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In-house standard contract - drafting challenges

Each of the in-house standard contracts we're currently drafting for clients involve thinking about their daily practical use.

One is for an established wealth management consultancy. Another for a supplier of hosted customised software.

Both require us to design and test like an engineer designing a car of the future.

The relatively easy bit is drafting legal wording for compliance with law and making legally effective agreements.

The hard bit is finessing and designing when and how each client will deal with its business tasks. That's the work that minimise the most risks. They are the client's practical tasks of writing business proposals, project plans, scope of work or specifications, and setting price expectations.

Change is making drafting for these tasks an increasingly common challenge. We're talking of change in business functions and related business practices, systems, processes and procedures.

I want to know more about these changes. I get tired of monotone drum beating on how social networking reworks marketing or customer engagement. What I want to hear more about is all the rarely discussed business functions also undergoing remarkable change.

The concept of "business functions" describes areas such as finance, operations, administration and marketing. Depending on the author and sector, the names of functions vary a little and there's never more than about seven of them.

In case you aren't familiar with the notion of "business functions", I've set out a typical list at the end of this article. Few businesses, even medium-sized, have even half of them covered or properly dealt with.

As that list illustrates, each heading function has sub-areas.

All are supported by either cross-business or area-specific practices, systems, processes and procedures. For example, systems might involve computers and information management. Following is an illustration of one such set-up.

contract-drafting-business-functions

This architecture of business I've been discussing is not taught in law school, it's a shock to young lawyers when they stumble onto the challenge of how to draft for them. Maybe you learn it best in practice or in an MBA course.

For decades I've used a growing understanding of business architecture to draft useful business contracts and run workshops for lawyers and executives in how to do so.

As a lawyer the challenge I'm having is how to draft contemporary contracts that work efficiently with the current ways in which people do things at work. On this we have to work hard to stay in-touch and stay ahead of our clients and their industries, which is why they pay us. Thank you clients!


Business Functions List

Below is a typical list of business functions for a goods or services business. Each business and industry needs to customise to its specific situation. The graphic is indicative of this, as the business functions there are the boxes below the box titled "Dashboards, scorecards and business intelligence".

contract-drafting-challenges

People and Administration
Human resources management
Human resources training
IT and telecommunications infrastructure
Operations manual maintenance
Document and records management and retention
Tangible assets management
Intellectual property management
Licences and permits

Strategy and Innovation
Market research
Knowledge management
Product development
Business model review and change management
Strategic, business and operational planning

Finance and Compliance
Budgeting and management accounting
Finance and leasing
Banking relations
Insurance
Bookeeping, debtors, creditors and cash flow
Tax accounting
Legal compliance and administration
Audit

Production and Operations
Supply chain management and purchasing
Pricing
Production and quality control
Plant and equipment management
Inventory control

Marketing and Sales
Brand development and management
Marketing, advertising and promotion
Stakeholder engagement, social media etc
Proposals and estimating
Contract negotiation and management
Logistics, shipping
Transaction processing
Sales administration and risk and project management
Customer relationship management
Customer support


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