Corporate Counsel University
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1 Corporate Counsel University Contracts Part II: Review, Approval and Management Presented in coopera.on with Onit, Inc. P. Keith Daigle Senior VP, Legal Affairs & General Counsel Nestle Health Science Pamlab, Inc ScoB Depta General Counsel Ac5ve Power, Inc. Stasha Jain In- house Counsel and Account Manager Onit, Inc. Elitza Meyer Senior Counsel McKesson Corpora5on May 18, 2015 Dallas, TX
2 Session Contracts Part II: Review, Approval and Management Presented by: P. Keith Daigle, Senior VP, Legal Affairs & General Counsel Nestle Health Science - Pamlab, Inc. ScoN Depta, General Counsel & Secretary Ac5ve Power, Inc. Elitza Meyer, Senior Counsel McKesson Corpora5on Paul Zengilowski, Client Development Execu.ve Onit, Inc.
3 Involvement of non- lawyers (e.g., paralegals) in contract review
4 Non- Lawyers and Contract Review Working with Paralegals / contract specialists and internal clients Commonali5es and differences in approaches Materials Tips
5 Working with Paralegals and Contact Specialists Keys to success: Training Clear expecta5ons Support
6 Working with Internal Clients Team Involvement Paralegals or Contract Specialists Keys to success: Ra5onal mutual expecta5ons Consider Self- service tools Training
7 Takeaways and Tips Understand history and expecta5ons Rela5onships are key Collaborate with team/client/process experts but AVOID process for the sake of process Tools and materials
8 ACC Resources Leading Prac5ce Profile (2014): Leading PracKces in Law Department Staffing: AllocaKng Internal and External, Lawyer and Non- Lawyer Resources to Drive Value hbp:// Program Material (2013): Law Department Management: Outsourcing vs. Insourcing, Controlling Legal Costs (and maintaining sanity) hnp:// Leading Prac5ce Profile (2004): Using Non- Lawyer Personnel to Help Perform Legal FuncKons hnp://
9 ACC Resources Ar5cle (2012): Using Your Contract Playbook as a Training Aid, by Jack O'Neill hnp:// Program Material (2012): A Play- by- Play Guide to CreaKng a Contracts Playbook hnp:// Sample Form & Policy (2012): Procurement Contract Playbook hnp:// Sample Form & Policy (2008): Guide to Reviewing Contracts, by Thomas Yih hnp:// Sample Form & Policy (2012): Non- Disclosure Agreement (Playbook) hbp://
10 CONTRACT REVIEW and APPROVAL PROCESSES
11 SubmiBal for Legal Review be Required. q When will Legal Review Suggested Thresholds All contracts Third- party ini5ated contracts v. company ini5ated with approved template Financial value or exposure. Indemnifica5on Subject maner Term Amendments, nova5on, renewals of previously approved contracts.
12 q Process Form of request. Manner of subminal Informa5on required Include exhibits, appendices, anachments, other terms or condi5ons referenced but not inserted Suppor5ng documenta5on.
13
14 Legal Approval q CondiKons Ø Uncondi5onal approval. No changes. Legal approval complete if other party makes no changes Ø Approval condi5oned on revisions required by Legal Revisions required by legal must be inserted Legal approval complete if other party accepts all revisions Revisions not accepted or changed - resubmit
15 Legal Approval (conknued) Ø Approval subject to a ssump5on of business risk Par5es cannot agree on Legal s revisions Business need overrides Clearly define the risk Require wrinen acknowledgement and acceptance of legal risk from client Ø Legal approval as to legal form ONLY. No approval of business terms.
