Tech & Sourcing @ Morgan Lewis

Please join us on Wednesday, February 8, 2023, at 12:00 pm–1:00 pm ET, as Morgan Lewis partner Peter Watt-Morse and associates Katherine O’Keefe and James Mulligan discuss issues unique to Anything as a Service (XaaS) agreements and important factors for service providers and their customers to consider.

As we reach the end of the year 2022, we have once again compiled all the links to our Contract Corner blog posts, a regular feature of Tech & Sourcing @ Morgan Lewis. In these posts, members of our global technology, outsourcing, and commercial transactions practice highlight particular contract provisions, review the issues, and propose negotiating and drafting tips.

In a recent LawFlash, a team of Morgan Lewis lawyers reviewed the US Securities and Exchange Commission’s proposal for a new rule and rule amendments that, if adopted as proposed, would require registered investment advisers to meet certain requirements when outsourcing “Covered Services.” The rule includes heightened requirements for due diligence, monitoring, and reporting, including amendments to Form ADV.

In any service relationship, continuity of service provider personnel often impacts service quality. Excessive personnel turnover on an account can negatively impact day-to-day operations and the ability to respond to issues. Assignment and management of personnel are primarily business issues that are the responsibility of the service provider. However, there are important provisions that can be included in service agreements that can help address these issues.

IT service provider performance has long been measured by service level agreements (SLAs) that set quantifiable standards for many aspects of a sourcing arrangement. These standards range from how quickly customer support is provided and an incident is resolved to application uptime and availability, and beyond.

In outsourcing, technology, and commercial transactions, cost of living adjustment (COLA) mechanisms linked to price indices are coming under increasing scrutiny with current global inflationary pressures.

With the COVID-19 pandemic, many industries experienced a major shift in how the personnel of key suppliers worked, with “nonessential” personnel in large part working remotely. When this shift to remote work first happened (rather abruptly for many companies), security was a critical consideration, but one that was handled in many instances outside the supplier contract, with both parties focusing on keeping business operations going with must-have data and security safeguards in place.

The COVID-19 pandemic introduced unprecedented challenges, requiring companies to adapt quickly to the way their personnel work, changes in their business offerings, and how they interact with their customers and suppliers. With some time to adjust to the “new normal” of the pandemic (and hopefully soon, the post-pandemic), many companies are looking ahead—with a potential economic downturn being top of mind.

Emily Lowe and Ben Klaber recently presented a webinar on key contracting considerations in life sciences supply chain and manufacturing transactions as part of Morgan Lewis’ ongoing Digital Disruption and Innovation webinar series.

The UK government is considering responses to its proposed reforms to auto-subscription rules for consumer contracts, as part of a broader consultation on reforming UK competition and consumer policy.