General Counsels: Take Control of Contracts, Drive Business Value

General counsel and contract management are two important functions that contribute real value to an organization.

Oftentimes, navigating the complex landscape of the contract lifecycle can be challenging for general counsel and legal teams.

Contract management is teamwork. Legal counsel collaborates with other departments such as procurement, sales, and finance to necessitate effective contract management.

At times, getting new contract requests out of the blue from other departments can be challenging especially when there is only limited information to identify contractual requirements and negotiating terms.

This can result in an unending series of emails, navigating through clauses and a large volume of contracts to handle for the general counsel team, king their focus away from other key legal matters.

But what if legal counsel doesn't have to manage the contract lifecycle the hard way?

In this blog, we will cover how general counsels can align the contract management processes with business objectives, oversee the entire contract lifecycle using technology, and position legal as an important function rather than a cost center.

Before we dive in, let’s understand what the role of general counsel in contract management is.

The Role of General Counsel in Contract Management

A general counsel (GC) or chief legal advisor contributes to the overall success of any organization by aligning legal obligations with business objectives. The general counsel is a major line of defense that safeguards an organization's interests, oversees legal compliance, reviews business decisions, and advises on potential risks.

Legal Architect

The roles and responsibilities of the general counsel involve managing the entire process of drafting, evaluating, negotiating, and finalizing the contracts between two parties. It is important to ensure the contract documents are legally sound as they work with various departments, understand their objectives, and play a crucial role in negotiating terms.

Risk Management and Compliance

Risk management and compliance are an integral part of a general counsel's role. It involves identifying, assessing, and mitigating risks in areas such as contract disputes, commercial litigation, employment law, intellectual property, and regulatory compliance. Under the direction of the general counsel, the legal teams develop and implement risk management strategies.

Dispute Resolution

The GCs act as the senior legal advisor who brings a strategic perspective to the dispute resolution process. If any dispute occurs, the experience and legal knowledge of GCs are important to understand the point of view of both parties and come up with a resolution. Responsibilities inherent in their roles include negotiating settlements, mediation, litigating disputes, and arbitration. 

Contract Execution and Performance Monitoring

General counsel ensures all pre-contractual obligations are legally binding and the contracts play an important role in execution by reviewing and monitoring contract performance, identifying potential issues, and recommending actions. In high-performing legal teams, the general counsel uses metrics to evaluate productivity to identify if the team is meeting expectations and to find ways to improve performance.

📑 Also read: Building a High-Performing Contract Management Team

The Unsung Heroes: Common Challenges Faced by General Counsels

General Counsels (GC) face several challenges while navigating the complex landscape of contracts. A significant aspect of these challenges is efficiently using their time and resources to enhance contract management practices, mitigate risks, ensure compliance, and build strategies for business continuity.

Data Overload

Data overload is a common issue that in-house counsels must deal with as the sheer volume and complexity of unorganized contract data makes it difficult for them to extract actionable insights.

The Rise of Artificial Intelligence (AI)

Though many legal professionals are skeptical about the capabilities of AI in the legal space, the adoption of AI is taking at a rapid pace presenting both opportunities and challenges. Keeping up with the fast-evolving field of AI is another challenge for general counsels as they must weigh the ethical implications while harnessing AI's potential benefits.

Data Security and Confidentiality  

Some key challenges in ensuring data security and confidentiality are identifying and classifying sensitive data, negotiating data privacy and security with vendors, managing third-party risk, and ensuring smooth implementation.

Manual Processes and Inefficiencies

Relying on manual contract management processes puts general counsels at a disadvantage. Scattered documentation, misplaced contracts, inconsistent formatting, redundant reviews, and delayed contract execution result in human error and inefficiencies.

Managing Contract Risk in the Age of Disruption

The in-house general counsel has long seen risk mitigation strategies as their top priority. Following COVID-19, legal teams anticipated potential disruptions and were presented with many challenges such as navigating digital transformation and unforeseen changes in technology.

