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6 Tips for Up-Leveling Your Legal Operations

As a Legal Engineer, I’ve been privileged to learn from Legal Operations professionals at legal teams of all different sizes and maturity stages. Some of those learnings are strategic (like how to achieve broad adoption), but others are quite tactical and simple. Below, I’ve compiled 6 of the easiest, most tactical tips you can implement today to up-level your team’s legal operations.

1. Think through your file names and folder conventions 

Well-constructed folder and file name conventions save a ton of time spent searching for executed agreements down the road.

There’s no ‘one right way’ to organize your contracts. It all depends on your business and organizational structure. But the key things to consider are (1) who is likely to need to access these documents in the future, and (2) how they're likely to access them. 

Here are some common examples you could copy or adapt for your team:

Organizing by agreement type, then counterparty name, then agreement status:

[Agreement Type] / [Counterparty Name] / Drafts / [Your file goes here][Agreement Type] / [Counterparty Name] / Signed / [Your file goes here]

Advantages:
  • Quickly see all agreements of a certain type.
  • Especially useful for Team Leads, such as the VP of Sales, who want one place where they can find all of contracts that are relevant to their department.
  • The beauty of this approach is that, using modern cloud storage solutions (see tip #5, below) you can grant permissions to teams for the folder containing only the agreement type that is relevant to them. For example, your Head of Sales may have access to the Sales Agreements folder, but not to the Employment Agreements folder.

Organizing by counterparty name, then agreement type, then agreement status:

[Counterparty Name] / [Agreement Type] / Drafts / [Your file goes here][Counterparty Name] / [Agreement Type] / Signed / [Your file goes here]

Advantages:
  • See all the contracts associated with a particular party. Especially useful if your business is based on a small number of deep partnerships, involving a variety of agreements.
Other things to consider:
  • If you run an international business, consider adding parent folders for each region (e.g., North America, EMEA, APAC etc.)
  • If you have multiple legal entities, you may find it helpful to add parent folders for each entity or to include the entity name as a new sub-folder in one of the structures listed above. E.g., [Agreement Type] / [Counterparty Name] / [YOUR COMPANY ENTITY] / Signed / [Your file goes here]

File Names: The exact format of your file names is not especially important. What is important is that it includes the critical identifying information, which will help you and other team members easily search for and find them later. The critical information is:

  • Agreement type
  • You company entity (even if you do not yet have multiple entities, include this now to prepare for a future where your company creates new entities. Your future self will thank you!)
  • Counterparty Name
  • Agreement Date

Here’s an example file name convention you could adopt:

[Agreement Type] between [Counterparty Name] and [Your Company Entity] ([Agreement Date]).pdf

E.g., NDA between Google Inc. and Acme, Inc. (12/12/2018)

2. Save time by setting Effective Dates as the date of last signature

A quick and easy way to save time for your business counterparts is to add language to your templates to state that the Effective Date will be the date of last signature. This way, those involved in contract negotiations will not need to track and update the effective date of the contract during the course of negotiations.

Here’s an example of a provision you can include in your templates to achieve this:

This Agreement is effective as of the date the last party signs.

3. Building on tip #2, use sequential signature functionality in e-signature tools to ensure your company representative is the last to sign.

Sequential signatures is common functionality among all modern e-signature tools. Setting your company signer to sign last gives you control over the effective date of the agreement if you followed tip #2, and ensures your company’s signers are not spending time signing agreements which then get negotiated prior to the counterparty’s signature.

Documentation on setting up sequential signers is available for all the modern e-signature tools and is supported by Ironclad. (Visit our Integrations page to learn more.)

3. Refer to prior contracts by their agreement date, rather than a unique contract number

Some contracts may refer back to prior contracts. Order Forms with an existing customer, for example, may need to refer back to a pre-existing Master Agreement or Order Form to incorporate and amend their terms.

In anticipation of this, it’s common for contract templates to include a field for entering a unique number which can be used to identify the contract in future. Instead of adding a field to capture a unique contract number, it’s easier for everyone involved to simply refer to prior agreements using their agreement date. It should look something like:

“This Agreement is governed by, and incorporated into, the [OTHER AGREEMENT NAME] effective as of [DATE].”

