How Legal Teams Can Delegate Contracting in 2023
Delegation is something that’s easier said than done.
A closer look reveals that delegation can prove challenging for individuals in a management position. If they’re unfamiliar with relinquishing control and trusting another to get the job done, they can easily fall into the trap of micro-managing.
On the one hand, they already know the devil in the details, which means they can get the job done faster.
But if they do everything on their own, they may turn into a roadblock that holds up the process. Not only will nothing get done, but the manager will be overwhelmed and burnt out.
This incentivizes stakeholders to simply skip the manager.
During contract management, Legal experiences this exact situation – 65% of non-legal employees admit to bypassing Legal to get contracting done faster, even if it breaks corporate policy or puts the company at risk.
That’s where delegating contracting can smooth over some of the friction that occurs during contract management. It will also help unlock Legal’s untapped potential and assist Legal in pivoting from doing to leading.
Benefits of Delegation
In addition to freeing individuals from having to do too much, delegation has several more benefits.
As the saying goes, action speaks louder than words. It’s one thing to say you trust a team, but it’s another to actually delegate responsibilities to a team. Delegating is a clear indicator of how much you trust a specific party.
Not only is this a step towards a positive team culture, but it helps build an employee’s self-esteem.
When Legal is overly focused on contracting, it incurs an opportunity cost. In this case, it prevents Legal from pursuing more valuable strategic work.
Consequently, delegating and enabling lean contracting increases the strategic value of Legal to the organization. By freeing up the time that was spent on contracting, Legal gains that time for achieving more ambitious projects.
One drawback of too much routine contracting is that it can cause an individual to become disengaged, resulting in a drop in performance. Delegating offers a chance to build a high-performing and highly engaged team.
By making better use of each team member’s time and giving each person something meaningful to work on, the team as a whole can achieve much more.
In today’s globalized world, teams need to be capable of responding to any situation as it appears. Covid-19 required teams to adjust to remote working environments, while the economic climate of 2023 forces teams to find ways to become lean and do more with less. In the short term, this gives all team members a chance to sharpen their skills. In the long run, the company benefits from a highly skilled workforce.
The Monkey Problem
The traditional approach to delegation is best described with the analogy “Who’s got the monkey?”
A manager assigns a monkey (i.e. a task) to a subordinate. If the subordinate doesn’t know how to work with the monkey, they send the monkey back to the manager.
If there’s just one subordinate, there’s no major issue. But keep in mind that managers can easily have 10–15 employees under them. If every employee is sending their monkeys to the manager, the manager’s going to get overwhelmed. Not to mention, managers have their own monkeys to take care of.
Solution to the Monkey Problem
To solve the monkey problem and prevent the manager from being swarmed in monkeys, employees should present a monkey with ideas already brainstormed. In fact, the optimal solution would introduce the ideas so that all the manager needs to say is yay or nay.
Here are a few more steps to ensure proper care of monkeys (a.k.a. how to complete tasks efficiently):
- Don’t overwhelm the manager with too many monkeys.
- Make meetings by appointment only.
- Make meetings face-to-face or video call (not email)
- Establish clear deadlines and outcomes.
As for the manager in this scenario, it’s important to take into account an employee’s goals, strengths, and weaknesses. Although there are exceptions. The most common is when the organization’s goals must take priority over the employee’s.
Legal and the Monkey Problem
In most companies, Legal teams experience their own monkey problem. As experts in legal matters, here’s a glimpse at their daily responsibilities:
- Contract review
- Contract redlining
- Answering legal questions
- Maintaining legal compliance
- Monitoring contractual and legal obligations to save the organization from breaches
And that’s not all.
With so many day-to-day responsibilities, it’s easy to overwhelm Legal with monkeys. And if Legal falls behind, it creates a drag on all other contracting, which is part of the reason why so many other teams end up skipping Legal.
If you think it’s impossible for Legal to delegate contracting, think again. There are actually several ways for Legal to delegate a portion of their responsibilities, which in turn would take some of the monkeys off their back while speeding up company processes.
How Legal can delegate contracting
Here are three concrete steps Legal teams can take when delegating contracting.
Identify core responsibilities
Before anything is delegated, Legal has to identify what must be completed by Legal (no ifs, ands, or buts).
These should include tasks that can only be done by someone with official legal authority or expertise. For instance, Legal wouldn’t be able to delegate court representation to HR. Very few HR specialists possess the necessary qualifications.
Legal also shouldn’t delegate high-risk, high-value contracting or negotiations to non-legal teams. This would expose the company to massive risk or unfavorable terms if the non-legal team performs poorly.
Triage non-essential tasks
Once Legal knows what they absolutely can’t delegate, it’s time to start looking for ways to triage tasks to other teams. This might entail additional discussions with non-legal teams to learn what they’re willing to do, as well as find out their pain points when working with Legal.
While not an exhaustive list of triage opportunities, here are a few common tasks that Legal can delegate:
- Standardized simple contracts like NDAs, DPAs, and sales agreements
- Employment documentation to HR
- Drafting of simple contracts to business managers
It might also happen that larger tasks can be broken down into smaller parts. For example, while business managers may initiate contract drafting with the help of a pre-approved template, Legal may step in to handle any negotiations and clause swapping.
Leverage legal technology
Technology is another area that can help Legal teams delegate high-volume work that doesn’t generate significant value for the company.
GPT-3 AI is one technology that can pick up some of the slack. If Legal feels like they’re overwhelmed with too many simple questions, they can provide a link to an internal implementation of GPT-3 that can answer basic legal questions or translate legalese into simple terms.
GPT-3 can also be used to draft contract clauses that can be forwarded to Legal for final approval. This frees Legal from having to create clauses from scratch.
In addition to GPT-3, a powerful CLM software offers several features that facilitate delegation.
For instance, CLM systems that support a CRM integration allow sales teams to initiate drafting directly from the CRM and auto-insert client data into the contract.
Customizable milestones, alerts, and notifications enable non-legal teams to set reminders in advance so that any contract changes and decisions needn’t be done at the last minute. Smart document tagging further simplifies contract management by scanning documents and automatically adding tags for key dates.
At the same time, a document generation engine can empower non-legal teams to draft agreements by answering simple questions. The responses are then automatically added to the document. Conditional approval flows ensure that the right person sees agreements at the right time, while e-signature flows forward contracts and instructions to all necessary signatories.
On top of that, pre-approved contract templates make it even easier for Legal to delegate contracting while maintaining compliance with internal policies and government regulations. Even a feature like Optical Character Recognition makes it so that any colleague can upload a PDF of an agreement and the CLM will do the rest.
Delegation can fail for many different reasons, but the most common ones relate to the manager or team’s personality or their inability to trust.
Trust won’t appear suddenly overnight, but a strategic approach to delegation followed up by quick wins and success indicators can help build confidence in the new processes.
In the end, Legal’s main responsibility is to safeguard the company from risk and become a strategic partner who can help generate growth. Neither of these requires Legal to do 100% of the work.
Nowadays, contract management is an enterprise task. That means there’s no need for Legal to “go it alone”. So if Legal creates ways to control the contracting process without doing all the groundwork, this actually empowers Legal to achieve its main goals.
If you want to learn more about how ContractWorks CLM can help Legal delegate contracting, book a demo with our team.