Source: Crafty Fox

As organisations grow, implementing a robust supplier contracting policy becomes crucial for legal teams to manage operational risk and allocate resources efficiently. Chris Bridges, Partner & COO at Tacit Legal, outlines five essential ingredients for a successful policy. The foundation begins with clearly defining which contracts fall within the policy's scope, often based on committed spend and sensitive risk areas. Equally important is establishing who has the authority to accept contractual risks, with recommendations to agree on material risks with signatories to ensure consistent interpretation.

For more mature legal departments, introducing risk tiers and corresponding risk policies can streamline the review process. Bridges suggests starting with simple "High," "Medium," and "Low" tiers, each with its own set of criteria and review requirements. This approach enables teams to match contracts with appropriate delivery models, potentially leveraging a mix of business self-service, outsourcing to law firms or ALSPs, and traditional legal review, often supported by AI technologies.

Ultimately, an effective supplier contracting policy should be measurable. Collecting and analysing data allows legal teams to identify areas for improvement and demonstrate their value to the organisation. By implementing these key ingredients, legal departments can create a policy that not only manages risk effectively but also aligns with business needs, potentially transforming the perception of legal from a blocker to a strategic enabler.

Read more: Crafty Fox