Why Emerging Life Science and Pharma Companies Should Apply the CRO Model to Contracts

The life sciences and pharmaceutical industries are experiencing significant transformation, driven by digital advancements and scientific innovations. Emerging companies face the challenge of rapidly bringing new products to market, often relying on partnerships that necessitate the swift execution of numerous contracts. Managing this influx can overwhelm in-house legal teams, diverting their focus from strategic initiatives into the weeds of day-to-day contracts work at a time when they need to elevate their focus more than ever to deals, product launches, acquisitions and more. And, because this type of early-stage work is often marked by major fluctuations in demand, it’s difficult for in-house teams to efficiently manage workflow.

While this may sound like a human resources problem – the traditional solution for which has been to staff up – in fact it should be reframed as a specialization problem. This scenario mirrors the evolution of Clinical Research Organizations (CROs). Pharmaceutical companies recognized that while they excelled in drug development, the complexities of clinical trials and regulatory compliance required specialized expertise. By outsourcing these functions to CROs staffed with industry insiders, they could concentrate on core competencies and expedite product development.

A similar shift is taking place in legal operations. Pharma and life sciences companies are finding that relying on internal legal generalists for specialized contractual needs is not only inefficient but also costly. Even attorneys with extensive contracts experience may lack the deep industry knowledge necessary to efficiently handle agreements that are standard in life sciences, such as clinical trial agreements, manufacturing and supply agreements, research and development agreements, licenses, CRO agreements, material transfer agreements, distribution agreements, GPO agreements, master services agreements and the like.

Until recently, there were few alternatives to handling this work internally or through traditional outside counsel arrangements. Today, industry leaders are increasingly turning to specialized legal service providers with deep life sciences expertise. This shift puts companies back in control of their resources and their priorities and enables organizations to reallocate their internal legal resources to strategic priorities while ensuring that critical contracts are handled with speed and precision.

The general counsel at an emerging biotech company puts it well: “Before we shifted to an outsourced model, it was taking our internal resources more than two weeks for every round of revisions on our clinical trial site agreements and too much of my time was spent thinking about or reviewing agreements. Now those agreements are being turned around as quickly as the next day, and I don’t think about it at all.”

This efficiency significantly impacts business operations, particularly in accelerating clinical trial timelines and reducing bottlenecks. Whether an organization chooses to fully outsource its legal needs or maintain a hybrid model, leveraging specialized outside contracts teams can manage workflow fluctuation, provide flexibility and the option to scale quickly if opportunities arise. General counsels can redirect their focus to strategic initiatives, and executives and CFOs of companies without in-house counsel can rely on industry experts to navigate complex agreements effectively.

No matter who oversees legal in your organization, managing day-to-day contract work internally—much like running all clinical trials in-house—is becoming an outdated approach. Industry innovators, including many international firms with billions in funding, are using outsourced legal resources as a competitive advantage, allowing them to move faster, execute more deals, and maximize more value out of their organization.

Brad Schoenfeld is a transactional partner at KO Law, a Colorado-based firm that specializes in contracts for life science companies. KO is one of the only firms in the nation with a dedicated contracts team comprised of attorneys and contracts managers with significant bioscience and pharma experience. Reach Brad at [email protected].