COVID-19 is a bummer. For lots of important, painful reasons. One of the less important reasons is that it prevents us from convening the legal echo chamber in person. Exhibit A: early last month, ILTA communicated the difficult decision to cancel its flagship annual convention, ILTACON, and replace it with a “virtual experience” called ILTA>ON.
The problem is it had already sold a boat load of sponsorships to legal technology companies for the traditional ILTACON event (which it had assured members and sponsors was happening–at the Marriott in Nashville–well into April). No big deal, right? Just give everyone their money back (potentially less any non-refundable actual expenses already incurred by ILTA). That’s certainly what you’d expect to happen in connection with an event cancelled as a result of forces beyond anyone’s control. It’s also what you’d expect to see in a sponsorship agreement before someone agreed to shell out thousands of dollars for an in-person convention with all the trappings and networking/busdev opportunities.
That’s why we weren’t remotely surprised to discover the ILTACON sponsorship agreement contains just such a provision:
Force Majeure: Sponsor agrees and understands that in the case that performance of this Agreement, in the customary manner, shall be prevented, hindered, or delayed by any event not within the control or caused by the fault of either Party . . . this Agreement shall terminate and Sponsor shall and does hereby waive any claim for damages or compensation except the pro-rated return on the amount paid after deduction by ILTA of actual expenses incurred in connection with this Agreement up to the time of termination, and there shall be no further liability on the part of either party.
What we WERE shocked to discover, however, was that ILTA decided to keep everyone’s money and tell them “no refunds.” I mean, it’s pretty hard to argue that performance of the agreement in the “customary manner” wasn’t hindered by cancelling the physical event in favor of a virtual one when the Sponsorship Benefits from the Sponsorship Agreement led with things like “10×10 Booth in Exhibit Hall” and reserved hotel rooms at the conference venue. It’s also pretty hard to disagree with the fact that the value of sponsoring a virtual event pales in comparison to that of an in-person convention, not to mention that the cost of putting on a virtual event is a small fraction of an in-person trade show. (Note, we haven’t heard from ILTA that their position was motivated by the fact that they’re on the hook for x amount of non-refundable deposits. While we doubt that would justify retaining full sponsorship payments, I’m sure the sponsors would understand ILTA deducting some amount for expenses it can’t recover–as the force majeure clause specifies.) It actually kind of shocks the conscience that ILTA would think it could get away with automatically converting sponsors’ ILTACON sponsorship into an ILTA>ON sponsorship at full cost under threat that their only alternative was to walk away and flush the money down the drain.
As you can imagine, there were cacophonous cries of protest from the vendor/sponsor community, which–we’d be remiss to not highlight–includes a swath of small companies under the same pressure as virtually all businesses right now: scratching, saving, and stretching trying to stay afloat during this time of crisis… except with way less slack, less cash, and probably little to no recourse.
We were heartened to learn that ILTA would be revisiting that decision. Unfortunately, our faith was misplaced.
Offensively styled as a “we heard you and are taking action”-type message, ILTA CEO Joy Heath Rush sent sponsors the message pasted below. Read it for yourself and draw your own conclusions, but we want to make three key observations:
- First, it completely ignores the Sponsorship Agreement’s force majeure clause and ILTA’s contractual obligation to refund the sponsors. Not a peep. I mean–if you want to argue the provision doesn’t apply to the facts at hand (and can do that with a straight face), go nuts. Give it a try. But simply staying silent and pretending it doesn’t exist? Cowardly.
- Second, it laughably asserts that ILTA is entitled to keep the first $5,000 of all sponsorship payments (the equivalent of ILTA’s Bronze sponsorship), claiming this is “the cost for full access to ILTA year-round services (we internally call this ILTA 365).” Leaving aside the fact that ILTA offers a “Basic” corporate sponsorship package and that package is $500 (not $5,000), Heath knows full well that the sponsors who purchase booths at ILTACON would not be purchasing the so-called “year-round services” for $5,000. Here’s a fun exercise. Go to ILTA’s online sponsorship directory and see how many companies in the market thought those benefits were worth paying $5,000 for on a standalone basis. It’ll be fun. (If you’re too lazy, the answer is two.)
- Finally, for the balance of most sponsorship payments (remember–less the $5,000 that ILTA is simply keeping despite sponsors never agreeing to anything of the sort), instead of refunding the money to the cash-strapped, crisis-pressured vendors, ILTA is keeping the money and allowing vendors to simply apply it as credit to future annual sponsorships. And here’s the kicker. (Almost funny, if it wasn’t so cynical.) You can only credit your balance a third at a time. So if you’re a vendor who bought a booth for ILTACON 2020 and (quite reasonably, in our opinion) decide you can find better ways in the middle of a pandemic to spend $10K than posting your logo on a webpage nobody cares about, ILTA will (sorta) make you whole…in 2023. And only AFTER you pony up for, at a minimum, Silver Sponsorship for the next three years. So the math for a current Silver Sponsor to get back their $7,500 (again, less the $5,000 for ILTA 365 which LITERALLY NOBODY WANTS on any of the 365 days of the year) is $30k over 3 years.
