At Companies, Who Calls the Shots About Template Contracts?

I periodically moan about how inertia has rendered most of corporate America either complacent about suboptimal contract templates or incapable of doing anything about them. See for example this March 2012 post, and this article discussing a major source of inertia, the urge for autonomy.

I’m inclined to think that a company won’t overhaul its templates unless someone higher up the food chain gets involved. If you don’t have the perspective to see how suboptimal templates waste time and money, harm your competitiveness, and cause you to assume unnecessary risk, you’ll stick with what you know. That way, you guard your turf; you don’t show weakness to higher-ups; you preserve your autonomy; you don’t rock the boat.

But my assumption raises some questions: Higher up which food chain? Who calls the shots regarding, for example, procurement contracts? Legal or procurement?

And how involved do general counsel get when it comes to templates? Does it depend on their background? How likely is it that a general counsel with a litigation or regulatory background will do anything other than defer to what the contracts people say? On the other hand, if a general counsel has a transactional background, how likely is it that they’ll do anything other than stick with traditional approaches?

Just wondering.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.