| To reduce the amount of time, money and stress that normally accompanies any change in MLS vendors, Real Estate Associations should select an effective team to manage the transition from a Legacy System to a new MLS vendor. With advance planning and careful selection of the members of that team, any Real Estate Association (the AAssociation@) will be ready to negotiate effectively and efficiently. The team that will manage the MLS vendor transition (the ATeam@) should have three Aplayers@: (1) The MLS B Identify a small group from the Real Estate Association itself, basically a Adatabase management task force,@ comprised of four to five people, including the MLS=s Chief Executive Officer. These people should have a solid grasp of database technology and the needs of the subscribers to the MLS. These players are the voice of the MLS Subscribers and the MLS itself. (2) The Technology Consultant B Select a competent outside technology consultant. This person should be well-versed in the business and technical aspects of MLS database systems and should be able to understand, address and define the functionalities. With that expertise, the consultant could provide a needs assessment, develop a meaningful request for proposal to be sent to prospective vendors, and evaluate the responses. Essentially, the outside consultant is a Apoint@ person between the vendor=s technical representatives and the Association who acts on the Association=s behalf. The consultant is the technology advisor on the team who will advise the parties about the desired functionality of the new MLS system, how the system will achieve that functionality, how quickly the system should be expected to perform the desired functions, and how the members should be able to perform the desired functions (i.e., the mechanics) on the system. (3) The Attorney B Select an attorney who has sophistication and expertise in software licensing with a concentration in database software licensing. Ideally, such an attorney would be knowledgeable about intellectual property, corporate and contract law. The attorney should also be thoroughly familiar with the operations of an information database and the need to protect the integrity and proprietary nature of a database. The attorney should also understand thoroughly the various legal techniques for protecting data integrity such as database, copyrightability, and data confidentiality and use restrictions. The attorney should be the Association=s representative on all matters relating to the content of the license agreement. It may surprise you how early an Association should start preparing for the MLS vendor transition. An Association needs to have a clear strategic plan before it consults with a vendor, which means that an Association should identify its consultant and its attorney before it ever meets the vendors. The value of being prepared will be obvious to the Association at each stage of the transition. By the time the Association meets with prospective vendors, it should have set its expectations, prioritized its needs, and identified its Anegotiable@ and Anon-negotiable@ contract terms. When the Association later meets the vendors, it will have a clear understanding of its needs, and can be direct, firm and impervious to persuasion or seduction by a vendor. Thus, by preparing early, the Association avoids the frustration of conceding on fundamental contract provisions or accepting reduced vendor warranties or performance commitments because the vendor knows the Association has no realistic alternative but to accept the system on the vendor=s terms. A large part of preparing for the early stages of transition, or the Aneeds identification@ stage, is to listen to all the players on your Team. The MLS will identify what the subscribers need and want. The competent consultant will identify what you can and should get. The attorney will make sure that you will actually get what you bargain for. An Association should identify an attorney early on. The attorney could then review the Association=s needs assessment and Request for Proposal (or the ARFP)@ to ensure that the Association is soliciting information from potential vendors that will be relevant and important during the contract negotiation phase. The attorney should, with close interaction and communication with a competent consultant and a pro-active MLS task force, point out to the Association issues that, historically, have been potential minefields in other similar transactions, perhaps with the same vendor. The attorney could also explain the advantages and disadvantages of different approaches to guaranteeing vendor performance and adequate support after acceptance. In the agreement drafting stage, the Association has already identified a desired vendor. The Association does not, however, have to accept the vendor=s standard MLS Software and/or Hardware License Agreement (the AContract@) as the starting point of Contract negotiations. The Association should strive to control the Contract negotiation process. Traditionally, the vendor supplies the first draft of the Contract. Unfortunately, these Contracts are not often clear, coherent, or even completely on point because many of these Contracts are amalgamated versions of several contracts. Some of these Contracts contain provisions that appear, on their face, to be relevant, but in fact, are not (e.g., a Contract may contain information relating to web sites when a web site is not a component of the MLS database system.). By agreeing to accept the vendor=s contract form as the beginning point of the negotiations, the burden typically is upon the Association to significantly rewrite or redraft such Contract to be sure its interests are adequately protected. Ideally, the Association should be in a position to give the vendor its own Contract and have the vendor respond to that Contract. Developing its own Contract need not be difficult and costly for the Association. An Association does not need to draft its own Contract Afrom scratch@. If an Association identifies an experienced attorney as early as possible (even before the Association approaches any vendors), the Association can identify the terms it deems to be non-negotiable as opposed to those that would be Anice to have.@ One approach would be to have the attorney supply the Association with a draft Contract before meeting vendors. The Association could review and consider issues that the experienced attorney has addressed with other MLS vendors, and how those issues were resolved. An Association should be pro-active and not reactive by identifying an attorney early on in its vendor transition. During the Contract negotiation stage of the vendor transition, it is not unusual for the vendor to attempt to cast the Association=s attorney as the Abad guy@. A vendor may attempt to establish a relationship with the Association that excludes the attorney or minimizes the attorney=s input. An argument, for example, from vendors would be that the attorney=s job is to make anything that is simple, complicated. One must be careful to avoid allowing the vendor to drive a wedge between the Association and its attorney, or succeed in keeping the attorney excluded from the negotiation process. Generally, the relationship between a vendor and an Association is, as in many contractual relationships at their inception, one of rosy harmony where both parties are in a Acourtship@ stage. The thought of anything later going wrong seems overly suspicious and negative. But, from an attorney=s perspective, it is important for the Association to have clearly defined within its Contract what will happen should something go wrong in the installation, implementation or actual use of the database software. Specifically, there needs to be meaningful consequences to the vendor stated in the Contract if the System fails to meet contract specifications. The Association should also be concerned about its ability to go elsewhere on short notice once it has committed to a particular vendor and that vendor=s product. Whether it be difficult in terms of the financial investment, the installation time, the training time or developing the database management system, the transition is not a seamless or speedy transition from one system to another. History has shown that there are times when things do go wrong and unexpected events do occur. Thus, the Association needs some form of remedy, alternative, backup or option to address these contingencies. The best way to prevent potential mishaps down the road, and to make the transition smooth, is for an Association to form a Team in advance and, in so doing, to hire an experienced, competent technology consultant and an experienced attorney. The consequences of a MLS database system failing to function can mean that hundreds, or possibly thousands, of real estate agents whose livelihood depend upon the Association=s MLS database system, will be out of business. a) research the MLS vendor marketplace; b) retain a knowledgeable technology consultant; c) hire a Auser-friendly@ attorney; d) maximize the value of your professional advisors; e) establish time tables and allow adequate time to complete the process (Do not leave the negotiation to the last 48 hours before the present agreement expires.); and have viable alternatives if negotiations reach a stalemate. For example, when you go through the RFP process, determine if you have a close Asecond@ to whom you can turn if an impasse is reached with your Afirst-choice@ vendor. By following these guidelines, you will be the Amaster@ of the MLS vendor transition process, rather than a Aslave@ to forces beyond your control. |
