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Good Contracts Come From Empowerment

April 11, 2010

A note from IACCM member Leslie Marell reminds me of one of the key characteristics of high-performing legal and contracts groups – their focus on enabling others.

Leslie wrote: “Early on (in my time as an in-house counsel), I recognized that my clients didn’t understand what we  were trying to accomplish and that there was great frustration on both sides. I found that if I went to the various company branches/ divisions and explained the underlying concepts and rationales for the clauses – in plain English, and by using real world examples –many of the sales and purchasing people “got it”, (and) … would raise these issues early on with their customers/ suppliers, realizing that doing so often expedited the closing of the contract/ business.”

Helping others to help themselves remains the exception rather than the rule. In many organizations, IACCM research shows that there is a lack of trust and respect between functional groups. The result of this is that cycle times are longer, negotiations less well planned, win rates are lower.

Of course, meaningful empowerment is about more than simply visiting the business units, but good communications is an essential component in building contracting capability. Far too many organizations operate with a culture of blame, rather than a sense of shared responsibility.

If you ever hear (or perhaps utter) sentiments like ‘Those idiots in Sales’, or ‘They always involve us too late’, or ‘If only they had asked me …’, then the chances are you are part of an organization that has failed to reach out and help others become more effective. My experience is that the more we work to empower good decisions, the earlier we are involved and the more productive our work becomes.

And I agree fully with Leslie’s sentiment: “I frankly don’t understand why more of us lawyers/ contracting professionals don’t “reach out” to our clients and help them understand these issues. A basic tenet of any good relationship is communication and taking the time to explain ourselves to the other guy. When that happens, the relationship always improves. ”

Are you doing enough to enable good contracting?

Just as important, I also learned that people were very receptive and eager for this information since they were frequently in the dark about the why and meaning of the clauses. Few, if any, of their legal/ contracts people had taken the time to explain these concepts to them. Once they understood the concepts/ rationales, I found that the lawyer/ contracts / business person relationship greatly improved.

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