What ILTA is doing to its so called vendor “partners” is unconscionable. And the vendors probably won’t assert their contractual rights because they’ll be worried about poisoning the well of goodwill. They shouldn’t have changed the event name this year because 2020 really puts the “con” in ILTACON.
Dear ILTA Silver, Gold, and Platinum Sponsors,
As much as we all wish the situation were different, we are living through unprecedented times. As businesses, we are trying to retain customers, add value, conserve cash, and position ourselves for a future we cannot predict. That is true of ILTA, our members, and our sponsors.
The events of 2020 have created many opportunities – which we are all striving to embrace – as well as many challenges – which we are all trying to overcome. Both are best done together. ILTA>ON represents both opportunities and challenges. In addition, ILTA recognizes that we need to do more to welcome business partners into the ILTA community and integrate business partners more fully into ILTA’s programming and networking activities.
In June, we announced ILTA’s approach to Corporate Sponsorships and ILTA>ON sponsorships. Since then, we have participated in numerous one-on-one conversations with ILTA sponsors, in addition to several meetings with ILTA’s Partner Advisory Council (PAC). We have appreciated your supportive emails and phone calls and have valued the specific questions you have asked.
Based on feedback, we have updated our approach to 2020 sponsorships – corporate and ILTA>ON. The revised policy appears below. The document is somewhat lengthy to ensure we answer as many of your questions and address as many of your concerns as possible.
Because we understand that many of you needed more information in order to confirm your participation in ILTA>ON, we have extended the commitment deadline to July 31. If you do not indicate your desire to participate in ILTA>ON by July 31, we will take that as your wish not to participate.
As of today, we have 25 confirmations* from companies that will participate in ILTA>ON. We want to thank you for your continued support! Those companies are: (*list current as of July 17)
Digital Defense, Inc.
Page Vault, Inc.
Speech Processing Systems
Juralaw by Law Bulletin Media
Tikit, An Advanced Company
Micron Systems, Inc.
Traveling Coaches, Inc.
Mobile Helix, Inc.
Please do not hesitate to reach out to me, Jason, or Corey with any additional questions or concerns.
What We Heard: Sponsors are trying to manage out-of-pocket marketing spend in 2020 and 2021.
What We are Doing: Costs for sponsorships, including corporate and event-specific sponsorships, will be held at 2020 levels for 2021. NOTE: This pricing applies only to 2020 paid sponsors. It does not apply to unpaid 2020 sponsors or to sponsors new to ILTA.
Any sponsors who renew at their current level and pay in 2020 for their 2021 sponsorship will receive an additional discount of 10% on the cost of the 2021 corporate sponsorship.
Those who participate in ILTA>ON will receive unlimited sponsor staff badges to attend ILTA>ON; there will be no additional badge charge. This includes access to all educational sessions except those marked as closed, e.g., Corporate Law Department Roundtable.
What We Heard: ILTA needs to provide sponsors a better option for those who do not wish to participate in ILTA>ON.
What We are Doing: If you do not wish to participate in ILTA>ON, one hundred percent (100%) of the cost of your paid sponsorship for 2020 (less $5,000 – see explanation below in italicized paragraph) will be credited back to you. These credits can be applied to the cost of your annual corporate sponsorship and will be provided at the rate of one-third (1/3) per year for three years (2021, 2022, and 2023) as long as you participate at a Silver level or higher.
For example, for a 2020 Silver Sponsor not wishing to participate in ILTA>ON, $7,500 will be credited to you in the form of $2,500 each year for 2021, 2022, and 2023. Therefore, the cost of a Silver Sponsorship for 2021 would be $10,000 or $9,000 if paid in December 2020.
The 2020 cost for full access to ILTA year-round services (we internally call this ILTA 365) is $5,000 per sponsor company. This is expressed in the form of a Bronze sponsorship; it includes no sponsor access to ILTACON/ILTA>ON. This is comparable to member dues for ILTA’s large law firm member entities, who pay up to $6,300 annually; we already announced that will increase for 2021. Registration for ILTA events is a separate cost for participants from member entities.
We have added benefits to the ILTA 365 program and will continue to work with our sponsors on ways to add year-round value. One frequent request has been for a “matchmaking” service (often referred to as a hosted buyer program). We have already started gathering requirements for such a program and talking with potential suppliers.