Managing Contract Fatigue  

With an overwhelming volume of contracts, managing contract records, tracking key milestones, and keeping up with compliance and contractual obligations can be labor-intensive jobs for GCs and legal teams that could lead to contract fatigue. This is a common challenge that GCs face and they develop strategies to centralize contract management throughout the contract lifecycle.

The Pressure to Reduce Legal Spend  

In today's business landscape, GCs are primary legal advisors to the board and stakeholders across the organization. They are expected to provide accurate and on-point legal guidance to senior management and the board of directors. They constantly face the pressure to double down on different legal topics that may arise on a day-to-day basis and be strategic in responding to the pressure to reduce legal spending on contracts.

GC's Role in Key Stages of Contract Management

The goal of general counsel in the contract management process is to thoroughly understand the contract obligations and expectations and facilitate an effective relationship between the organization and its clients. Here are specific actions general counsels typically take at each stage of contract management:  

Initiation and Drafting

The in-house GCs work with the legal teams to build contract templates pre-populated with contract information and metadata. They promote template-driven contract drafting where the various departments can access common templates such as service level agreements (SLAs) from a library of contract templates. These self-service, standardized contract templates help improve turnaround time and productivity. GCs help outline terms, clauses, and clear parameters for various scenarios to showcase the value your legal counsel offers in pursuit of business growth and success.  

Negotiation

As chief legal advisors to an organization, GCs work with internal stakeholders to develop a negotiation strategy. They identify the strengths and weaknesses of the business to determine the objectives of the negotiation and identify critical clauses that need to be added to the contract agreement. With the goal being to reach a reasonable agreement that is acceptable to all the parties involved, GCs provide practical advice depending on various scenarios. They weigh the risks and liabilities that could impact agreements.  

Execution

The role of GCs in the contract execution stage is to ensure the contract agreement is legally sound and aligns with the organization's goals and interests. Their responsibilities include meticulous review of the contracts, ensuring alignment with company policies, and overseeing the completion of the closing transactions. They also communicate with the stakeholders about the key terms, obligations, and risks and monitor contract performance.

Renewal and Termination

It is the role of GCs to provide renewal sales strategy recommendations. GCs evaluate past performance, facilitate favorable renewal terms, draft updated clauses, forecast price increase opportunities, and negotiate favorable terms before contracts expire. Through better renewal positioning they highlight the most favorable contracts to renew. In termination scenarios, GCs advise the company on the legal implications, mitigate potential disputes, and oversee the format of the termination process.

📑 Also read: The 7 Stages of a Contract Management System

Contract Management Made Easy for GCs

As general counsels hold immense responsibility in managing the entire lifecycle of contracts, having the right contract lifecycle management system helps them streamline the legal contract management process.

Just as you have read previously, a contract passes through several stages, and the tasks and responsibilities of general counsel might be time-consuming. 

Using a contract management system (CLM) helps address the majority of important workflow issues with the least amount of time and resources and provides structure to the entire contract lifecycle management process. 

Tools that incorporate generative AI capabilities and natural language processing (NLP) help GCs and legal teams to be more productive. According to research by Gartner, Generative AI will become a recognizable force in the legal technology market by 2027 putting pressure on legal leaders to adapt.

Microsoft 365 for General Counsel Contracts

For countless organizations, Microsoft 365 has become the go-to productivity suite, and your legal team is most likely already using it. Building on top of your existing Microsoft 365 ecosystem presents a lot of opportunities and it eliminates the need for your team to learn an entirely new system.

Microsoft 365 suite of products such as Teams, Word, SharePoint, and Outlook create a better contracting experience for general counsels. Dock 365 CLM is an all-in-one contract lifecycle management system that plugs right into your Microsoft 365 environment.

Dock 365 CLM comes with generative AI capabilities enabling AI-powered clause comparison and analysis, clause extraction, and getting a contract summary within minutes without actually going through the whole contract.

📑 Also read: Managing Education Contracts Made Easy with Microsoft 365

📑 Also read: Microsoft 365 for Secure Healthcare Contract Management

If you'd like to see firsthand how the Dock 365 CLM integrates with Microsoft 365 and how GCs can improve their contract management capabilities for increased efficiency, schedule a free demo.