Core functions of the legal team: supporting customer and supplier facing functions

Practical Law UK Practice Note w-010-5830 (Approx. 7 pages)

Core functions of the legal team: supporting customer and supplier facing functions

by The Centre for Legal Leadership

Sales

Standard support

Standard support relates primarily to the creation of contracts that reflect the needs of the business owners of each business activity described in every clause of the contract. The legal team is then responsible for maintaining, updating and keeping records of use, and retaining copies of those commonly used contracts, such as:

Non-disclosure agreements (NDAs).
Terms and conditions.
Service level agreements (SLAs).
Other agency, reseller and distribution agreements and related company policies.

Standard support also includes:

Reviewing order forms.
Advising on contract amendments, terminations and disputes.
Providing guidelines on how to produce compliant advertising and marketing for the organisation's products and services, and creating processes to help monitor them to ensure the promises match what can be delivered.
Keeping up-to-date with changes in the law that affect your organisation's sales activity.

Non-standard support

Non-standard support applies to less frequent sales activity, such as pitching for unusually high-value work, bidding for public procurement contracts or international sales. In these cases, it's important to know who the organisation's decision makers are and what they can and cannot commit to. Pre-prepared negotiation playbooks covering opening positions, acceptable ranges of negotiating positions on key points and the sign-off required can help protect the organisation (and the negotiators). For further information, see Practice note, How to create a contract playbook.

Be ready to engage in some contract life cycle management when supporting the sales function. This means helping the business understand the contract and ensuring that it can deliver on the commitments made in it. You may need to work with other departments to identify who owns different elements of the contract process and to decide how to record and communicate non-standard items. It is also important to ensure that:

Sales commission policies are reinforcing the right behaviours.
The organisation complies with all competition laws that apply to its sales activities.
The organisation is equipped to deal with any anti-competitive actions by others that affect it.
Any supply chain risks have been addressed in sales contracts. For example, where the organisation is buying goods or services to resell or to incorporate into its own offering, are your sub-contractors willing, able and committed to deliver?

Your colleagues will take it for granted that you and your team are up to date on current law and the organisation's policies. They'll also assume that you will proactively maintain templates, negotiation playbooks and non-standard agreements, and that you will update them to reflect internal management and group structure changes. For further information, see Practice notes, Contract lifecycle management: overview and Demystifying legal technology: designing effective contract management processes.

Marketing and advertising

Rules governing advertising and marketing are becoming increasingly strict, particularly in the financial services, pharmaceuticals and telecoms sectors. As an in-house lawyer, expect to be called upon to:

Clear copy in advertising materials to ensure compliance. You'll need to provide clear guidance and standards for defined owners to follow, and update them regularly. That way, you'll then only need to deal with new issues and exceptions.
Deal with customer issues by agreeing policy approaches with teams (such as customer services, complaints and finance) in the same way that you would for defective product issues and product recalls. Again, you'll then only have to deal with exceptions to the policy and new issues.
Deal with advertising standards, trading standards and regulatory bodies in certain circumstances.
Review distance and online selling policies and procedures, and related changes in data privacy law. Almost all marketing, and much targeted advertising, is subject to this regulatory regime.
Understand the legal aspects of branding. Brand concepts, logos and typefaces are complex, expensive and high-risk areas for organisations with strong public identities. A working knowledge of intellectual property (IP) law is essential here.

