Questions to ask anyone offering to sell your firm’s data
More companies are now offering to sell business records to AI developers on a firm’s behalf. Some are experienced and careful. Others are new to the work. You can tell them apart by asking plain questions and reading the answers closely.
Sellers have reason to be wary. Some intermediaries quote a price before they have seen anything, then go quiet once it becomes clear that deals take months to close and pay out after 90 days or more. A few direct questions early on save a firm weeks of effort and protect its client relationships.
Use this list with any intermediary, including us. A good one answers each question in writing without fuss. This is general information, not legal advice. Your counsel should review any agreement.
Who are you, really
What is your legal entity, where is it located, and how long have you operated? You should get a registered company name, a physical address and a person you can call. A short history is fine if the company says so. A website and a mobile number are not enough.
Can I speak with firms that actually closed a deal through you? Closed means signed and paid. A good answer is a few names you can phone, with permission already given.
Who pays you
Does the buyer pay you as well? If a buyer pays the intermediary, the intermediary has two clients. A good answer is a clear no, or a disclosed amount that is credited against your fee.
Is your fee in writing before I share anything, and what do you earn if no deal closes? Ask for the percentage or the formula and the event that triggers it. A good fee is stated in an engagement letter and paid from proceeds. Upfront retainers move the risk to you, and with no deal the right answer is nothing.
Who are the buyers
Which buyers will see my listing, how are they vetted, and is this a competitive process or one buyer? Names are best. If names cannot be shared before an NDA, ask for the vetting criteria and a count. One bid gives you nothing to compare against, so a good answer describes how several buyers are invited and on what timeline.
What leaves our servers, and when
Do you need samples or exports before an NDA is signed? Nothing should leave before one. A good answer is that the firm shares only a description of its systems and record types at the start.
Who removes names and personal data, and how? Ask for the method, who checks it and what is done with the raw files afterward. Cleaning should be done by a named party with a review step. A bare claim of automation is not an answer.
Where is the data stored, and does it stay in the US? Ask for the storage location, who has access and when copies are deleted.
License terms
Is the buyer’s use limited to model training, or can it resell or sublicense the records? Narrow use is easier to defend to your clients. If resale is allowed, ask for a share of it.
How long does the license run, and what happens at the end? A fixed term with deletion or return of the data at the end is a good answer. Ask whether you can verify deletion.
What does exclusivity cover, and for how long? Exclusivity should be limited by record type, buyer category and time, and priced separately from the base license.
Do I get audit rights, and what do the liability caps say? You want a way to confirm the buyer follows the license. Read who is liable for what, and check any cap against the size of the deal.
Money
When am I paid, by whom, and how long does a deal take from first call to payment? Payment should come from the buyer or an escrow, on dates written into the license. Ask whether the intermediary holds any of your money along the way. Honest timelines run 60 to 90 days or longer, because buyers review the records, counsel reads the terms and finance schedules the payment. Anyone who promises a fast payout is guessing.
Insurance and contracts
Who is your professional liability carrier, and have you told them? Some policies have conditions on data licensing. Ask your broker before you sign anything.
Which of my client contracts contain confidentiality clauses? Many AEC agreements restrict what a firm may do with client information, even after names are removed. The intermediary should ask this of you. A good process has your counsel read the key contracts first and set what is out of scope.
If something goes wrong
What is the notice period if there is a breach, and who indemnifies whom? You want prompt written notice and a buyer who stands behind its handling of the data. Have your counsel read this clause line by line.
How to use the list
Not every answer has to be perfect. A new company may have no closed deals yet, and that is acceptable if it says so and shows how it protects you in the meantime. What matters is that the answer is specific, that it can be put in writing and that it does not change when you ask a second time.
Send the questions by email and keep the replies. Short, specific, consistent answers are a good sign. Slow, general or shifting answers tell you something too.
Archeon answers every one of these in writing, whether or not you hire us.