•;We train contract administrators on litigation, compliance, and legal issues in contract
management and administration. Each of our 20 operations worldwide goes through
training from an in-house counsel team travelling from Italy to give a three-day course. This
is formally updated at least every two years, and ongoing training and communications are
held, as well as in informal situations when litigators work with the business on local disputes.
•;We instituted a process: Every time there is a claim of a certain importance, the contract
administrator informs legal immediately so we can intervene at the very first step, facilitating
•;We involve outside lawyers when we’re not sure about an aspect of local law. For example,
in Kuwait recently, we needed an opinion, and in Kazakhstan, we often check with outside
counsel to make sure the contract has not omitted a local law aspect. We generally approach
settlement internally since we have highly qualified people inside to negotiate terms.
•;We maintain a sort of handbook called “Golden Rules & Silver Guidelines,” which covers
legal aspects and guides business people in negotiating and executing contracts. We work side
by side with them on this, constantly repeating the principles, to avoid litigation and comply
with the law.
•;A key part of reducing costly disputes is to ensure that our contract administrators
proactively guide project managers in what procedural steps should be followed. If this is
done well, there are few disputes because the contract is clearer from the start.
1. We reduced Saipem’s legal expenses by 42 percent since 2006, almost completely through
settling ahead of litigation and reducing disputes altogether. Our legal expenses, not including
contract administration, were £ 5, 5 million last year.
2. We have far less litigation— in the last three years, only 3 cases went to court.
3. We have far fewer claims, and virtually no disputes on contractual issues. Today’s disputes are
on technical issues.
4. Lawyers in Saipem are more gratified by this work; they feel closer to business people and
deeply involved not advising what to do, helping decide what to do.
At the beginning, many project managers didn’t understand why they needed a good contract
administrator; they felt it was their job. Yet often, they didn’t read the contract.
It was a challenge to coordinate all the contract administrators, suddenly reporting to the legal
department, so it took regular communication. Our time with them in-person helped a lot.
Integration of lawyers with our business operations is essential and ongoing, and we continually see
positive results. We are always reminded that lawyers and engineers are different species; integration is
a process that will never end.