Procurement

When buying products and services, and selecting suppliers, your organisation will look to your department to protect its legal interests. This means you will be involved in some or all of the following:

Drafting NDAs, purchasing terms and conditions, purchase order forms and requests for proposals (RFPs).
Understanding the impact of mandatory legislation on purchasing, such as:
- import and export procedures;
- cross-border product and services standards; and
- modern slavery, anti-bribery and money laundering compliance.
Understanding where your contractual commitments to suppliers or regulatory undertakings force non-negotiable obligations back up your supply chain to ensure your own compliance.
Preparing contract playbooks and training procurement staff on them. For further information, see Practice note, How to create a contract playbook.
Preparing appropriate terms and conditions for exceptional procurement projects.
Advising on public procurement requirements, where appropriate.
Reviewing supplier bid responses and negotiating with suppliers.
Advising on contract amendments, terminations and disputes with suppliers.
Ensuring that you know when and how you and the supplier can exit or change the contract based on legislative, regulatory, supply or other economic change (for example, due to the discovery of modern slavery issues in the supply chain).
Understanding back-to-back risk where supplier performance or termination affects your ability to deliver on your sales contracts to price, time or specification; or even at all.
Dealing with end of life, exit arrangements and transition to new suppliers.
Supplier insolvency.

You will also need to provide advice on finance, tax and risk issues. In addition, you may need to provide guidance on the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (TUPE) if a procurement deal involves any of your employees transferring from your organisation to a new employer or vice versa. For further information, see Practice note: overview, TUPE: overview.

Your organisation's values and ethics are another key consideration. For example, as well as conducting supplier due diligence, you'll need to ensure that your suppliers comply with your policy approach to certain areas, such as:

IT security.
Health and safety.
Expenses.
Legislation.

This will be particularly important if your company has decided to hold itself to a higher standard than that required by law or simply a different standard to that of a supplier in another jurisdiction.

For further information, see Practice note, Working effectively with the procurement team.

Product and service development

Legal has a key role to play in product and service development. Getting involved at an early stage will give you an opportunity to review initial plans and ensure that there are no obvious legal impediments to producing and marketing the new product or service. Indeed, sometimes your advice may help improve the offering; even if only to make it legal to sell. Other important contributions you can make include:

Protecting sensitive information by way of NDAs.
Negotiating research and development and consultancy agreements, joint ventures and other third party collaborations.
Securing IP rights from research or development undertaken by third parties.
Ensuring non-standard software is correctly owned and licensed, and that data processing flows are understood, documented and compliant with data privacy law.
Advising on regulatory requirements, consumer law and product safety issues.
Considering consumer law and advising on product recall policies.
Making your organisation's insurers aware of the new product plans.
Protecting IP and engaging patent or trademark attorneys.
Advising on supply chain and manufacturing agreements.
Updating your advertising, marketing, sales contracts, SLAs and playbooks for the new product or service.
Assessing any competition law issues in relation to the new products and the markets in which they will be sold.

Mergers and acquisitions

Mergers and acquisitions are complex projects for all the major functions in an organisation, and the legal team is no exception. If your organisation merges with or acquires another enterprise, your role will include:

Executing NDAs, reviewing terms sheets and any interim restrictions.
Developing a transaction management plan.
Developing a post-transaction (dis)integration plan and a related legal resource and spend budget. Make this part of the transaction cost budget rather than a part of your business-as-usual budget.
Managing confidentiality within your organisation.
Where your organisation or the other party are listed, managing an insider list and communications (planned and emergency responses) to the stock market authorities involved.
Budgeting for external counsel in the transaction costs.
Reviewing advisors' engagement letters.
Assessing the transaction structure.
Managing the data room or due diligence.
Project managing the transaction.
Preparing or reviewing documents and managing the negotiation process. These include pre-agreed negotiation positions, the business stakeholders who can make or authorise decisions and, critically, what the walk-away positions are.
Helping management avoid problems that may reduce the value of the deal. For example, lock-in arrangements for acquired management that prevent the integration of sales practices, systems and staff.
Assessing requirements for warranties and, if you are the vendor, coordinating the disclosures.
Assessing whether any competition clearances or regulatory notifications are necessary. If so, managing the notification and clearance process and ensuring that the transaction is not implemented before approval.
Working with HR on staffing, pensions, redundancies and TUPE issues.
Assessing obligations to the stock exchange and regulators.
Liaising with corporate communications and the board regarding media announcements and your organisation's response to market speculation.

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