One of the commonest practical problems I face is how to create a contract structure that efficiently covers a client's entire corporate group without drowning in paperwork. The answer is usually to create a framework agreement or master services agreement (MSA) - but even that route doesn't necessarily simplify things enough. More often, the better approach is to try not to "put a quart into a pint pot", as they say up in Yorkshire.

The key concern when contracting for multiple affiliates across a wide corporate hierarchy is typically to balance the need for centralised control with flexibility of local implementation.

The traditional approach used to be to rely on a single contract between the lead provider and customer entities and then have the local customer entities enter into back-to-back intra-group arrangements with the lead customer entity. Some large customers still prefer to follow this route. It has the advantage of strong central control, clear governance and visibility for both sides and provides a high level of consistency and a pretty high degree of contractual simplicity. The disadvantage is that this type of structure is cumbersome to address local differences, local customer entities have no direct contractual redress and it can lead to potential transfer pricing issues at a local level. It also doesn't work well with non-EU data transfers under model contract clauses, where the expectation is that each transferring affiliate will sign the standard clauses on data transfer.

To address this, occasionally one sees the position "simplified" by the removal of the central customer entity so that there is a lead provider entity contracting separately with each individual customer affiliate that needs to receive the services. But, as I've written before, some apparent simplifications raise more problems than answers. In theory, this at least provides local flexibility and direct contractual redress for the customer entities. However, it does make change control problematic and it runs a very high risk of lack of consistency - or, at least, relies on the provider as proxy to ensure consistency and control amongst the different customer entities. It also scales pretty poorly as new customer entities come on board.

For that reason, many organisations now put in place global MSAs or framework agreements between a supplier and a lead customer entity and then call-off contracts between the supplier (or, indeed, supplier subcontractors) and local customer entities. The framework arrangement will determine the form and content of the call-off contract.

This structure provides strong centralised control over core issues - although there is still a need to be vigilant for attempts at local renegotiations. The MSA/call-off structure also provides significant flexibility where needed for local entities, for example to deal with mandatory local variations, and its' easy to add and remove sites. It also is potentially more tax-efficient and facilitates local billing.

The downside of MSAs is that it can seem to create an unnecessary degree of contractual complexity, especially if one has a series of documents ranging from global MSA, to local call-off, to statement of work, to specification documents referencing the central scope of work.

As parties get more experience with global MSAs and call-offs, my observation is that these documents are on the one hand becoming more efficient - as companies get used to wording which centralises control over key issues of costs, performance and commercial risk - and at the same time more complex as parties try to shoehorn more service types within a single document set.

My preference would be to accept that it's not a bad thing to have multiple global MSAs between the same parties and that one can centralise a set of legal terms and impose those separately on difference service types through different global MSAs.