There are clearly some substantial benefits of delegating contract management tasks to subject matter experts throughout your organization. But what does it take to get there?
This blog shares some of the benefits of collaborating on contract management tasks, and offers tips to help you build the foundation for diversifying responsibilities across the organization — without increasing risk.
Collaborate to Mitigate Roadblocks
Every department deals with roadblocks and bottlenecks from time to time, but by working to mitigate them as much as possible (especially with the help of CLM software), Legal will be able to dedicate more time to fulfilling their core responsibilities.
Every legal team has likely experienced some, if not all, of these challenges:
Issues with effective communication
Dedicating excessive time and labor to administrative tasks
Problems exercising complete control over document content and management
Defining ownership and responsibilities related to legal documents and processes
While some degree of administrative work is unavoidable and necessary for the central legal aspects of the department to function properly and efficiently, that shouldn’t justify excessive time and resources being dedicated to such tasks — especially at the expense of core functions.
Understanding how to identify the roadblocks impacting the legal department’s efficiency and developing a strategy to mitigate those roadblocks will allow Legal to operate at its highest capacity. This will also allow senior members of the legal team to spend more time and energy working side-by-side with the executive team and providing strategic oversight and guidance to enterprise employees.
When Legal is solely responsible for managing the entire contract lifecycle, they have to spend time working with various department leaders just to understand the context of every contract, learn how different obligations are tracked and measured, and answer basic questions about contract details. This process slows things down and creates extra work for all parties, and can be streamlined by simply giving cross-functional teams the opportunity to manage their own contracts. Then, Legal can be brought in to provide guidance and oversight when needed.
Communicate and Establish Clear Expectations
When the legal team is preparing to introduce new processes that impact others across the business, direct, clear communication is critical. Every individual involved in the contract management process should fully understand who owns every contract task, including reviews, negotiations, approvals, and more. Cultivating a company-wide understanding of a new process that helps delegate work away from the legal department is vital for early success and stable operations in the long term.
You and your legal team should also make it clear why staff from various departments are getting brought into the contract management process (especially those outside of the legal team), and how each person is contributing to the success of the business. For example, anyone who participates in the contract review process has a role to play in identifying and mitigating risk, and serves as the first line of defense before contracts are sent to Legal for final review and approval. Establish clear expectations so cross-functional teams understand their roles and what success looks like at every stage of the process.
Prioritize Projects and Define Areas of Responsibility
Which tasks should senior members of the legal team be focusing on? What can get routed to legal assistants or operations? What should go to cross-functional teams?
Emphasizing the high-risk, high-value parts of the contracting process that must flow through senior counsel is vital. However, it’s also important to pass along tasks that can be capably handled by other departments within your business or trusted to more specialized team members within the legal department to maintain a consistent, positive workflow. For example, establishing a response to a new industry regulation that impacts certain contracts may require significant input from the impacted departments within the company, with the legal team then reviewing and approving or changing the plan as necessary. Putting all of that work on the legal staff is simply inefficient.
To avoid confusion and ensure contract management collaboration is as efficient as possible, determine — and communicate — roles and responsibilities before you start delegating tasks and assigning work to non-legal colleagues.
Compliance should be a standard, repeated topic in the early stages of an effort to include other departments in the contract review process. The legal team is asking other departments to participate because their expertise is valuable, but they may not be familiar with compliance needs. Using the right tools, like software, to manage access and put guardrails in place is an important consideration, but Legal also needs to have conversations with enterprise employees about transparency and proper compliance techniques.
As other departments begin to participate in such efforts as part of a process shift, the legal department will have to continue to emphasize and explain the importance of interdepartmental compliance. Person-to-person discussions about compliance help individuals and teams understand their role while also creating an opportunity to address any questions about the new task. Taking these steps to start with clear communication should be a priority.
Every department relies on Legal for their knowledge and expertise, so it makes sense that Legal should turn to those same teams for help managing key projects and processes as well, including contract management.
As a result, Legal should be able to operate at its highest capacity, streamline processes, and build stronger relationships across the enterprise.