For many working in corporate law, the pressure was amplified as the move to working from home coincided with a typically busy period – the end of Q1 or in some cases the financial year of trading. Added to that, most lawyers were faced with a series of COVID-19 related questions surrounding our work.
A few months on, however, my colleagues and I have learned a lot about working as a corporate law team through a global pandemic and how we can be better prepared for future disruption.
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Insurance
As part of contingency planning when the pandemic hit, many of us phoned our insurance companies to understand how our businesses are protected. My team has been lucky that the work we do, contract lifecycle management, has, if anything, become more business critical during COVID-19. It was, however, reassuring to be reminded we had ‘business interruption’ insurance. It is hard to predict the impact COVID-19 could have on your business, so it is helpful to understand what any business interruption insurance includes. I’d strongly recommend phoning your insurer to understand what is included in your plan. This is as good-a-time as any to review your company’s insurance policy, consider what protection you need and have the relevant new policies drawn up.
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Force Majeure Matters
A lot has been said about force majeure clauses – with many questioning whether the pandemic is covered. Without wanting to say more on what has already been said, I’d make two specific observations:
- Force majeure in one contract is likely part of a chain of many contracts. Manufacturers, therefore, should look to review their supply contracts to understand where they stand if they fail to perform due to disruption. Understanding the knock-on-effect of contract terms on downstream relationships with resellers and customers is key. Once the pandemic is over, force majeure may be another term that becomes more standardised across industries together with the likes of ethical and sustainable sourcing terms.
- Longer-term, force majeure language in templates across industries will improve. The challenge, for now, is many provisions leave more questions open than they answer. Does it suspend performance of obligations for both parties? How long can the suspension last—at some point can someone terminate? What obligation does the party claiming force majeure have to try to fix things, if any? These are key issues companies need to be aware of and actively addressing.
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Contracts are Key
Holding all your contracts in one place can make a real difference. My team learned the hard way – with several of our buy-side contracts that were not in our own Contract Lifecycle Management (CLM) system.
Early into the pandemic as part of our contingency planning, we decided to review around 50 agreements unfortunately stored in three different file shares. What would have normally taken minutes to complete with contract management software, instead took my team almost a week. When you consider, however. that almost every business payment is governed by a contract – our 50 contracts would have been nothing compared to many others. Some of our customers manage up to 175 new contracts a minute!
Having contracts in one place where they can be searched and organised makes a real difference, particularly when circumstances change. Ensuring easy access to all contracts to understand clauses and obligations across an organisation will pay dividends when that information is needed fast – and help to improve decision making.
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Inspire Customer Confidence
With demand down and economic recession looming, in most areas of business, relationship reviews are to be expected as part of efforts to prepare for challenging times. Providing support and inspiring confidence goes a long way to maintaining a positive working environment between partners.
In recent months, we’ve seen organisations across the board discount services and create free to use hotlines to offer complimentary access to support and consultancy. In my organisation, we launched a programme to provide more support to customers and created a Business Continuity/Disaster Recovery statement to be attached to our sales contracts to help assure our customers on the steps we’ve taken to maintain access to their contracts through our platform.
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Keep Business Online
As a company and a team that aims to be in a constant state of digital transformation, we’ve been able to operate as if very little has changed. Again, this has predominantly been down to our contract management software.
Prior to deployment, it was a case of stitching together multiple emails, hallway reminders to stakeholders and regularly reviewing old templates in order to stay aligned and in sync. Had we still been doing that when we shifted to working remotely, business across the board may have ground to a total halt.
With contract management software in place, our sales professionals can create contracts themselves (using the right template – and I can see as soon as this happens), and contracts are signed and stored digitally, with metadata extracted as needed to inform various business owners and systems. My team and I are exactly where we need to be to process them: anywhere in the world, logged into the platform.
Being able to work as normal has been almost entirely down to the robustness of the technology my team has had access to. The impact has been significant – although it would make an even bigger difference if my team was larger or the typical size of the legal department at many of my customers.
These initial lessons will continue to resonate as we move further through this period of disruption. I’m looking forward to considering this again once we start to move back into offices in greater numbers. Ultimately, I’ve learnt that key to weathering this challenging time is being flexible, having access to the right data and information and being able to do business as normal during the ‘new normal’.
By Todd Smith, General Counsel, Icertis
