Alex Hamilton's article on how to handle high-volume contracts published in Outsource Magazine

Posted on Jul 9, 2014

High-volume contracts: separating legal process from legal counsel 

 

We have spoken with many in-house counsel teams over the past few years, who have shared their challenges and needs.  We have consistently heard about challenges with high volume commercial contracts.

Some time ago, the support of high volume commercial contracts (such as sales and procurements contracts) was almost universally brought in-house in the face of rocketing external legal fees. However these internal solutions are now coming under increasing strain, reflecting a broader set of challenges facing in-house counsel, including the need to focus on strategy rather than process.

In a time of budgetary and headcount freezes, the constant demand is “more for less”. However, it is often proving hard to get the attention of IT (who have their own challenges), so applying internal technology fixes is rarely possible.

In addition, the skills involved in re-engineering the processes and applying technology adeptly are very different from the skills that are needed in providing strategic counsel for complex deals. Throwing high-end lawyers at this problem, whether employees, contractors or via body shops does not tend to deliver the continuous improvement required to add business value. Many lawyers want to excel at legal counsel and not necessarily at process management.

The better solution, in our view, involves a combination of tiered judgement calls, strong process, smart design and the right technology.

There are significant benefits in getting this right: demonstrable, metric-backed value can be created for the business, such as measurable acceleration in closing contracts.  Risk can be consistently managed. The sales experience for customers can be improved. And from the perspective of the in-house legal team, the ability to focus on higher end activities means they can do more fulfilling work leading to reduced staff turnover and generating a valued partnership with the business.

So in summary we have found that:

  • in-house lawyers don’t have enough time to do what they want or need to do
  • innovation is an aspiration not a reality
  • the hand-offs between the business, in-house legal and external providers are perceived as problematic
  • there is a concern about companies becoming overly dependent on external providers
  • legal process outsourcers don’t provide all the judgement calls necessary to take the issues fully off the in-house plate
  • staffing firms rarely deliver process improvements
  • there is a concern that knowledge is being lost and that matters are not being managed systematically and uniformly

What if there was a better way? One that:

  • separates “legal process” from “legal counsel” thereby freeing up in-house lawyers for higher end work
  • supports the accelerated closure of high volumes of commercial contracts by combining useful metrics, continuous process improvement, and workflow technology with tiered judgement calls, allowing in-house teams to feel in control without needing day-to-day involvement
  • integrates an external provider with the business and the in-house team, rather than work being “thrown over the wall” so that the external provider becomes a member of the extended team

At Radiant Law, we believe we understand the levels of nuanced judgement calls that are required to support these contracts, safely and commercially.  We also recognise that the business needs contracts to be closed faster, while risks are managed smartly.

We offer predictable price points by combining onshore/offshore teams and proprietary technology and by taking some financial risk ourselves.  Our solution uses onshore lawyers who triage the work as it comes in, work closely with the client team and lead negotiations. These lawyers are supported by a team based in Cape Town, which delivers outputs using playbooks with positions that have been agreed with the client.

Radiant Law is a limited liability, ABS-approved company designed to provide these professional services using a tried and tested corporate structure. We believe that the future of excellent legal services is as much about management and leadership as it is about counsel and process. As its CEO, I’ve had to transition from lawyer to leader, as have each of the members of the management team. We have recently appointed Greg Tufnell (ex MD of Mothercare and Burton Group, two publically listed retail companies) to be our Chairman. Greg is a high profile non-lawyer non-executive director who brings extensive business experience and excellent corporate governance disciplines to our rapidly growing business.

In addition we look beyond lawyers, leaders and managers to solve in-house legal challenges. We have built our own technology platforms to track work, accelerate delivery and improve risk and knowledge management. We also use project management and lean processes.

I don’t believe that there is a magic solution to the issues facing in-house counsel. I believe that we are living in a new era that demands a combination of judgement calls, design and technology-enabled processes to meet the needs of companies generating high volumes of commercial contracts. We now have a track record of delivering on this with a number of global brands.

By Alex Hamilton

 

Read a shorter version of this article published in Outsource Magazine here.