I am the General Counsel here at Icertis and, like many of you, I have experienced a steep learning curve regarding considerations such as OSHA, premises liability, HIPAA and adapting to various process disruptions under a new working life since the spread of COVID-19.
My team headed to their respective homes about two weeks ago with many questions around how all of this would shake out, knowing that we were going into a busy period closing Q1 business. Additionally, I was taking on a brand new set of COVID-related workstreams best categorized under the "General" heading of the General Counsel title.
In the time since, we've answered a few of those questions—sometimes with happy surprises, other times with "live and learn" lessons. Here they are:
1. Call your insurance broker or risk department.
As part of our downside contingency planning, I reviewed our insurance coverages and was reminded we had "Business Interruption" insurance. The name was encouraging enough to call our insurance broker for an education. I'd recommend you do the same. It turns out that that particular policy is somewhat limited in scope, but I am happy to have had the discussion. It is hard to predict today what impact COVID-19 will have on your business, so it's a good idea to understand where and how your insurance may provide a backstop. You may also have the opportunity now to increase coverage in an area you suspect will be relevant to your business in the months to come.
2. Force Majeure is having a moment.
Force Majeure is a simple concept until it becomes relevant, and then the subtleties of it come into view. There are a million blogs etc. on this, so I will just make two basic observations:
Ask what the knock-on effects are
Force majeure in one contract is likely part of a chain of many contracts. Many manufacturers are reviewing their supply contracts to understand if recourse for failures to perform may be undermined by assertions of force majeure. Be sure to also ask what the knock-on effect of that term may be in the downstream relationships with, for example, resellers or customers. It may be that it's all a wash as you follow it all the way through the buy-side to sell-side chain. Perhaps this will be yet another term our big manufacturing customers put on the contract blockchain when all of this is through, together with the likes of ethical and sustainable sourcing terms?
Force majeure in contract templates will improve
Force majeure language in templates across industries will improve. Many forms of force majeure 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? I am working on our own improved draft and would be happy to share. If you are interested, please message me here.
3. Put all of your contracts in one place – ideally a powerful, searchable repository.
I suspect everyone reading this likely has one or several categories of contracts organized or stored in a manner they aren't proud of. This is not a wag of the finger – my department is no different. A number of our buy-side contracts are not in our own Icertis Contract Management (ICM) system. That came home to roost for me last week.
As part of a proactive exercise, we decided to review some 50 odd agreements that were unfortunately stored across three separate file shares. What could have taken me minutes to complete with the help of contract management software instead took two of us almost a week, especially since we were already stretched by things. I am the beneficiary of small scale here since we were talking about only 50 agreements. Some of our customers have scaled their ICM to manage 175 new contracts a minute.
When circumstances change, understanding your existing entitlements and obligations may require a different and deeper perspective.
When circumstances change, understanding your existing entitlements and obligations may require a different and deeper perspective. I am sure last week's exercise won't be our last so I am making it a priority to get all legacy buy-side contracts into our ICM deployment. Now is a good time to be honest about how readily you are able to access information when needed because new questions are likely to arise. Proactive thinking and management now will pay dividends not just in efficiency but in the quality of your organization’s decision making. My advice – make visibility into the foundation of your business (your contracts) a priority, now.
4. Do what you can to give your customers some help maintaining normalcy or adjusting smoothly to the new normal.
At Icertis, we launched a program to provide more support for our customers during this time of transition. In my small corner of the company, I saw this as an opportunity to create a Business Continuity/Disaster Recovery statement that could be attached to our sell-side contracts to help assure our customers around the steps we are taking (along with our partner, Microsoft Azure) regarding the availability of their contract management process.
I know many other companies are also getting creative and quite generous to try to help us all through this. It is great to see and we are happy to be a part of it here at Icertis.
5. Online business processes are a lifesaver.
In terms of closing Q1 business, we have been able to manage the create-negotiate-close-share contract process across business groups like nothing has changed. I credit this to my great team, and a robust deployment of contract management software.
Before adopting ICM, it used to be a matter of stitching together multiple emails, hallway reminders to stakeholders, stale templates gumming things up and massive effort to stay aligned and in sync.
Business would have ground to a halt absent a collaborative process now that I can't grab people in the hallway, and access to the team can sometimes be a challenge. With ICM, our sales professionals create contracts themselves using the right template (and I can see when this happens), and contracts get signed and stored in the right place – 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 ICM platform.
Again, if you compare my team to the in-house legal departments of many of our customer base, my team is REALLY small. If we were as large as them, with a legal team of sometimes hundreds, our process would completely fall over without powerful contract management. And, in fact, we are hearing from customers that because they have ICM deployed they feel like they are much better positioned to minimize disruption to operations.
This is just the tip of the iceberg in terms of lessons learned during this very interesting time. We’ll continue to share our thoughts and learnings, including insights we hear from our partners and customers, here on the blog. What lessons have you learned? Reach out, share your thoughts and let us know how we can help.