4. Put master agreements online and incorporate them by reference to a URL

Instead of requiring master agreement terms to be attached to new Order Forms and Statements of Work, upload them to an online location and refer to the URL in your Order Form and Statement of Work templates.

For example, you may upload your Master Agreement terms as a PDF in your cloud storage folder, with Read-only access to those it’s shared with. Then include language in your contracts such as:

This Agreement is governed by the terms of the Master Agreement available at [INSERT URL].

It’s amazing how something as simple as referring to terms stored online vs. in a Microsoft Word doc, can reduce the number of agreements that get negotiated (by establishing an expectation that the standard terms will not need to be modified), and simplifying the templates for your business people.

Of course, this is not appropriate for every business--especially for highly negotiated agreements, this may not make sense. But if fewer than 50% of agreements of a certain type are negotiated by your customers or partners, this may be worth an experiment.

5. Cloud Storage like Dropbox, Box, or GoogleDrive provides easy wins

Apart from the obvious benefits of easy doc sharing and automatic back-ups, modern cloud storage providers include lightweight version control and audit trails that will track interactions with or changes to the documents.

Because it’s easy to link to other documents within these platforms, you can also use these systems to create a central place for Legal team guides, policies and playbooks, which link directly to the latest versions of the templates. This is a quick and easy option for Legal Ops Managers in companies that do not already have a central, shared internal wiki for these kinds of resources.

6. Establish a contract approvals policy that keeps Legal out of low-risk, standard agreements.

Is it really necessary for Legal to prepare or review standard NDAs? Establishing policies for when Legal do and do not need to be looped in to review agreements is one of the best ways to reduce deal cycle times, and help Legal focus on the high-value/high-risk legal work that really matters.

To do this, you’ll want to have implemented many of the tips above, to ensure that preparing standard contracts based on the latest templates is as easy as possible for your business people. This will reduce the risk of errors filling out templates, or use of outdated agreements.

The best Legal approval policies strike a balance between risk management, and simplicity. After all, a fine-tuned policy is no use if it’s too complex for business people to apply correctly.

Some of the best policies I’ve seen empower business people to self-assess the risk of their contract based on clear criteria, and proactively escalate the contract to internal reviewers based on it’s risk category.  

Pro-tip: Be sure to share these policy documents in a central place, such as a Google Doc. This will make it easy to update and re-share as you review and update the policy from time to time. For example, you might establish 3 risk categories for Vendor Agreements: Low Risk, Medium Risk and High Risk and create policies for each:

  • Low Risk contracts do not require prior-approval.
  • Medium Risk contracts require Legal approval--but this may be limited to a quick, cursory overview. So the business person can expect faster turnaround times.
  • High Risk contracts require Legal approval--and business people should expect that the review and negotiation of these agreements may be a protracted process.

Factors typically include:

Vendor Type. Add to the below categories as necessary, and divide them into Low, Medium, and High risk categories depending on your team's risk tolerance: 

  • Software
  • IT Hardware
  • Marketing & Advertising
  • Consulting & Professional Services
  • Events
  • Real Estate
  • People & Payroll
  • Insurance
  • Travel
  • Office Management

Total Contract Value (e.g., $0-$10k, $10k-50k, $50k-200k, $200k+) 

Presence of certain high risk provisions, explained in clear English. For example:

  • Does the contract permit access to our confidential information? (for example, source code, financial data, pre-release product information, business plans etc.)
  • Does the contract permit access to personal information?
  • Does the Vendor have the right to terminate the contract at their convenience?
  • Is there a penalty fee for contract termination?

It will be tempting to list out every possible non-standard clause, but resist the urge! The goal here isn’t to eliminate risk entirely, but to reduce it to an acceptable level for your business. It’s critical to strike the right balance between risk management and ease of use.

Worried your business people may not understand terms like “Personal Information” or “Termination for Convenience”?

Creating short explainer documents and sharing them in a central place, such as a Google Doc (see tip #5) can be a great way to empower your business people to take greater responsibility, and establish your Legal team as a source of valuable support and expertise, rather than being seen as a blocker on business deals.


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Toby Willcocks is a Legal Engineer at Ironclad and a Harvard and Oxford-educated lawyer. Learn more about his work here! 

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