In the last post I mentioned that there are good reasons why general counsels (GCs) are increasingly getting involved with contract management. But the really interesting thing about this involvement is that it is actually resulting in a change in the GC role—and the transformation of contract management from a departmental solution to an enterprise service.

With the awareness that they need to keep a close eye on contracts, GCs are realizing that their offices should have corporate management responsibility for the documents and their attachments. With contract management under their control, the next step for GCs is to leverage the storehouse of information that resides in contracts to both improve risk profiles and enhance business strategies. In other words, with control over contracts, the GC is well on the way to becoming a business strategist.

From here it’s only a short hop, skip, and jump to having the GC office establish contract management as a centralized enterprise resource. After all, with the scalability and adaptability of contract management solutions, it only makes sense to have a single point of responsibility for the solution. GCs can then offer contract services to sales, procurement, HR etc., in the same way that PR and marketing services are offered across various departments in an enterprise.

- Terry Nicholson

Here’s a bit of irony that I think will soon become a bit of history: Despite the fact that the General Counsel’s office (GC) in most companies carries responsibility for legal documents, the GC is not always deeply involved with contract management processes. This situation probably evolved because contracts are viewed as satisfying business needs. But recent well-publicized regulations, events, and business failures have made it abundantly clear that contracts, though business-oriented in nature, are intimately associated with corporate risks. And responsibility for managing the corporate risk profile sits squarely in the lap of the GC.

Fortunately, GCs are increasingly asserting their authority in the contract management process as they begin to recognize the tight linkage between this process and their ability to mitigate legal and regulatory risks. Remember the old commercial for vegetable juice when the guy slaps himself on the head and says, “I could have had a V-8?” Well, more and more GC’s are now having an analogous epiphany with contract lifecycle management (CLM).

GC’s take a lot of heat when something pertaining to a legal document or an audit goes awry, so their vested interest in contract management is rapidly becoming crystal clear. What’s less obvious is the growing role in strategic business operations that will result from this involvement.

- Terry Nicholson