Three priority levels for contracts handled by a legal department

The most important contracts handled by a legal department are those with customers. Whoever wants to purchase your company’s goods or services deserves the most attention and creativity. No customers, no company.

Second in priority come contracts with suppliers. Cost and quality, to be sure, bear on how well in-house lawyers prepare those agreements, but the leverage stacks up on the buyer’s side of the table. The legal liabilities and issues may be comparable to sales, but the importance to the company is less.

In third place are contracts for indirect services. If a contract covers something other than revenue production or materials and supplies that go directly into the item sold (direct purchases), the contract applies to “indirect” services. Expenditures on contracts covering maintenance, employment, operations, leases, and so forth are secondary to the costs of goods sold and tertiary to what generates revenue for the company.

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