Tech & Sourcing @ Morgan Lewis

Flexibility versus certainty is an important and often challenging tradeoff throughout commercial contract negotiations, particularly regarding termination for convenience. Customers, mindful of shifting budgets, technological changes, and evolving business needs, want the freedom to walk away at their discretion. Vendors, mindful of upfront infrastructure investments, staffing needs, and revenue volatility, want a committed income stream. Reconciling these competing needs can become a significant sticking point, often arising later in the negotiation cycle after other issues have been settled.

The use of robotics in warehouses has become prevalent in the last few years. With improved software and the rise of artificial intelligence (AI), warehouse automation can handle inventory, shipping, and orders. Robotics can improve accuracy, be cost-effective, and optimize space, which can benefit both the warehouse operator and the customer. While the rise of robotics has changed the way warehousing services are performed, the terms and conditions of warehousing agreements have not always kept pace with the significant changes resulting from these developments.

In Part 1 of this Contract Corner, we discussed the renewed focus on resilience in outsourcing agreements for 2026 and how resilience is increasingly becoming a design requirement, not just an untested BCP. In Part 2 we look at how geopolitical pressures can quickly become delivery constraints and how many organizations are leveraging global capability centers as an anchor for critical knowledge and continuity, and provide a practical 90-day action plan and high-level contract checklist that deal teams can leverage during strategy planning.

Outsourcing strategies in 2026 are being shaped by persistent disruption. Geopolitical uncertainty, major service outages, talent disruption, and post COVID-19 consolidation initiatives are driving a renewed focus on resilience in outsourcing operations and contracts.

Legal departments and contract teams are now often under pressure to move faster, provide value, and streamline processes all while contracts increase in length and complexity to address changes in technology (e.g., artificial intelligence) and laws (e.g., various privacy and regulatory requirements). The good news is that meaningful contract streamlining does not require a full rewrite or oversimplification of existing templates. Small, targeted changes can improve speed to contract, clarity of the agreement, and usability for both the legal/contract team and business team stakeholders.

Global capability centers have become a central component of many companies’ technology and shared services strategies. Unlike traditional outsourcing, GCCs allow companies to retain direct control over personnel, intellectual property, and delivery priorities—with this control, however, comes a significantly different legal risk profile.

Kari Krusmark, a partner in our technology transactions, outsourcing, and commercial contracts practice, is a leading advisor in complex technology initiatives, outsourcing arrangements, and digital transformation projects. With deep background guiding global companies through high-value technology deals, evolving regulatory requirements, and vendor ecosystem shifts, Kari has a unique perspective on how organizations should prepare for the rapidly changing technology and outsourcing landscape. Her insights highlight the key trends shaping 2026 and what businesses should be doing now to stay ahead.

The European Parliament recently published a report (the Report) on the interplay between several key EU digital regulations to assess overlap and gaps and highlight the regulatory complexity that these different regimes have collectively imposed on businesses.

Morgan Lewis’s technology, outsourcing, and commercial contract team, along with Boston Consulting Group, recently hosted a roundtable dinner in London, during which senior stakeholders from technology suppliers and large businesses discussed how the rapid evolution of artificial intelligence (AI) is impacting offshoring and outsourcing.

The European Supervisory Authorities (ESAs) published on November 18, 2025 a list of 19 critical information and communications technology (ICT) third-party providers (CTPP) that will be subject to direct oversight under the EU Digital Operational Resilience Act (DORA). The list includes hyperscale cloud providers, data center providers, infrastructure and network providers, and providers of financial services-specific technology.