‘Commercial Innovation’ is increasingly recognized as a critical discipline for business survival and the delivery of value. Back in the 1940's, Nobel prize-winning economist Joseph Schumpeter made the observation that to achieve success, technical invention must be accompanied - sometimes even led - by commercial innovation.

The 2018 HBR Consulting report on in-house legal spend contains interesting data. It reveals a continuing, if modest, increase in budget and a tendency towards increased headcount. Of the various efforts to increase efficiency, the adoption or use of technology appears the most prevalent. Meantime, the hourly rates of outside counsel apparently continue to increase.

Is your organization on the path to commercial excellence? McKinsey, the global strategic consultants, are just the latest to grasp the critical role that commercial competence plays in delivering performance and growth. In a recent article, they observe that leading organizations ‘are now using superior execution rather than better offerings to outperform incumbents and drive growth’.

“Memorial Sloan Kettering is in turmoil over a deal officials made to share cancer patient data with a for-profit artificial intelligence start-up.”

Contracts – and especially contract management – continue in many organizations to be seen as largely administrative. For those who perform tasks in this area, that is never good news. Not only does it mean they lack influence and status, it means they are also often seen as dispensable.

In this edition:

• Keeping pace with change – 3 major questions for commercial teams.
• AI is struggling to make inroads within corporate legal departments.
• Is outsourcing in trouble?
• California introduces its own GDPR.

A weekly update on contract and commercial news and trends.

An article in Inside Counsel poses the question “Why would company executives want the General Counsel to report to the CFO”? It highlights the following as potential reasons:

Commercial management is about understanding markets, then turning that understanding into an appreciation of the capabilities needed to meet market requirements and determining whether those capabilities can be developed, sustained and turned into profitable operations.

Technology lies at the heart of every modern business. Yet increasingly organisations don’t own their technology – they buy in services from a range of providers. The job of the CIO has shifted to that of a business enabler and innovator, knowing less about the technology, but much more about its business impact and needing to understand the requirements of the market.