Explainer of Laws

Incentive alignment

Incentive Alignment

 
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More Than “Yes”

Closing a deal isn’t just a matter of getting the best price. When you’re developing an ongoing business relationship, it’s crucial to build in an incentive structure that keeps everyone’s interests aligned in a long-term way. Sometimes, what you need isn’t just a lawyer to draw up the paperwork — it’s someone who understands your business, and the business you’re partnering with, well enough to structure your deal so you both come out ahead.

Any good contract will outline the best- and worst-case scenario for your business relationship. But a great contract will be set up to actually make the former more likely and the latter less. That means figuring out how to make sure that you win together and that neither of you wins at the other’s expense.

Equal parts legal advice and business coaching, an incentive alignment will help eliminate any perverse incentives and build in virtuous cycles — all specifically tailored to the unique circumstances, goals, and concerns of the businesses involved.