How general counsel are becoming key partners in building resilient and compliant supply chains
For many in-house lawyers, the importance of building strong relationships with the CEO, CFO, CMO, and other business leaders is pretty clear. Yet, the partnership between the general counsel and the supply chain management team often remains undervalued.
The COVID pandemic exposed vulnerabilities in supply chain stability and certainty. Since then, the world has continued to face new supply chain disruptions — from geopolitical tensions and trade restrictions (tariffs) to extreme weather events and cyberattacks targeting global logistics networks.
Today, companies face a new normal in which supply chains are no longer simply about efficiency and cost — but about resilience, transparency, and proper governance. In other words, supply chains have shifted from being an afterthought to a primary focus within the C-Suit.
As a result, the general counsel’s role in supply chain matters has expanded dramatically. Legal teams are no longer brought in just to review the contract post-agreement. They are increasingly expected to be strategic partners in maintaining a supply chain framework that is agile, legally compliant, and reputationally sound.
Highlights:
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What is supply chain management?
General counsel’s expanding role in supply chain matters
Navigating the uncertainty of Trump-era tariffs
What is supply chain management?
Supply chain management involves the process of managing the flow of goods, services, information, and finances as they move from the origin point to the end customer. It involves coordinating and integrating these flows both within and among companies and countries. Supply chain management is comprised of the following:
- Planning: Forecasting demand and preparing supply chain operations accordingly.
- Sourcing: Finding and managing suppliers of raw materials and services.
- Manufacturing: Converting raw materials into finished products.
- Logistics: Storing, transporting, and distributing goods to customers.
- Returns: Handling defective or excess products (also known as reverse logistics).
- Modern supply chains also incorporate:
- Digital infrastructure for real-time visibility.
- Regulatory tracking mechanisms to ensure legally compliant sourcing.
- Cybersecurity protocols to protect supplier and logistics data.
- AI and blockchain systems for forecasting, authentication, and compliance monitoring.
The smallest disruption, such as port delays, cyber breaches, or regulatory violations, can spread quickly across industries and markets. Accordingly, the general counsel plays a crucial role in fortifying and future-proofing the company’s supply chain.
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General counsel’s expanding role in supply chain matters
Modern supply chains span multiple regulatory regimes — from forced labor laws and environmental reporting obligations to AI ethics and digital trade rules. The general counsel ensures these obligations are met and helps the business adapt to evolving standards and enforcement trends.
The general counsel also oversees well-drafted contracts that anticipate shifting legal, commercial, and geopolitical conditions. Key responsibilities include negotiating appropriate liability clauses, governing law terms, Force Majeure provisions, and remedies while ensuring supplier and subcontractor compliance.
As Environmental, Social, and Governance (ESG) becomes integral to investor expectations and consumer trust, the general counsel helps create and enforce appropriate sourcing rules and policies. This includes due diligence protocols, audit rights, and tools to track performance against regulatory and ESG requirements. Similarly, supply chains generate vast quantities of data — making them high-value cyber targets. Forward-thinking general counsel collaborate with IT and compliance to implement cybersecurity standards across the supplier network and prepare breach response plans.
In recent years, geopolitical shocks, pandemics, and raw material shortages have become routine risks businesses must navigate. General counsel help develop playbooks to respond quickly, invoke contractual protections, and manage regulator or media responses in real time.
To elevate their impact, general counsel should become embedded participants in supply chain planning, not just risk reviewers after the fact. This means:
- Attending supply chain strategy sessions.
- Holding regular meetings with logistics and procurement leaders.
- Educating internal stakeholders about legal issues and global trade.
- Building flexible contracts that handle tariff shifts, AI compliance, or dual-sourcing contingencies.
- Sharing and interpreting legal and compliance data for proactive monitoring of high-risk geographies or industries.
- Championing tech enablement, such as artificial intelligence, blockchain, and contract lifecycle tools that improve transparency and auditability.
- Leading cross-functional governance to help integrate legal perspectives into internal controls, procurement policy, and reporting.