What We Heard: The major benefits of Gold and Platinum sponsorships relate to ILTACON as a physical event.
The first sponsorship level that includes ILTACON elements is a Silver sponsorship at $12,500. A Gold sponsorship is $17,250 and Platinum is $33,750. Each level brings additional benefits tied to ILTACON as a physical event.
With ILTA>ON being virtual, the cost to participate is equal for all companies. The benefits for Gold sponsors and above cannot be fully actualized as things such as booth position, increased booth size, and lottery placement are not applicable. This means the participation/access fee for ILTA>ON is $7,500 for all sponsors.
Additionally, we have been asked to revisit the price for Bronze sponsorship. We will revisit that in 2021 for the 2022 sponsorship program, and we will incorporate sponsor representatives in that discussion.
What We Are Doing: For Gold and Platinum sponsors wishing to participate in ILTA>ON, any sponsorship cost above the Silver level ($12,500) would receive a credit of one hundred percent (100%) of that amount above the $12,500 ($5,000 for ILTA 365 – see explanation above in italicized paragraph – and $7,500 for ILTA>ON). Credits can be applied three ways: 1) to the cost of your annual corporate sponsorship and will be provided at the rate of one-third (1/3) per year for three years (2021, 2022, and 2023); 2) to ILTA>ON 2020 “add-on” sponsorships; or 3) a combination of 1) and 2).
Therefore, for example, for a 2020 Gold Sponsor not wishing to participate in ILTA>ON,$17,250 less $5,000 = $12,250 will be credited to you in the form of $4,083 each year for 2021, 2022, and 2023.
For a 2020 Gold Sponsor wishing to participate in ILTA>ON, $17,250 less $5,000 less $7,500 = $4,750 will be credited to you in the form of $1,583 each year for 2021, 2022, and 2023. Alternatively, you could apply $4,000 to an ILTA>ON Master Class, then receive a $4,750 less $4,000 = $750 / 3 = $250 credit for the 2021, 2022, and 2023 corporate sponsorships.
IMPORTANT: Access to the “add-on” sponsorships will be made available on a first-come, first- serve basis.
What We Heard: Sponsors for 2020 may wish to change their sponsorship level in 2021.
What We Are Doing: Paid 2020 sponsors are eligible to change their sponsorship level either up or down for 2021. Those wishing to maintain their sponsorship level or raise their sponsorship, e.g., Silver to Gold, will be eligible for the 10% discount for payment in December of 2020. Those wishing to lower their sponsorship, e.g., Gold to Silver, are not eligible for the 10% discount for payment in December of 2020. Sponsorships may also be upgraded at any time during calendar year 2021.
What We Heard: Business partners constitute a significant revenue source in support of ILTA services. Therefore, business partners are entitled to more involvement in ILTA. Some specific asks from business partners have included business partnership participation on the 2021 ILTACON planning committee, improved communication between the PAC and the ILTA Board (up to and including a business partner representation on the Board), and greater access to the ILTA e-groups/communities of interest.
What We are Doing: In January of 2020, the PAC and the ILTA Board met in person and engaged in substantive discussion. Since then, one of the Board members has been appointed to serve as a liaison to the PAC.
In June of 2020, we announced the Industry Participant role which enables those business partners who are industry SMEs to participate more fully in ILTA discussions. We are already accepting and reviewing applications for Industry Participants.
In 2019 and 2020, business partners have served on the ILTACON Europe planning committee, Membership Task Force, 2020 Tech Survey Committee, Scholarships, and Awards Committees, and the Diversity and Inclusion Task Force.
It is our plan to add business partners to the ILTACON 2021 planning committee. Details to follow.
The Board and staff will continue to work with the PAC and our entire sponsor community on ways to integrate business partners more fully into the ILTA community.
My name is Mark. I’m an ILTA member, sometimes volunteer. I’m the I.T. Director for Kegler, Brown in Columbus, OH. I’ve been here 28 years. The issue herein is new to me. I haven’t communicated with any other ILTA members or staff other than having this brought to my attention. If any of my vendors are dissatisfied then please contact me directly. I will gladly speak with you. Some of the issues herein go well beyond the vendors and well beyond ILTA. Does force majeure apply if the venue is open and we are legally allowed to meet? ILTACON was\is in… Read more »
Mark– Thanks so much for the thoughtful response. Given the time/effort you clearly invested, we wanted to respond to the points you make. We also appreciate you sharing your view that some of the language transcends the candid, snarky, and even acerbic messaging for which this blog is supposed to provide a forum into the realm of personal attack. That was certainly not the intent. (Some of us who have chosen to contribute to LTC know and like Joy, personally.) We’ll take a second look at whether there’s language we can dial back to keep the tone within its intended realm:… Read more »