How contract management is like herding toddlers

Remember the scene in Cheaper by the Dozen where the frog gets loose on the breakfast table and all twelve kids and both parents destroy the entire kitchen trying to catch the frog? You can refresh your recollection of the complete chaos that ensues here.

For corporate counsel, contract management can be a little bit like trying to catch that pet frog: two parents have to manage the assigned tasks of twelve little kids while they run around breaking dishes and spilling food all over the place.

Now, before you accuse me of impugning the abilities of your staff, let me admit this is an imperfect analogy. I’m sure the corporate counsel you manage, and the corporate clients they serve, are nothing like Steve Martin’s family in that classic comedy scene.  But, it does paint a picture of the complexities of managing and serving teams of people who all have different roles and varying degrees of ability and distinct motives for wanting to get the job done in a very particular way.

So, what is an in-house lawyer, general counsel, or chief legal officer to do?

Categorize

Think about the universe of contracts you manage. Some are long and complex with multiple parties and third-party beneficiaries. Some are short and simple. Some are of significant and even material value to your company. Some are of minimal value. Some are routine and rarely change. Some require negotiation over each paragraph. Some lend themselves to litigation risk. Some will go in a contract management repository and rarely if ever be the subject of a dispute.

Once you have the universe of contracts in mind, think of a way to rank the various types on a scale that makes sense to you. Maybe it’s a scale of 1-10 with 1 being simple and 10 being complex. Maybe it’s a scale of A-F with A being highest value and F being lowest value. Maybe it’s a percentage scale according to time required with 10% being very little time required to 100% being extensive time required. Maybe it’s a hybrid of all of these ideas.

When your scale is determined, start to drop various types of contracts you manage into categories or “buckets” depending on their relative rank. For example, a complex, high value, non-routine contract that will take someone on your staff months to negotiate and execute may be assigned 10 points. Conversely, a standard NDA that is used for every potential customer that will rarely be litigated and requires very little effort may be assigned 1 point.

Strategize

Now that you have a point system and an idea about how to assign point values to the various types of contracts your legal operations require, think about how to assign the various types of contracts to your staff.

You may find that assigning tasks by point value is the best strategy, so you can keep track of point values and not overwhelm any one person. Similarly, you may find that assigning by contract type is better in your context so that it becomes natural for one person to have many 1-point contracts, while another has very few 10-point contracts.

The key here is to ensure you are consistent with the contract management approach, and know who is doing what, and when it’s due.

Optimize

Finally, you need to keep track of all the moving parts. In other words, you need to make sure your contract management doesn’t start looking like twelve little kids trying to catch a frog who has escaped onto the breakfast table with no real optimal way to guarantee the frog is caught, the lunches are made, and the kids all make it to the school bus on time.

One sure way to optimize your legal operations and contract management oversight is with an automated software platform that enables you to see everything your staff is doing, the status of their various tasks, the point values they have under management, and whether they are meeting metrics and SLAs.

Yes, contract management can be like herding toddlers, but by following the categorize-strategize-optimize approach, you can almost always avoid the frog on the table at breakfast, even if your family looks a lot like Steve Martin’s in Cheaper by the Dozen