I’ve said it before, and I’ll say it again—contracts are not legal documents; they are business documents that memorialize business transactions.
While many in-house counsel recognize the importance of being business savvy, partnering with business clients, and weighing business needs with legal risks, I believe there should be a stronger emphasis on mastering business skills for in-house legal professionals. And it all starts with better business education for lawyers. Ongoing business education equips legal and contracts professionals to understand and capture evolving business and technical developments in contract negotiations. This article explores the benefits of business education in contract negotiations and how in-house counsel and contracts professionals can leverage it.
Benefits of Learning the Business
Communication and Persuasion
Lawyers and contracts professionals must articulate terms clearly and persuasively in a contract to achieve mutual assent with the least amount of friction. Persuasion is an art, and requires training in psychology, marketing, and communications to successfully influence the other side to accept one’s terms, or position. Additionally, a well written contract includes all the necessary terms and conditions within the four corners of the document in clear and uncomplicated wording. These terms and intentions must be communicated clearly during negotiations, both internally to business stake holders, and externally to counterparties through email, redlining comments, and verbal communications. Receiving regular training on communications, and sales will empower the contract managers in their contract negotiation phase.
Problem-Solving and Critical Thinking
Contract negotiations can escalate quickly if parties are inexperienced or uneducated on the subject matter. Changing corporate, economic, and political conditions can impact a deal mid-negotiation. Quick decision-making and analytical skills are essential for resolving conflicts and reaching agreements efficiently. This includes leveraging inter-departmental relationships, keeping up with changing external factors like the economy, and internal factors like manufacturing and production data. Identifying potential risks and devising strategies to address them quickly is crucial in avoiding disputes. Project management, dispute resolution, and critical thinking training for contracts professionals helps them analyze the situation in an objective manner and provide practical and timely solutions or alternatives.
Stakeholder Relationship Improvement
Most legal counsels yearn to have a seat the executive table but lack the foundational business knowledge to engage in critical conversations. Often, they are missing core accounting, sales, and investment knowledge that withholds them from adding valuable advice, receiving budget increases, and career advancements. They are experts at legal acumen, but do not know how to translate the impact in business terms effectively. This makes them appear as the gatekeepers, or naysayers and strains their relationships with the rest of the company. Having a strong business background or ongoing business training helps legal and contracts professionals understand their business stakeholders and clients’ needs and facilitates in communicating their legal concerns. This improves stakeholder relationships and encourages them to bring the legal or contracts team earlier into important business conversations.
Finance Strategy and Accounting
Contracts carry a high volume of financial data beyond the pricing terms of the agreement. Understanding financial accounting, strategy, statistics, and economics helps predict their impact on business deals, operations, earnings, and profitability. It also reduces the risk of miscalculations in the contract. Additionally, financial training helps in improving a contract or legal department’s own budget, and their relationship with the finance department. Most general counsels and in-house counsels cannot create their own profit and loss statements, and balance sheets. They don’t know where the money is spent and can be saved. Receiving finance training or hiring someone with a financial background in the legal department creates clarity and confidence around legal budget discussions. It empowers the leader to request more funding to carry on the department’s functions without delays, burnout, and turnover.
Technical knowledge
Business counsels and contracts professionals must understand the nature of the business they are in so they can negotiate contracts with clarity and confidence. They are representatives of their company, and must know what they are making, selling, and buying. Spending time on the production floor, with operations leaders, and obtaining core technical training in the products and services offered by their company speeds up negotiations, impresses the counterparty, and reduces the risk of misalignments.
Project Management
Project management is the process of planning, organizing, and managing resources to achieve specific objectives within a defined timeline and budget. It lays the foundation for the entire project and sets the direction for all subsequent tasks. Every legal counsel and contract manager should have some form of project management training to help optimize their contracting process, implement a CLM, monitor a contract’s lifecycle, and achieve the department’s goals in a timely and cost-efficient manner.
