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How This Popular Church In Austin Got Out Of Its $165K Contract With a Shady Copier Dealer

Ghostwriting-as-a-Service Case Study

· Case Study,Contract Management,Inbox-Sync,Veeto,Ghostwriting

In 2015, a Texas copier dealer walked out of an Austin church with a two-page contract in hand. That contract said the church owed $165,000 over the next 5 years for lease of five copy machines. To the church, this meant now being able to print Sunday programs in house. But to person holding the contract, it meant fraud well done.

Years later, in November 2018, the church's associate pastor made a troubling discovery. A salesperson from another local copier company showed up in the church office one day hoping to pitch his company's services. When the salesperson looked over the receptionist's shoulder, he could see the five copy machines the church was currently using. He went straight for the pitch: "mind if I give you quote for comparable machines from my company?" The associate pastor agreed, just to be nice to the salesperson, really.

Within minutes, the salesperson had drawn up the quote and handed the one-page proposal to the associate pastor. The associate pastor was shocked: the quote was for newer, better machines, and was still almost half the price of the church's current contract.

It just so happened that, at that time, the church had recently encountered some financial hardships. Before the salesperson even walked in that day, the associate pastor, along with the church board, had already realized that they were probably going to have lay off someone from church staff, just to stay afloat.

It was in that context that the salesperson's quote shocked the associate pastor. It was not so much incredulity that shocked him, that one dealer's price could be so much lower than the other's. It was that the effect of paying that lesser amount would be not having to lay someone off. At the salesperson's rate, the church's financial hardships would immediately cease.

The salesperson's rate was clearly good. But was it too good to be true?

The next day, the associate pastor contacted four other copier dealers to request comparative quotes. His objective was to figure out if the salesperson's quote was credible. Because the salesperson's quote was so much lower than the church's current rate, the associate pastor wanted to use the four other quotes to determine which price--the current price or the salesperson's quoted price--was not in line with all of the others.

When the four other quotes came over later that day, the associate pastor laid them each out on the conference table, side-by-side. He later told me that "it was like looking at five apples and one orange." It was clear which price was anomalous: it was the current price! All five of the other quotes were fairly close to one another, but the price the church had been--and still was--paying was almost double any one of the other quotes on the table.

As they say in church when they get righteously indignant...he needed to find out what the heck was going on.

The associate pastor called the copier dealer holding the 2015 contract to ask about the current rate. At first, the dealer insisted that the current rate was the "market rate." The dealer bolstered this statement by detailing all of the dealer's supposedly high costs to "service" the machines and provide customers with responsive service, a much higher quality of customer service than any other copier company, the dealer claim. The associate pastor then reminded the dealer that the church's five copier machines had not been serviced in over a year, and that the church had not placed a customer service call to the dealer in almost two years. Despite these rebuttals, the dealer did not seem to yield on the "our prices are high because our services are superior" narrative.

Then the associate pastor pulled back the curtain. He revealed the five other quotes that showed the dealer's rate to be exorbitant and anomalous, to quite simply be not the "market rate." The associate pastor later told me that he could hear the dealer's face turning red with anger. Did the associate pastor just catch the dealer in a lie? The phone call ended moments later when the dealer apparently ran out of sales scripts to say.

A few days later, the associate pastor called the dealer again. This time, he had a proposal for the dealer. The church was primarily interested in reducing expenses to avoid having to layoff staff. So, "would you be willing to reduce our rate to be in line with these other quotes?" The dealer, again citing the relatively high cost of its "superior service business model," said that reducing the rate would be impossible.

...unless, that is, the church would be willing to sign a new contract for another five years.

The associate pastor took the dealer's counter-proposal back to the church board for review. While the church appreciated the chance to reduce the rate, they cautioned against extending the church's contractual relationship with the dealer. Specifically, the church board wondered what else the dealer might have been hiding, given the dealer's usurious rates and slippery objection-handing when presented with actual data. So, at the direction of the church board, the associate pastor went back to the dealer to decline the counter-offer to sign another contract.

But the church still wanted the dealer to reduce the rate. The dealer did not budge, and in fact, within weeks, the dealer went from the salesy mode of trying to "upsell" the church in response to the church's complaint to the bully mode of, "what are you going to do about it? you're locked into a contract for another $110,000."

