By Jann Moorhead

Sometimes you need to hire counsel outside of your company to manage your commercial contracts. Whether you need them because you don’t have in house legal at your company or because in-house counsel are too busy with other projects, outside counsel can save you money and time and even ensure you don’t run into costly litigation down the road.

Below are common pitfalls and oversights companies can avoid when hiring contract management attorneys.

1. Ask if your hired counsel need any other information to properly review the contract.

Make sure they understand what type of review you want your outside counsel to provide: high-level issues only or a thorough “scrub.” If your lawyer is doing a thorough scrub when you only wanted them to check for high-level issues, this may lead to more time (and more money spent) unnecessarily.

Also, if there is any background information or prior history with the company on the other side of the deal, it is very important to share this with your counsel. Make sure to open communication channels to ensure they have everything they need to properly review the contract – they may have questions, need backup documents, etc.

Make sure outside counsel understand what type of contract review you want want: high-level issues only or a thorough “scrub.”

2. Tell them whether you want the high-level review or thorough scrub.

Getting this guidance is vital. It lets counsel know how long we should spend reviewing your contract. For example, a company may have a non-disclosure agreement they’d like reviewed for high-level issues only, and they just want to get it done.

Conversely, they may ask me to do a thorough review and cleanup for a high-value contract. Although a comprehensive scrub takes more time, I don’t want clients who need this to feel like anything has been overlooked. I never want to miss anything that could turn into a major issue down the road.

3. Are there any prior agreements?

For example, I was asked to review and negotiate a contract for a client engaging an IT training and services company. The agreement was lengthy and poorly drafted, and I was anticipating a lengthy review and process of negotiation.

I asked the client whether they had any history with this company, and it turned out when they checked their files that there was a prior negotiated agreement (on a different form). I used that as a starting point for the new contract, and it saved me time and the client a fair amount on their bill. 

Share any prior history with the company on the other side of the deal with your outside counsel.

4. Do you have any concerns about this contract based on past experiences?

For example, a previous client had big concerns about data privacy. A central part of their business was collecting personal information, and a company they contracted to work with used the personal data for their own benefit. This was not in compliance with the non-disclosure/ non-use agreement.

This data was not only sensitive information but had commercial value, and the contracted company was using it for free. When they asked me to draw up a new contract with a company providing similar services, I ensured that all the bases were covered to address the client’s concerns, especially protecting their data.

5. Who else needs to review?

Will this contract only go back and forth between counsel and the contractor? Or do sales and business managers need to review?

For clients that don’t have in-house attorneys, I’ll often get more involved with other branches of the business, such as the sales or marketing departments, to ensure the contract aligns with their goals and business terms.

For clients that don’t have in-house attorneys, I’ll often get involved with other branches of the business to ensure alignment.

6. Are the deal terms negotiated, or can counsel make suggestions?

For example, I’m an expert in tech and consumer products licensing agreements. A previous client was presented with a proposed license agreement from a licensee. The deal terms were highly favorable to the licensee and not my client.

The deal terms had already been negotiated on the front side (which is often the case when a contract gets to me), but I was able to persuade the client it was worth pushing back on some of the terms. At the end of the process, I was able to get the client a better deal than the one that they had negotiated, which of course makes the legal fees seem even more worth it to the client!

Request a free proposal from Jann.

About the author

Jann Moorehead

Jann Moorehead

Jann Moorhead is a global transactional attorney with more than 25 years of experience representing both multinational established businesses and startups. She was the lead attorney for the Star Wars franchise and its licensing activities and has negotiated numerous license, distribution and other commercial contracts for clients from a wide range of industries. Jann began her legal career in the corporate and media departments of national law firm Loeb & Loeb.

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