to stay pro-active and positive, because there are simple preparations every business can make to be in the best possible shape.
* Source: The pro-single market campaign Open Britain. #Brexit #contractmanagement #contracts #procurement