First, define the contracting process
Perhaps the main issue is that many companies don't approach contract management as a process. In fact, in some organizations, contracting remains a relatively disjointed set of activities: roles and responsibilities are not well defined; there are different agendas and objectives; and risk is not well communicated or managed. When companies fail to develop a contracts management strategy, legal risk and cost are increased. Consequently, the lack of strategy makes it difficult to form a mutually beneficial relationship with a Legal Process Outsourcing provider. Before you can decide what to outsource and what to keep in-house, you must develop a contracts management process to isolate the gaps and determine where you need support.
Next, chart the types and scope of contracts
There are a wide range of contracts that cycle through companies and corporate legal departments, in particular. Examples of some of the most common agreements include:
* Supply agreements
* Software license agreements
* Alliance agreements
* Hosting services agreements
* Patent license agreements
* Vendor agreements
A company should review and categorize the full breadth of contracts it needs to manage. Only then can a contract management strategy be developed, and the company can decide what is integral to core competencies and what can be outsourced.
Now, decide what can be outsourced
Once you have a handle on the process and scope of contracts that your company is managing, a well-informed decision can be made about how LPO can help support and advance your strategy. A blended LPO model can offer numerous benefits including:
* Increased Efficiency: Your ability to manage the contracting process will be improved because LPOs provide contractual tracking and management processes to ensure obligations are being carried out by both parties. They assess and refine processes to ensure contract objectives are being met.
* Reduced Costs: By outsourcing you will get access to experts at a much lower cost than by hiring and that translates into cost savings. And, outsourcing allows you to focus on your company's core competencies.
* Technical Expertise: A specialty LPO will have the expertise to understand the nuances of legal contracts and the technology needed to deliver high-quality, low-cost results. All data is secure and confidential.
Flexibility: Today, many LPOs offer a flexible model where either a dedicated team of temporary attorneys can be used to staff up or work can be sent overseas. Similarly, LPOs can take on part of your contracts management process - or the entire program.
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