How far do you require depts be with negotiating commercial contract terms before your legal review? I’m talking routine low value and risk contracts (e.g., vendor services), where Legal terms won’t kill the deal. My clients blindly forward contracts. I say “are you sure this term is ok?” And often get “no.” They’re surprised because they never read them. Checking the temp to see what others experience, what might be normal. I feel contract training in my clients’ future...

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We try hard to get the business teams to review all redlines for commercial items before they submit them for legal review. Many times 75% of the terms are business terms that legal will not make a decision on either way, but it is hard to change the culture of sending everything straight to legal without review. I’m sure this changes depending on the size and maturity of the organization, but we have been trying to train the sales team to review first and some have gotten better.

We have also implemented some technological controls which prevent them from submitting contracts for legal review if they are under a certain value without executive approval. This is more to get them to push back on customers requesting material changes to legal or commercial terms for low value deals.

I wish out business teams would read agreements before sending to legal. Often a large part of my review is flagging issues.
And at times I ask them to review before sending to me.
IMO the business risk group should decide a term/$/risk assessment level that an agreement must hit before being sent to legal.

Agree with business deal terms to be reviewed by all business team members with appropriate sign offs. Most contracts have boiler plate language. But if there is something that restricts risk or shortage or inventory or state rule, these need to be reviewed by counsel. And client should provide a redline from initial to present so atty can quickly see deal terms. I prefer to provide a brief outline to atty in case they may be more aware of any issues that may have popped up that client would not necessarily be aware.

This is where a good procurement or contracts team can come in handy because they act as gatekeepers to filter out most issues that aren't truly legal issues. If you don't have that gatekeeper, a good training for the business teams might be helpful. Having the same person for each function submit in each instance also can help. We have a delegation matrix that requires earlier review by legal based on value/sensitivity/subject matter etc.

Have a purchasing/procurement intake form that must be filled out before Legal review. Then business must read and think about some of these issues before blindly lobbing over. That said, agree that you need to protect your time by having dollar value limits unless IP or indem are involved.

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