Representation of Channel Partners/VARs
I represent numerous large and small channel partners (also referred to as agents) and value added resellers (VARs) in their transactions with master agents and service providers, including carriers, data centers and cloud services (XaaS) providers. My membership on the board of advisors of Channel Partners gives me a global perspective on the opportunities and challenges facing the industry. I use that perspective to help my clients build their businesses.
My clients range in size from single person shops to firms with an international clientele and annual billings in the tens of millions of dollars. The services they sell run the gamut from consumer long distance voice to gigabit and data center capacity for the largest Internet-based businesses in the world, to all flavors of new cloud-based offerings. Regardless of its size, each client gets my best efforts across the entire spectrum of issues crucial to it, including:
- Non-circumvention, non-competition and non-solicitation duties
- Ensuring prompt and accurate calculation and payment of commissions earned (including enforcement of contract rights where necessary)
- Service level agreements (SLAs)
- Customer ownership and transition issues
- Quota and revenue commitments
- Mutual confidentiality requirements
- Audit rights
For both VARs and channel partners, the movement to the cloud creates a whole new set of business and legal issues. VARs are used to dealing with the technical aspects of selling equipment, and their business model generally involves a single up front payment. In the new environment, VARs need to adjust their business model and to understand the level of risk involved in a host of new issues. These include privacy policies, acceptable use policies, terms of service and SLAs. Sometimes, the VAR or channel partner has to consider accepting a higher level of risk than it is used to in a transaction. In this rapidly changing industry, the legal and business counsel of an experienced attorney is particularly crucial. The devil is in the details, and the terms of a contract can be the difference between a profitable long term arrangement and a business disaster.
Unfortunately, disputes are a common occurrence in even the best business relationships. If necessary, I also represent my clients in arbitration and litigation, bringing to bear both my litigation experience and my telecom expertise. Recent projects include two highly successful AAA arbitrations between channel partner clients and international carriers. If I am not admitted to practice in a particular state, I can still work with local counsel to defend the client’s interests. In recent years, I have worked with local counsel in client litigation in California, Virginia, Mississippi, Massachusetts and Florida.
Typical Channel Partner/VAR Projects
One of your key carriers has been acquired by a larger carrier that has a different commission structure and different philosophy about channel partners. The new carrier ignores the language of your contract with the key carrier and reduces your commission payments on existing customers, or just stops paying commission. What should you do?
Your VAR business is expanding into the cloud and you have been approached by other agents about entering into either a relationship where they sell under your umbrella, or a partnering/teaming sales arrangement. You need a template agreement that protects your interest and gives both of you an incentive to work together to grow the business.
You are expanding your product line to include data center space and services. Three data center owners have sent you their standard sales partner agreement. You need a lawyer who can effectively and efficiently review the contracts, amend them to protect your interest, and help you build your business.