Quality Delegation Services / Setting up

Due diligence before the agreement, not after

The leverage disappears the moment it is signed.

Everything worth knowing about a prospective partner is easier to establish before an agreement exists. Afterwards the questions become awkward, the commercial relationship is running, and the cost of walking away has risen for both parties.

The checks worth doing are ordinary: who owns and controls the entity, what its trading history is, whether it or its principals have had regulatory findings, what other arrangements it holds and with whom, and whether its stated capacity is real.

The last one is regularly overstated. A partner claiming capability in a field should be able to name the people who will deliver, and those people should exist and be available. An arrangement entered on the basis of intended recruitment frequently begins with delivery by whoever was available.

It is worth asking what other principals they work with, and where possible speaking to one. Partners operating several arrangements simultaneously are managing competing obligations, and knowing the shape of that is relevant to how much attention yours will receive.

Where a prospective partner is reluctant to answer ordinary questions about ownership, staffing or other arrangements, that reluctance is information and it is cheaper to act on now than to discover the reason later.