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Navigating the uncertainty of Trump-era tariffs
One of the most impactful developments in global supply chain management over the past decade has been the wave of tariffs introduced by the non-consecutive Trump administrations. Particularly, the April 1, 2025 “Liberation Day” which used emergency powers to implement a broad 10% tariff, followed by “reciprocal” tariffs reaching up to 50%.
Since then, the administration has announced, withdrawn, imposed, and threatened tariffs with practically every US ally or foe in the world. These actions have reshaped sourcing strategies, increased costs, and intro, increased costs, and introduced significant volatility into global supply chains. The uncertainty of what tariffs will apply and when makes the general counsel’s job even harder, as the legal and strategic implications of “getting it right” are significant.
Tariffs can dramatically alter the cost structure of supply contracts. General counsel must work closely with procurement and finance to ensure that long-term supply agreements have flexible pricing, tariff-adjustment clauses, or appropriate risk-sharing mechanisms.
Companies attempting to shift supply chains away from high-tariff jurisdictions, like China, may face legal issues involving country-of-origin misclassification, trans-shipment violations, or outright customs fraud.
Legal teams must maintain vigilance in guiding the business though complex regulations, where the rules may be ambiguous or seemingly illogical. They are tasked with conducting due diligence on routing practices that may risk compliance or attract scrutiny from administrations known for assertive enforcement actions.
Heightened scrutiny by customs officials means legal departments must ensure proper classification, valuation, and documentation of imports. Failure to comply can trigger audits, penalties, or reputational harm.
This, in turn, means that general counsel are increasingly involved in broader trade strategy issues. They often work with government affairs teams to monitor policy developments, engage in industry coalitions, and sometimes participate in lobbying efforts related to tariff exclusions or trade policy in general.
In terms of more immediate tariff-related actions, general counsel should consider the following:
- Include model clauses for tariff escalation or relief, import contingencies, and alternatives if certain regions become economically unviable.
- Collaborate with supply chain management and finance to identify where the business is most exposed to trade policy changes — and assess whether those exposures are strategic, tactical, or operational.
- Integrate tariff planning into M&A due diligence, supplier onboarding, and joint venture structuring. This is especially important in industries dependent on Asia-based manufacturing.
- Stay alert to political developments and be ready to move quickly. As we have seen, the risk of rapid shifts in trade policy is very real.
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What do I do next?
Smart general counsel are already thinking proactively about their role in helping manage company supply chain issues and, more importantly, what steps they can take now to be effective in that role. Here are a few to consider:
Operationalize supply chain management
Partner with the procurement and compliance teams to map high-risk areas and align sourcing with corporate commitments with company policies as well as legal requirements like the EU Corporate Sustainability Due Diligence Directive and US forced labor import bans.
Embrace technology transformation
Embrace and participate in initiatives to “digitize” procurement, contracts, and supplier management. Be ready to address legal questions around AI usage, data privacy, and blockchain contracts embedded in supply chain tech stacks.
Create a supply chain crisis playbook
Collaborate across functions to build a crisis playbook to respond to supply chain disruptions. Your playbook will include readiness around export controls, government restrictions, and contractual levers during supply chain emergencies.
Be proactive
One thing general counsel cannot say is that they were not warned about the Trump trade policy plans, in particular, the use of tariffs to drive US policy objectives. While you may not have thought it would actually happen, it has, and there is little sign of trade tariffs abating anytime soon. In an unpredictable trade environment, driven by an administration focused on implementing tariffs, general counsel must help the business stay agile. This includes:
- Structuring contracts to absorb or pass through tariff-related costs.
- Conducting periodic tariff exposure assessments.
- Advising on customs compliance and country-of-origin classifications.
- Working with policy and regulatory teams to monitor political developments that may signal new trade actions.
The legal department cannot be a bystander when it comes to supply chain management. A general counsel who proactively partners with the supply chain function is not just helping manage risk; she is maximizing value creation and minimizing value destruction.
If you are a Practical Law subscriber or use Thomson Reuters solutions, you have access to a wide range of supply chain and procurement resources to support your goal of finding ways to partner on supply chain issues.
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