How to improve your Contract Processes with Better Cooperation
Legal should focus on Better Cross-Departmental Cooperation
As we have highlighted in previous posts, it takes leadership and a team to improve your contract templates. Once Legal has taken the lead and the centralized responsibility to improve the contract templates, the next step is to involve and work together on this goal with other departments. The creation and use alone of contract templates will only offer limited benefits This is not only essential to receive all required input for the contract templates, but also for a successful implementation of the contract templates.
Legal professionals often limit their interactions to their Legal colleagues or senior management when creating and implementing contract templates or negotiating contracts. This limitation, while understandable, can lead to contract templates and agreed contracts that are legally sound but are missing critical business insights.
Additionally, as mentioned above, the complexity, inaccuracy and lack of processes will lead to the use of unauthorized or outdated templates and excessive Legal Review due to lack of internal processes and support from other departments.
Insight Integration: A Collective Approach on Template Creation
Therefore, aligning contract templates with the practical realities of the business is essential. Departments such as Sales, Products, Finance and Compliance offer invaluable insights on commercial and financial risks, practical considerations and the specificities of products or services offered by the company.
This input ensures that the contract templates are not only legally robust, but also fit in the commercial roadmap of the company and cover all other company risks (e.g. technical, compliance, operational and financial).
Another important reason to involve these departments in the drafting process of the templates is to create a sense of ownership and support from these stakeholders. When departments contribute in the development of the standardized contract templates of a company, they are more likely to endorse and actually use the templates. This collaborative approach not only enhances the quality and relevance of the contract templates but also ensures their acceptance and utilization across the organization, ultimately leading to smoother operations and reduced risks.
Enhancing Cross-Departmental Collaboration – Improve Communication & Cooperation
Legal´s role in improving the communication and cooperation with the rest of the company cannot be understated. Regular, strategic meetings between Legal and other departments are essential to set the stage for a more integrated and efficient approach to contract management of the company.
These discussions should focus on:
- a) Strategic Alignment: First, Legal needs to clearly communicate its short and long term intended contract optimization strategy to all departments. Secondly, these departments should share their strategy and specific requirements and contributions to the contract process and templates. This will give Legal the opportunity to create and roll-out the best strategy to improve the Company´s contract processes and templates.
- b) Issue Identification and Resolution: Facilitating an open dialogue where Legal and all other departments can highlight challenges encountered with current templates and collaboratively develop solutions to streamline cooperation and reduce operational burdens.
- c) Training and Involvement: Initiating internal workshops to educate teams on optimal contract template usage, Legal engagement policies, while encouraging feedback and suggestions for improvements to ensure templates remain relevant and effective.
- d) Proactive Communication: Discussing the optimization of the empowerment of the commercial teams, meaning that all relevant contract-related documents and information are proactively shared with customers and partners by the Sales, Partnerships and Procurement teams.
This will greatly minimize the workload of Legal and maximize their output due to a decreased need of Legal clarifications and Legal involvement in negotiations. The importance of regular, inclusive meetings and training sessions cannot be overstated. When planning, it is essential to engage every layer of the organization, from grassroots employees to top management, in strategic discussions and trainings.
These sessions serve as a cornerstone for aligning strategies, creating an environment where all team members are equipped with the knowledge and skills to navigate the complexities of the contract optimization process and their roles effectively.
By maintaining a consistent schedule of these critical discussions and training, organizations can avoid the pitfalls of reactionary measures during peak periods of activity. Instead, a well-informed and strategically aligned team will be ready to handle the demands of the business efficiently, ensuring continuity and resilience in the face of challenges.
Tip 7: All templates in one place
𝐀𝐥𝐥 𝐭𝐞𝐦𝐩𝐥𝐚𝐭𝐞𝐬 𝐢𝐧 𝐨𝐧𝐞 𝐩𝐥𝐚𝐜𝐞
Remember to store all your (contract) templates in one central place to make sure that everyone is (i) able to find the correct templates quickly and (ii) using the correct template.
Sounds very straight forward, but in reality I rarely see companies that store all templates in one central place easily accessible for all involved team members.
Storing all contract templates in one central place is challenging for most companies, but especially in case of:
– fast-growing companies
– mergers/acquisitions
– activities in multiple countries
– large groups with many subsidiaries or a complicated corporate structure
– contracts in different languages
– involvement of different departments (Account Management, Sales, Partnerships, Sales Operations, …)
𝐖𝐡𝐚𝐭 𝐢𝐬 𝐭𝐡𝐞 𝐞𝐚𝐬𝐢𝐞𝐬𝐭 𝐰𝐚𝐲 𝐭𝐨 𝐦𝐚𝐤𝐞 𝐭𝐡𝐞 𝐭𝐞𝐦𝐩𝐥𝐚𝐭𝐞𝐬 𝐞𝐚𝐬𝐢𝐥𝐲 𝐚𝐜𝐜𝐞𝐬𝐬𝐢𝐛𝐥𝐞?
Best options are:
(a) fully/partly automate your contract creation and be strict that this is the only way that contracts can be generated. This way the relevant, most up to date and correct Contract Template is used and all templates are stored in one spot as you should only be able to use this automated system; and
(b) create a central place (usually an internal website or – less ideal – a shared folder).
𝐂𝐫𝐮𝐜𝐢𝐚𝐥: give training – at the start of employment and regularly thereafter – to your employees to make sure they know where the contract templates are located and how to correctly use these templates.