16 Business Approval Company policies on approval of business and financial terms Company policies on signing authority
17 Approval Policy In wri5ng Made available and accessible Educa5on intra- company Management buy- in Discipline for viola5ons
18 ACC Resources Sample Form & Policy (2012): Contract AdministraKon Policy hnp:// Sample Form & Policy (2012): General Contract Review Policy Summary hnp:// Sample Form & Policy (2011): Contract Approval and Signing Authority Policy hnp:// Sample Form & Policy (2010): Contract Processing and Management Policy for Non- Procurement Contracts hnp://
19 ACC Resources Sample Form & Policy (2007): Contract Review Sign Off Sheet hnp:// Sample Form & Policy (2007): Contract Review Process hnp:// Sample Form & Policy (2006): Customer Contract Review Policy and Procedure, by Brad Weller hnp:// Sample Form & Policy (2005): Contract Review and Signature Policy hnp://
20 Key CLM Technology ConsideraKons
21 Most Widely Installed CLM System Requests & Collaboration Document Management Tracking & Reporting
22 Works to a point Outlook is not a great place to collaborate or keep track of transac5on history Word documents stored locally or on shared drives is risky Excel as repor5ng mechanism is unreliable Taken together this approach does not remotely resemble a best prac5ce
23 The other extreme Enterprise CLM Systems automate the crea5on, execu5on and renego5a5on of contracts and amendments and provide performance monitoring and analysis. For the typical organiza5on this kind of system is overkill.
24 5 primary considera5ons: 1. Contract crea1on ability to support collabora5ve contract nego5a5on, contract templates and clause libraries, approvals, workflows, [electronic signature,] and audit controls. 2. Contract repository ability to establish a searchable repository of all contracts, clauses, and associated business informa5on. 3. Contract management ability to automate and control contract administra5ve processes, including compliance management, amendments, and renewals. 4. Repor1ng and analy1cs ability to monitor and report on contract and opera5onal performance as well as support risk and scenario- based assessments. 5. Integra1on and services ability to integrate and interoperate with business applica5ons, especially ERP and Microsov Word, and to provide support services.
25 The Danger Zone This has created an oddly perverse dynamic where the vendors with the most feature- rich solu5ons win the contracts, but the users lose due to the complexity of the technology.
26 The Danger Zone Customers are realizing that there are bener, more strategic uses of their 5me than training employees, figh5ng low adop5on, and contending with angry users they want technology that just works. Aaron Levie CEO box.net
27 What s Really Important Anyone can easily request a contract review No5fica5ons and rou5ng are automated Centralized collabora5on capability Defined and ad- hoc workflow and approvals Transac5onal, self- service desktop repor5ng Transparency to all par5cipants No training required
28 ACC Resources Quick Counsel (2013): Document Management, Contract Management, Records Management, and Knowledge Management Systems: What Are they, What Do they Do, and What are the Differences? By Danish N. BuN hnp:// ACC Docket (2013): ImplementaKon and Use of Electronic Contracts, by Connie Brenton and Jason Epstein hnp:// Wisdom of the Crowd (2012): Contract Management Systems hnp:// Leading Prac5ce Profile (2011): Law Department Leading PracKces in Contract Management: Finding an IT SoluKon hnp:// Leading Prac5ce Profile (2006): Contract Management for Small Law Departments hnp://
29 How can a legal department become a beber facilitator in the contrackng process?
30 Facilita5ng the contrac5ng process Some challenges Who owns the contract? What if the other side does not agree terms? Examples of best prac5ces WriNen policies Tools such as playbooks Lifecycle management
31 Who is responsible for contracts? Keys to success: Training Clear guidelines or policies Tools Rela5onships - get involved when needed Demonstra5ng Value to the Business Metrics and Measurements such as: Number of contracts reviewed or signed Turnaround 5me
32 Takeaways and Tips Understand the business risks Rela5onships are key - be empathe5c and collabora5ve Deliver consistent legal message (and repeat as many 5mes as needed) Consider self- service tools
33 ACC Resources Program Material (2014): Redesigning Contract Lifecycle Management in an Era of Lean Law Departments hnp:// Top Ten (2013): Top Ten Steps for EffecKve Contract Management, by Alan GuNerman hnp:// Top Ten (2010): Top Ten InnovaKons to Improve Enterprise- Wide Contract Management, by Nancy Jessen and Bret Baccus hnp:// management.cfm
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