Contract Review Process Round Table Corporate Counsel Section April 11, 2007 1
Why is a contract review policy important: Control measures l Identifies types of documents that require legal review l l Communicates an approval procedure l l Creates awareness of the need to have contracts reviewed by legal Establishes signature authority l l contracts, letter agreements, amendments, $ amount, etc Limits the number of signatories Sarbanes-Oxley compliance (public company) 2
Why is a contract review policy important: Other Benefits l Organization of documents l Centralize process l Tracking capabilities l Uniformity of legal terms l Minimize any potential legal risks and liabilities l Monitoring l inserting legal review into the contract process has a side benefit of being able to orchestrate other company review and approvals, like finance, tax, business operations, etc. 3
How to get it implemented l Everyone has a role l Can’t just be driven by legal. l Business, Finance and legal departments must work together l Executive Buy-in l Must have support of Executives l (CEO, CFO, Department Heads) 4
How to get it implemented l Get the word out l Announce the policy and disseminate it. l Part of new hire presentation l Educating veteran employee l Highlight signature authority area. l Train all signatories on the policy. l Confirm their understanding that they cannot sign a document unless it has Legal’s approval. l Remember - It’s a team effort 5
How to get it implemented l Draft a policy that works for your Company l Ensure your office is set up to handle the contract review workflow. l Manage turn-around time 6
The Policy l Identify the role Legal is to play in your Company Lead role in negotiating l sign off on already negotiated deals l Review and comment on changes to form docs l It is all up to you. l 7
The Policy l Elements to include in any Policy l Requirement of Legal Review for all contracts l Prohibit oral agreements l Describe Legal’s responsibility l Describe contracts that do NOT require legal review 8
The Policy l Describe logistics of initiating legal review l Describe Signature and Delegation Authority 9
l Sample Forms 10
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