All GCs are under pressure to control costs. One in Australia is pursuing a novel approach.
According to press reports, Food service company Coles Group is taking out a meat cleaver:
But charged with cutting legal costs by 45 per cent over the next two years, Coles general counsel Richard Dammery has proposed that lawyers no longer be included in the signing-off process for new contracts unless they are specifically invited to by the business.
He also wants to eliminate all legal checks on contracts of less than $100,000.
Linking legal department approval to contracts based upon dollar amount is not news. Most have forms that can be used within certain guidelines.
What is a bit more unnerving here is some of the potential management latitude involved:
Coles insiders believe Mr Dammery’s push for a dynamic legal structure, which gives managers discretion over whether to engage lawyers on contractual matters, reduces accountability and leaves the retailer exposed to potential litigation for anti-competitive behaviour and breaches of the Trade Practices Act.
Any experienced GC or corporate counsel knows that you can’t always let the client frame the legal issue. Or whether the matter needs legal input in the first place.
Someone once said if you think preventative law is expensive, try litigation.
There are some initiatives under way to take a lower cost approach to contract approval and processing. We’ll cover some of them next year.
But until then, consider something like this for that favorite GC on your Christmas list: