8 Signs You Should Consider Outside Counsel

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    CobbleStone Software explains eight signs it's time for outside counsel.

    As a contract manager or administrator, you assume leadership in ensuring your organization's contracts are drafted, negotiated, executed, and managed effectively. However, there may be situations where seeking outside counsel proves necessary to protect your organization's interests and mitigate potential risks. Let's discuss eight signs indicating it may be time to consider bringing in outside counsel for legal services.


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    #1 - Complex Legal Issues

    When complicated legal issues arise that go beyond your expertise, it is wise to seek the guidance of outside counsel. For example, if your organization is involved in an intellectual property dispute, you may need the experience of a lawyer specializing in intellectual property law dispute resolution. Such outside counsel can help you navigate the intricacies of patent, trademark, or copyright law and provide strategic advice on protecting your organization's intellectual property rights.

    Similarly, if you are dealing with niche regulatory compliance issues or international contracts with different regulations, outside counsel with mastery of these areas can provide valuable insights and ensure that your organization receives the best legal advice and representation. For instance, if your organization operates in the healthcare industry and needs to comply with HIPAA regulations, a lawyer specializing in healthcare law can guide you through the complexities of compliance and help you avoid potential legal pitfalls during healthcare contract management.

    Example: Suppose a hypothetical technology company - HeckTech - has developed a groundbreaking software product. HechTech's contract managers have recently discovered that a competitor infringes on their software's patent. In this case, engaging outside counsel with expertise in intellectual property law can help HeckTech assess the strength of its patent infringement claim and develop a strong legal strategy to protect its intellectual property rights. This strategy might include a prior art search and thoroughly exploring relevant licensing terms.


    #2 - High Stakes Negotiation

    Negotiating high-value contracts or deals with significant financial implications can be precarious. Outside counsel can provide valuable insights and strategic guidance during these challenging negotiations. For instance, if you are negotiating a multimillion-dollar contract with a vendor, an experienced lawyer can help you navigate the particulars of the negotiation process and ensure that you secure favorable terms and protect your organization's interests.

    Outside counsel can review the high-stakes and high-value contract, identify potential financial risks, and suggest necessary amendments or safeguards to mitigate those risks. Additionally, they can leverage their negotiation skills to advocate for your organization and achieve the best possible monetary outcome. For example, skilled outside counsel may be able to negotiate lower prices or more favorable payment terms with vendors, resulting in cost savings for your organization.

    Example: Imagine our aforementioned technology company - HeckTech - is negotiating a contract with a major computer parts supplier. The contract involves a long-term commitment and significant financial investment. Engaging outside counsel with expertise in contract negotiation can help HeckTech's contract administrators analyze the terms and conditions, identify potential financial pitfalls, and ensure that the contract protects their organization's interests. The attorney can also guide the HeckTech team in negotiating favorable pricing and payment terms if the supplier's initial proposition seems too costly, ultimately saving the organization money and securing a beneficial agreement. Outside counsel's strategy here might include comprehensive financial impact analysis, help with drafting terms related to performance guarantees, penalities, and incentives, the formation of a financial contingency plan.


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    #3 - Litigation & Dispute Resolution

    Having experienced legal professionals on your side is crucial when legal disputes arise. Outside counsel can assist in navigating the complexities of litigation and dispute resolution processes. For example, if your organization is facing a lawsuit, an attorney can help you assess the claim's merits, develop a strong legal strategy, and represent your organization in court if necessary.

    Outside counsel's litigation and dispute resolution expertise can significantly increase your chances of a favorable outcome. They can gather evidence, interview witnesses, and present your case effectively, ensuring that your organization's interests are protected throughout the legal proceedings. By having outside counsel lead the litigation process, you can focus on your core responsibilities and minimize the disruption to your daily contract lifecycle management operations.

    Example: Suppose the technology company HeckTech is involved in a contract dispute with a client claiming HechTech has not fulfilled its contractual obligations. The client has threatened to take legal action if the issue is unresolved. Engaging outside counsel with expertise in contract law and dispute resolution can help HeckTech evaluate the strength of the client's claim, develop a defense strategy, and negotiate a resolution that protects the organization's reputation and financial interests. The attorney can represent your organization in negotiations or court proceedings, ensuring that your side of the story is effectively presented. Outside counsel can help HeckTech drill down on case assessment and strategy development, pleadings and motions, legal discovery, settlement negotiations, alternative dispute resolutions, and more.


    #4 - Compliance & Regulatory Matters

    Maintaining compliance with ever-changing laws and regulations constantly challenges contract managers. Outside counsel can help you navigate complex regulatory frameworks and ensure your contracts and business practices align with legal requirements. For instance, if your organization operates in the healthcare industry, you may need a lawyer specializing in healthcare law to ensure compliance with HITRUST regulations.

    Outside counsel can review your contracts, policies, and procedures to identify potential compliance issues and provide guidance on addressing them. Their expertise can minimize non-compliance risk and potential legal consequences, safeguarding your organization's reputation and financial stability. By proactively addressing compliance matters with the help of outside counsel, you can demonstrate your commitment to ethical business practices and build trust with your stakeholders.

    Example: Consider a scenario where HeckTech expands its operations to Australia - a new country with complex labor laws and regulations. Engaging outside counsel with expertise in international employment law can help HeckTech navigate the legal requirements related to hiring, termination, and employee benefits in the new jurisdiction. The attorney can review HeckTech's employment contracts, policies, and practices to ensure compliance with local laws, minimizing the risk of legal disputes and penalties. Outside counsel's strategy may involve the localization of terms and conditions, employee classification, ensuring work permits and immigration compliance, the review of collective bargaining and union regulations, and assistance with documentation and records.


