Tip 2: Legal in The Lead

Introduction

After having advised in the previous post, which you can read here: https://amstlegal.com/tip-1-80-template-20-no-template/, that your company should work towards structuring it to the ‘80% template – 20% no-template’ rule whenever possible, the next step is to let legal be in the lead.

Let Legal be in the lead

When you have applied the 80-20 % Rule, you are ready to take the next step. The next step that can improve your contract processes concerns creation of templates and followingly, getting the necessary personnel up-to-speed. For this, an advice from us at AMST Legal is to let legal be in the lead when creating and introducing new contract templates. This shall apply to all contract templates that are within the plan – i.e., 80 % of your contracts – according to the AMST Legal approach.

Do you find this to be unnecessary to point out?

Having legal in the lead on creating and rolling out templates might seem to be very obvious. Especially for e.g. your Terms & Conditions, DPA (Data Processing Agreement), etc. In reality, this is not always the case, as the practice may be to have legal in the lead, but ends with other rogue approaches that we will explain below. Thus, it is not always so obvious, why this is necessary to point out.

Some examples of what AMST Legal have seen at companies are the following: 

• With small (local) businesses, start-ups and scale-ups: the founders and/or the commercial team have downloaded templates from free online resources or made templates themselves. All very acceptable and completely understandable when starting a company, but if your company grows or becomes more mature it is important to review these old templates and make sure that you discuss this with Legal. 

• With (large) corporations: the company has good templates, but the commercial / operational team has their own individual versions (not approved by legal) that they like to use and amend for specific products/services. Example: I once advised a company of 100 people where there were 40 versions of the same Sales Contract – one for each product! We were able to bring it back again to 3 versions.

Therefore, make sure that Legal, i.e. an external lawyer or your internal legal department, is in the lead when making and rolling out new contract templates. We see it way too often that management or the commercial team use templates that legal have not approved. This can create various problems later on.

AMST Legal Recommends

Our recommendation in this regard is (obviously) to let Legal review and control all contract related documents.

Legal should be involved with the following contract processes:

• The obvious ones that is not only pure commercial contracts (like a sales contracts, DPA or partnership contracts), and also for
• documents where you might be of the opinion that they are purely commercial (e.g. Service Level Agreement, Pricing/Offer Documents or Engagement Letters). 

In other words, legal is crucial for the inital contract process. Legal should control the drafting, implementation and filing of the template contracts to make sure that the templates are managed correctly by the company. However, note that this does not mean that legal have to complete and send out specific contracts made from contract templates.

Conclusion

To sum this article up, we at AMST Legal believe that it is in the company’s best interest to really let legal take the lead in contract processes. It might seem easier to create your own templates, but that can lead to other worrying moments that is best to avoid. If legal is taking the lead, the idea of improving your contract templates can improve rapidly, while requiring less help from legal.

Do you feel like your contract process align with the two problem areas we described and wish to improve your processes? Reach out to us or book a consultation with us at AMST Legal to recieve specialized advice tailored to your specific needs.