CLM Optimization
A strong project management background or ongoing training will enable the legal or contracts department to procure the best CLM for their requirements, and to optimize it to provide reporting, analytics, and integration with other business software. Contract data should be extracted and understood to facilitate strong deals and reduce the risk of breach. Understanding business benefits of a CLM and deploying those tools for the organizations will facilitate efficiency, transparency, and empower the stakeholders as well.
Contract Intelligence
Many companies require their contract managers to own the entire transaction, which includes monitoring contract performance, tracking changes, and reporting any breaches. Most CLMs can support these responsibilities, and provide necessary data to streamline the contract’s lifecycle management. Additionally, understanding past contract performance data can help predict future contract breaches and create more practical playbooks, which helps contract negotiators included protections or collateral in the contract before it is renewed. Contract data analysis requires data analytics training to gather, organize, and report critical contract data to relevant parties.
Obtaining Business Education Mid-Career
It is not easy to go back to school mid-career or mid-life. It is expensive and time consuming. Thankfully, there are many e-learning and traditional academic options available to lawyers and contract professionals to enhance their education without sacrificing too much time away from work and family. Tuition reimbursement may also be available from employers due to significant benefits to the organization from such training.
Books and Self Study
There are several easily available resources to improve negotiation and contract negotiations de-escalation including Nada Alnajafi’s book, Contract Redlining Etiquette, and the Contract Nerds Blog. Another great resource is Negotiation Made Simple by John Lowry. I like it for its content, and its cover.
Conferences
CrushLegal Academy of Success (CLAS) is a CLE approved MBA-style learning event for in-house lawyers and legal professionals to make them better business partners to their clients. Their upcoming conference, CLAS 2025, from April 7th to 9th will offer several courses over the course of its three-day program. Attendees can join virtually or in person at the Chicago Deloitte location. CLAS 2025 is carefully designed to educate and empower lawyers and legal teams with practical education on business topics including leadership, burnout, accounting and finance, marketing, contracting, and innovation. CLAS’s graduate school level courses are taught by members of academia (Harvard Business Extension and Kellogg School of Management) and industry experts. CLAS 2025 courses provide up to 12 CLE credit hours in IL, TX, FL, with CA and NC pending, and in other approved jurisdictions like NY.
Another great event is Business Education by Association of Corporate Counsel in partnership with the Boston University Questrom School of Business. This event is available exclusively for in-house counsel and is taught by faculty members with extensive experience in management education for lawyers.
Project Management Certification
Project Management Professional (PMP) certification from the Project Management Institute (PMI) is the gold standard in the field. For those just starting out, the Certified Associate in Project Management (CAPM) is a solid entry-level choice. If you’re working in an agile environment, the Certified ScrumMaster (CSM) is a widely recognized option. Several universities and trade organizations also offer project management training and certification programs.
Master of Business Administration
A Master of Business Administration or MBA is a graduate degree that provides theoretical and practical training for business management. It is designed to help graduates gain a better understanding of business management functions like sales, marketing, operations, finance, and leadership. It is typically a one- or two-year program with full and part time enrollment options. MBA programs cover a wide range of topics, including accounting, finance, marketing, organizational behavior, economics, management, and business ethics.
Executive Master of Business Administration
An Executive Master of Business Administration or EMBA offers the same training as an MBA, but in a different format to suit fulltime employees and executives. EMBA programs are available in person and through remote learning. Many business leaders and executives opt for an EMBA as they are designed for experienced professionals and allow them to continue working while earning their degree.
Business education is a cornerstone of success in contract negotiations. By equipping contracts and legal professionals with business skills like negotiation expertise, financial training, technological proficiency, project management, and CLM optimization, companies will experience a massive increase in productivity and growth.
As commercial contract complexities grow, continuous learning is essential for staying ahead in the evolving business landscape. Investing in their legal and contract team’s business education will optimize contract negotiations and management, leading to improved efficiency, reduced risks, and sustained growth.