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    #5 - Risk Mitigation

    Identifying and mitigating risks is a crucial aspect of contract management. If you encounter risk situations that fall outside your expertise, outside counsel can conduct thorough contract reviews, identifying potential risks and suggesting necessary amendments or safeguards. For example, if you are entering into a contract with a high-risk supplier, an attorney can review the contract and advise you on the necessary provisions to protect your organization from potential risks.

    Outside counsel can assess the supplier's financial stability, reputation, and track record to ensure that your organization is contracting with a reliable and trustworthy partner. The objective perspective of outside counsel can help you minimize legal and financial risks associated with your contracts, providing peace of mind and protecting your organization's interests. By taking a proactive approach to risk management, you can avoid costly disputes and ensure the long-term success of your contracts.

    Example: Let's say the HeckTech organization is considering joining a joint venture with another company to develop and market a new product. Engaging outside counsel with expertise in contract law and risk management can help HeckTech assess the potential risks associated with the joint venture. The attorney can review the proposed agreement, identify any clauses that may expose HeckTech to unnecessary risks, and suggest amendments or additional provisions to protect the organization's interests. Their expertise in risk mitigation can help HeckTech make informed decisions and avoid potential legal and financial pitfalls. Outside counsel's strategy could involve structuring the joint venture, drafting a joint venture agreement, helping with the management of IP, leading the charge in drafting indemnification clauses, and finalizing the joint venture's tax planning and optimization.


    #6 - Industry-Specific Expertise

    Certain industries have unique legal requirements and regulations. If your organization operates in a highly regulated industry such as healthcare, finance, or technology, outside counsel with industry-specific expertise can provide invaluable guidance. They understand the nuances of your industry and can help you navigate legal challenges effectively.

    For instance, if you are a technology company dealing with data privacy issues, outside counsel with data protection and cybersecurity expertise can ensure that your contracts and practices comply with relevant laws and regulations. They can review your data handling processes, advise on data breach response plans, and help you implement privacy policies that align with industry standards. Their specialized knowledge can help you stay ahead of legal developments and ensure that your organization operates within the boundaries of the law.

    Example: Suppose the hypothetical organization, HeckTech, operates in the financial services industry, which is subject to strict regulations to protect consumers and maintain market integrity. Engaging outside counsel with expertise in financial regulations can help HeckTech navigate the complex legal landscape and ensure compliance with laws such as the Dodd-Frank Act or the Securities Exchange Act. The attorney can review HeckTech's contracts, policies, and practices to identify any potential regulatory gaps or violations, providing guidance on addressing them and avoiding legal consequences. Outside counsel can form a regulatory analysis and compliance framework, lead policy and procedure development, conduct internal audits and compliance reviews, assist with preparing and submitting regulatory filings and reports, screen third-party vendors to ensure relevant compliance, and more.


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    #7 - Time & Resources Constraints

    Contract managers often face time and resource constraints that make it difficult to handle all legal matters internally. Engaging outside counsel allows you to leverage their expertise and resources, freeing members of your team to focus on other critical tasks. For example, if your contract management team is already stretched thin and unable to dedicate sufficient time to legal matters, outsourcing export legal support to outside counsel can ensure that all legal aspects of your contracts are properly addressed.

    This legal work can include contract negotiation, review, and ongoing legal advice. By outsourcing this work to outside counsel, you can ensure that your organization's contracts receive the attention they deserve, leading to increased efficiency and better overall contract management. The additional support provided by outside counsel can help you meet deadlines, manage workload fluctuations, and maintain a high level of contract quality.

    Example: Consider a situation where a hypothetical organization called HeckTech is experiencing a surge in contract volume due to a new business opportunity. HeckTech's contract management team is overwhelmed with the increased workload and struggling to meet deadlines. Engaging outside counsel with expertise in contract drafting and review can help alleviate the burden on the team. The attorney can assist with contract preparation, ensuring that all necessary provisions are included and that the contracts align with the organization's legal requirements. This partnership allows HeckTech's team to focus on other critical tasks while properly managing the contracts.

    IMPORTANT DISCLAIMER: You may not need the help of outside counsel here, so do not jump the gun straight into investing significantly in an outside resource that will need to be caught up to speed and scheduled around. Instead, consider that you may need a technology solution to centralize and automate your processes, such as contract management software. Many contract management software providers provide free demos and trials of their products, so this option is strongly recommended for teams!


    #8 - Cost-Effectiveness

    While engaging outside counsel may involve additional costs, it can ultimately be cost-effective. Their expertise can help you avoid costly legal mistakes and disputes. Additionally, their negotiation skills can lead to more favorable contract terms, saving your organization money in the long run.

    For example, a skilled attorney may be able to negotiate lower prices or more favorable payment terms with vendors, resulting in cost savings for your organization. Moreover, outside counsel can help you avoid expensive litigation and regulatory penalties by preventing legal issues and ensuring compliance. Their proactive approach to risk management can contribute to your organization's financial well-being.

    Even so, outside counsel is and likely always will be expensive. As such, we strongly recommend optimizing your team's existing process before calling the law firms and hiring outside counsel. Contract management software can help you do so easily.

    CobbleStone Contract Insight® is a cost-effective contract management software solution that can be rapidly implemented by contract managers and legal departments of all industries. Its AI-backed interface can save you time, money, and legal resources with a proven track record and easily calculable ROI. Book a free demo today to learn more!


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    *Legal Disclaimer: This article is not legal advice. The content of this article is for general informational and educational purposes only. The information on this website may not present the most up-to-date legal information. Readers should contact their attorney for legal counsel regarding any particular legal matter.

    Topics: outside counsel

    Published: 05/28/24
    Sean Heck

    Written by Sean Heck

    Sean Heck is Content Marketing Manager at CobbleStone Software

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