As anyone in business knows, contracts are a source of great stress. For companies with no in-house legal resources, they can cause confusion or fear of the unknown. For companies with in-house counsel, contracts can be the bane of their existence—reviewing contracts is the bread-and-butter of what the legal function does, but it can also be painful because the volume and pressures can be extraordinarily high. The legal team might not be meeting the turn-times that their business partners in sales or procurement expect, and the company might not have leverage to negotiate contracts effectively. Contracts present a confluence of potential problems, and a company that lacks a robust process to move things along can find itself in a position where the legal team members cannot meet the pace or demands of their business partners, or where the company is acquiescing and accepting terms that it might not understand and which can present undue risk.
If you are a company that has no in-house legal resources and you are concerned about the risk that critical contracts may be creating, contact Ephraim. He would be pleased to help you get a base understanding of what you should look for in contracts generally, and, when you are in a pinch, also available to help you negotiate and improve the contracts your business is asked to sign.
If you are with company that has in-house legal resources and contracts are a source of stress, you may benefit from a transactional process improvement (TPI) kaizen event. This is a cross-functional burst of work, typically 3-5 days, designed to map the key steps in your process, identify the bottlenecks and opportunities, prioritize them, and act on them. As you put your improvements in place, you can ensure that your contract reviews are right-sized and account for stakeholder input (e.g., Sales, Procurement, Finance, General Management), that you have defined criteria for what contract clauses are acceptable and which ones need to be escalated, and that you have standard work so that your legal team does not continually recreate the wheel every time they negotiate a contract. By the end of your TPI kaizen event, your company can have a contracts playbook and improved workflow to make the whole process more efficient and effective.