Managing contract reviews can be a challenge for your legal team. Companies have a lot of financial and legal requirements when it comes to running a business. Every contract that gets signed is different and when someone has a request about a specific contract detail, finding that information can be manual, time consuming and frustrating.
In this article we address the basics of who, what, when, where and why as it relates to contract reviews. Whether you’re fielding a request from your CEO, pulling documents for your latest insurance audit or trying to review and reduce risk for customers, there are many unforeseen situations that are important to understand at a high level.
Who: Typically executives like the VP of Sales, CFO and CEO are asking the legal team or company general counsel for specific contract data. Specific requests can also come from investors and at times, directly from the IRS or SEC. As the legal team, it’s essential that you respond to these requests quickly and with the most relevant information possible.
At times the companies board of directors also may have special requests for general customer information as well. Things like the number of customers under contract or the average billing cycle for customers over the last 12 months.
What: We've already covered the 'what' at the beginning, but again this can be any request about a specific customer contract. It could be information that they need for an impending audit, or it could be a more general line of questioning around contracts. Sometimes this information is covered in the purchase order but other times its buried in the legal terms of the document.
They may need to review customer contracts to help close new sales deals or locate a similar contract to compare with a current deal sales is working on. They may need to pull certain sections of past contracts to update current ones. The “what” is the actual request for information that leads to contract review.
When: These requests usually come 10-15 times a year depending on company stage and industry. When a company is younger, there may be less requests for specific information because you don't have to deal with SEC audits like public companies do. But as your company grows, its really important that you implement a tool that can help field all of these requests. A growing company has many more issues to solve and moving pieces that legal needs to keep track of. Do yourself a favor, and save time with a tool.
Why: This is simple. As a general council, you want to help your company do several things. One is reduce risk from customers and improve overall company legal compliance. Another is to help speed up sales cycles for your sales team by improving the sales contract process. Everyone wants to pay the bills and keep the lights on. If you can assist in doing s few of these things, no doubt your company will continue to grow and be successful.
Where: LinkSquares of course! When you have a pile of contracts to sift through, the basic document finder is not enough to review detailed legal text. LinkSquares lets you organize your documents and never miss a single obligation, task or approval when it comes to auditing reviewing, and searching through them.
Best of luck as we help you get prepared for your next contract review request!