November 26, 2013
It is recommended that companies should develop training and educational programs for officers, managers and employees on contract management procedures that provide those persons with the information necessary to easily and efficiently complete the contracting process so as to not unduly slow the pace of business. Among other things the legal department can draft and disseminate a short memorandum that highlights the basic steps that a person initiating a new contract would need to take in order to obtain approval. For an example, see Business Transactions Solution § 47:114. In addition, however, efforts should also be made to educate members of the legal department on how to efficiently and successfully carry out their assigned contract management activities and this process can begin with distribution for a memorandum on that topic from the general counsel to in-house legal personnel.
A memorandum of this type, which can be found at Gutterman’s Business Transactions Solution § 47:114.50, can serve as the basis for training activities conducted for in-house attorneys to assist them in understanding and carrying out various activities associated with contract drafting and management including gaining an appreciation of the needs and expectations of internal clients: managers and employees working in non-legal departments who turn to the legal department for assistance in completing contracts they need in order to conduct their day-to-day functional activities.
Among the key issues that should be covered in a memorandum of this type is the need for counsel to understand the business and legal background for the contract; the steps that need to be taken in order to comply with the requirements of any contract review and signature authority policies and procedures that have been established by the company; and the need for the in-house attorney to establish his or her role in the contracting process. Counsel should also expect to provide guidance on what contracts will be required for a particular transaction and the schedule for completing the drafting and negotiation process. Finally, counsel should be trained in the nuances of managing outside counsel relationships since outside counsel is often tapped to provide assistance on contracts that fall outside the expertise of members of the in-house legal team. For further information on contract formation and management, see Chapter 47 of Business Transactions Solution.