Agile Contracting & Why We Need it

Blog post
By Pam Ashby | 16 March 2018

How can we promote collaboration and flexibility whilst still creating the certainty that clients and funders will look for from an Agile project?

This was the opening question in last week’s webinar, when commercial lawyer Stewart James joined Jenny Bailey to talk about Agile procurement and contracting, and the DSDM Agile Contract Template.

Stewart pointed out the conflict between a contractual view that aims to fix firm positions from which the parties cannot deviate, and the more Agile viewpoint which embraces change. Clearly if the functionality of what’s being developed can’t be altered, this could seriously stifle innovation.

He also referred to the cone of uncertainty, which highlights that uncertainty reduces as a project progresses towards its conclusion. Positions fixed at the start of a project restrict the Agility and can lead to disappointment.

"Lawyers typically want to identify any risks and mitigate them," Stewart explained "which leads to entrenched position and avoidance of change. Essentially, the traditional approach to contracts simply doesn’t work for Agile."

What is the Agile Contract Template?

Talking about the Agile contract template, Stewart said it is a great source of guidance. "It sets out a basic model and explains how the parties can adapt it." Whilst it follows the DSDM Agile Framework, it can be used for all processes that are based on collaboration and flexibility. It can be adapted to suit any development lifecycle that progresses in an iterative way, and where timely customer feedback allows amendment of features and functionality.

A key factor is to allow for the scope of a project to change throughout its lifetime, and this is what the template does. It allows for a baseline for change, providing a mechanism to measure it and track the project’s evolution. "In drafting an Agile contract", said Stewart, "We encourage parties to embrace change but to record it through the process. Change always has consequences, so it’s important to prioritise regular feedback to end users and to involve them in the process. The ultimate aim is to meet the needs of the end user, so decisions can’t be made exclusively at an executive level; end-users also need to be empowered to make decisions."

The Issue of Intellectual Property

In an Agile project, where both parties are collaborating and contributing to the development of the product, the issue arises about who owns the intellectual property rights (IPR). "Whilst it’s technically possible to have joint IPR ownership," Stewart continued, "We usually advise against this because it creates a legally difficult outcome. Our advice would be to avoid joint ownership but to recognise wide license usage rights in the contract."

This webinar tackled the issues surrounding the need to reduce risk and seek certainty, against protecting the flexibility needed to respond to change and innovate. If you missed the opportunity to join in the live event, you can watch the slides and the recording here

Stewart is a commercial lawyer with over 20 years’ experience of drafting and negotiating technology contracts and is the author of the Agile contract template on behalf of the Agile Business Consortium.



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