Driving Efficiency and Identifying Corporate Risk With Contract Reviews

Driving Efficiency and Identifying Corporate Risk Inline With Contract Reviews

2nd June 2020

Driving Efficiency and Identifying Corporate Risk With Contract Reviews

By Mark Langsbury, VP Sales EMEA at ContractPodAi 

In-house legal teams are moving en masse toward remote working. The immediate challenge is working effectively and securely, and ensuring business continuity planning. But as the conversation shifts to how best to support the legal function during this 'new normal,' there is some debate about what is essential to the day-to-day running of legal teams. Where exactly can technology add value and identify corporate risk?  And what are the expected operating models?

A large part of in-house legal teams' work is centered around contract negotiation and management. The overall efficiency of this process needs to be a key concern. This involves teams' ability to work efficiently and collaboratively from the home environment at all times.

Recently, we polled in-house legal professionals in our speaker group. And the majority of them agreed that post-COVID-19 lockdown, the business model of increased home-based working will remain. As a result, the systems that are put in place today need to facilitate the smooth management of contracts in any working environment. When we asked the same audience what elements of the contract management process had been the most challenging during the lockdown, 48 percent stated that identifying relevant clauses in existing contracts was causing the most problems. Thirty-two percent said that locating contracts was also a challenge.

So as the spotlight moves away from the mobilization of the remote workforce, there will be increasing light on corporate resilience and identifying risk. As such, there will be much more emphasis on reviewing and renewing contracts.

Hyperscale Group's Derek Southall noted that contracts of all descriptions will be reviewed and renegotiated with a focus on force majeure. Naturally, this will present a lot of work for legal teams. And the ability to easily locate contracts and identify relevant clauses will be imperative.

An immediate challenge lay in ensuring business continuity and the ability to WFH effectively.

In-House Legal Teams: The 'New Normal'

When it comes to the smooth operations and cost-savings in legal departments, Karl Chapman, Director at Kim Technologies, advises a focus on the essential foundations of the in-house legal team.

Firstly, it is necessary to understand intake management by looking at the make-up of workloads. Such as, where it has come from, its allocation and status, and whether it has closed, as case-closed data should not be underestimated. It can be extremely valuable by driving further operating efficiencies. Get to know the data around the percent of contracts negotiated versus signed contracts. And, the variance by product and geography.

Secondly, utilize self-service technologies for internal and external clients. These free up teams, allowing them to pay more attention to key tactical and strategic matters.

Lastly, it is crucial to understand outside counsel management. This requires appreciating the type and level of work allocated externally. And, the financial impact, financial risks, and why outside counsel manages it. Is it capability or capacity?

Chapman also points out that with the foundations in place, the operating model can evolve and a considerable impact can be made quickly - and at relatively low cost.

As we start to come out of the lockdown, those not already on a transformation journey will march toward digitalization. Embracing new technology platforms was a popular topic in our speaker group. Companies have come to realize that it is possible to work differently, while managing potential risks that businesses may face. And that it is important to continue looking for new ways of operating to avoid these types of risks. As we go adapt to a "new normal" amidst the pandemic, be prepared for future crises with these tips. 

This, in itself, presents an opportunity for legal teams to increase the pace of decision-making. And, technology adoption and digital advancement overall.

Top 3 takeaways about contract review

AUTHOR:

Mark Langsbury

Mark Langsbury
VP Sales EMEA
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