At that point, the church hired Veeto to figure out the best way to end its contractual relationship with the dealer. What the church did not expect, however, is that Veeto would find a gaping loophole that would permit the church to terminate the contract immediately without penalty.

(But...bottom line on top: that is essentially what happened. I'll continue.)

For context, Veeto is a legal service that helps (mostly) executives, freelancers, and professional service providers (such as attorneys) get out of bad contracts. When Veeto takes a case, the first step is always to take inventory of the facts:

  1. What happened that shouldn't have happened?
  2. What didn't happen that should have happened?
With the facts ascertained, the next step is to devise an overall "case strategy" for achieving the desired objective, which, in this case, was to get out the copier contract and avoid at least some of the remaining $110,000 of obligation.

Then, Veeto spends the rest of the case "quarterbacking" every move: creating the case assets such as the opening demand letter, negotiating with the opponent, and eventually to execute a settlement resolution of the case. During the Veeto engagement, there will be several communications with the opponent, and Veeto designs each case strategy to push all of that communication exclusively to email. This has a number of advantages, one of which is that it allows the client to actually let Veeto ghostwrite all communications with the opponent directly.

How does that work exactly? Veeto has a service called Hubscriber, which, at its core, consists of two primary features:

  1. We sync directly with your inbox, such that we received directly all emails your opponent sends you.
  2. We ghostwrite replies, as you, again, because we are synced with your inbox.
Sometimes people use Hubscriber as a supplemental service during a Veeto consultation, usually because they like the greater efficiencies of having a legal assistant directly in their inbox to field emails from a given case's opponent and then reply back to that opponent directly, without the client needing to be the middleman.
(Although it's irrelevant to this case study, note that other people use Hubscriber as a standalone way to let the "legal assistant in your inbox" manage all of the vendors/contract/purchases/services with an email connection to that client's inbox. In contrast to a single Veeto engagement, Hubscriber for this purpose is more of an "ounce of prevention is worth a pound of cure" way to make sure everything is taken care of all the time and that nothing snowballs into a bigger legal issue--such as being stuck in a $165K copier contract with a shady dealer.)

When the church hired Veeto, they elected to add-on the Hubscriber service. So not only was Veeto devising the entire case strategy, creating all of the case assets, and driving negotiation, but they were also ghostwriting all email correspondence directly with the opponent (and, later, the opponent's bank and attorneys). This proved invaluable in the case, because Veeto was able to teasing certain details and contradictions out of the opponent, through a protracted sequence of email exchanges, that eventually served to preclude any breach of contract claim the dealer might have had before Veeto stepped in.

Over a period of six months, through Hubscriber, Veeto was able to systematically defeat the dealer, the dealer's bank, and eventually the bank's lawyers. For sake of confidentiality, I won't go into too much detail here. But I will say that the bank is one of the top ten largest banks in the US (by assets under management), and the attorney who the church eventually hired to close out the case with a motion for summary judgment said, "this is the most organized case I have ever received." He was referring to the mountain of evidence Hubscriber had generated through ghostwritten email dialogue with the opponent.

Now, I began this case study by characterizing the Texas copier dealer as "shady," and although I've provided a couple of details of the dealer's--shall we say--sales ambitions, I have really not yet told you any of the details that make the moniker "shady" unequivocally deserved. So, I will end this case study by blowing your socks off with some zingers:

  • The shady dealer told the church that it was actually another company, one of its more reputable competitors.
  • So the 2015 contract was actually between the church and some other dealer it had never met.
  • But the dealer who perpetrated the fraud later sold the contract to the top-10 bank I mentioned above, and again, presented itself to the bank as the dealer's more reputable competitor.
  • So, the dealer defrauded both the church and the bank, and cost the bank in particular over $100K.
  • This is why the dealer was so adamant that the church sign a "new agreement" in 2018, because the dealer knew the 2015 agreement was not really enforceable, to the extent that it was fraudulent.
Most importantly, the church was unaware of any of these "smoking guns." Veeto later found them during the initial fact-finding phase and then over the several months of Hubscriber email dialogue with the dealer, the dealer's bank, and their attorneys. This is why Veeto + Hubscriber can be such a powerful combination, even if the Hubscriber inbox-sync is only for the purpose of ghostwriting communication with one opponent on one case. You might just save $110,000.
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