A respectable view holds that in-house lawyers should draft and interpret contracts, possibly negotiate them, but not administer them. The term “contract management” means different things to different people, but is roughly coterminous with “contract administration.” Exari tried in a recent survey to gather some data about practices in this area. Their white paper, Corporate Counsel Contracts Survey Report, Dec. 2011 at 13, includes two pie charts. One, covering the sell side of contracting, shows that the legal department “owns contract management” in 66% of the approximately 100 respondents, with sales “owning” it in 17% and “other” in 17%. As might be expected, when companies buy goods and services, the percentage of legal department ownership slips, to 59%, the share owned by procurement reaches 28%, and “other” has 13%.
The distinction between sell side, which generates revenue for the company and may require legal review of the buyer’s contract form, and the buy side, where a company has more leverage and a procurement department to deploy it, makes sense. With both sides, the Exari survey suggests the law department has oversight responsibility more than half the time.