4 Habits of a Successful Legal Risk Management Team

A failure to address legal risks before they turn into actual problems can be devastating in the business world. From breaches of contract to compliance failures, companies that do not take steps to recognize and address their legal exposure can end up on the hook for damages, fines and penalties, and reputational damage.

But though some element of risk is generally inherent to conducting any type of business, not all exposure should be seen as inevitable. By applying some of the key principles of risk management to contractual and legal dealings, enterprises can proactively take steps to limit their risk of losses, as well as mitigate the level of damage they experience should a breach of contract or other problems occur. This is called legal risk management, and here are four key habits the best teams typically possess to inform their approach.

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New Ebook: The Contracts Checklist for M&A Due Diligence

Mergers and acquisitions are some of the most complicated business events an organization can face. The transaction is complex. There are seemingly endless moving parts to consider. Executives need to integrate or restructure entire business systems, set strategic goals, and assign the right people to direct projects and programs throughout the process. Not to mention that a merger or acquisition often involves transitioning hundreds of employees, and thousands of contracts, which, if neglected, can introduce dangerous risks for the business.

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New Ebook: Using KPIs to Measure Contract Management Performance

Setting, measuring, and reporting on the right contract management Key Performance Indicators, or KPIs, can provide insight into the health of your business and answer a number of critical questions for your company’s stakeholders.

Is your business operating efficiently? 

Are you realizing enough value from your contracts? 

Is your company missing opportunities to minimize operational risk? 

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How to Solve the Problem of a Poor Contract Management Policy

Spend a little time reading up on contract management and you’ll undoubtedly come across this stat: good contract management can improve corporate profitability by nine percent of annual revenues. Flipped the other way, this figure, as reported by the International Association for Contract and Commercial Management, shows that poor contract management is costing companies significantly every year.

How can poor contract management erode company revenues and profits? There are numerous things that can occur throughout the contract lifecycle that can reduce value in big ways and small:

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Construction Contract Management: Achieving an Optimized Contract Lifecycle

There are a host of consequences when a construction project doesn’t go as planned. A single delayed shipment of supplies can cause further work interruptions, resulting in cost overruns and other issues, while compliance failures can create a slew of other problems. But because all of the relationships within construction projects are guided by contracts, effective contract management can be an important tool for making sure everything happens the way it’s supposed to.

Contract management is an organized and systemic approach to ensuring that all aspects of a contract, from deliverables and delivery dates to part and supply specifications, are adhered to during the contract term. In construction, careful contract management can help to ensure that every aspect of a build goes according to plan, and also help to reveal potential problems before they run the risk of derailing a project altogether. It is also key to keeping costs in check.

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3 Critical Steps That Need to Be in Your Contract Administration Process

Though the terms ‘contract management’ and ‘contract administration’ are often used interchangeably, they are not exactly the same thing. Contract management refers to the full spectrum of contract-related activities that occur within your organization, encompassing everything from the earliest stages of planning your approach to contracts in general, to drafting and negotiating agreements, to finally winding down and evaluating the performance of individual contracts after they have concluded. Contract administration, meanwhile, refers to a very specific phase within a contract’s lifecycle, kicking in during the post-award phase of your contract. More specifically, contract administration refers to the processes and procedures that must occur in order for business units to implement and manage a specific agreement after it has been finalized.

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3 Contract Monitoring Best Practices You Can Implement Now

While contracts are an important tool for ensuring that you achieve the desired outcomes from your business agreements, the document itself is only half the equation. Getting the full value out of your contracts requires more than just a well-crafted agreement that clearly spells out deliverables and/or services and related terms and conditions and that has been signed by all parties. A strong, properly-executed contract is essential – but equally so is a contract monitoring plan that ensures that all obligations are met as specified.

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An Expert Guide to Recognizing Revenue from a Contract with a Customer

Have you ever wound down a deal with a customer and wondered if you had inadvertently left any money on the table? There’s a good chance you have: research from the International Association for Contract and Commercial Management (IACCM) found that on average, businesses could improve revenues by nearly 10 percent simply by strengthening contract management practices.

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A Guide to Accelerating Your Contract Management Process

Better contract management is closely linked with better overall business performance, research shows: according to a report from McKinsey, a combination of sub-optimal contract terms and a failure to employ best practices for contract management can result in erosion of value equal to nearly 10 percent of total revenues annually. As such, it follows that correcting vulnerabilities that commonly occur within contract lifecycles by improving end-to-end contract management processes offers a promising tactic for improving profitability.

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Do You Know What's in Your Boilerplate Provisions? (Hint: You Should)

As the name indicates, “boilerplate provisions“ are legal clauses in a document that rely on “boilerplate“ language, often varying little between different contracts.

However, the term “boilerplate“ doesn't imply that this topic is to be taken lightly. In fact, not paying full attention to the language inside boilerplate provisions can be highly costly in terms of unpleasant surprises down the road. In this article, we'll discuss what boilerplate provisions are and why they can actually make or break a contract.

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