If you are an attorney working with start-ups or early stage companies, enhance the value of your legal services with these five tips from a lawyer/executive with over 25 years of experience. Includes useful sample forms.
Interaction Between In House And Outside Counsel Moceyunas Jan 2010
1. Interaction Between In-house and Outside Counsel:
Adding Value to the Attorney-Client Relationship
By Ann K. Moceyunas
Atlanta, Georgia
Presented to ICLE in Georgia
Start-ups & Early Stage Companies
January 28, 2010
2. TABLE OF CONTENTS
1.
Introduction................................................................................................................ 1
2.
Define the Role of Outside Counsel.......................................................................... 2
2.1.
Tip – Define the Outside Counsel’s role at the outset and re-examine over time. 3
2.2.
Tip – Define the line of communications. ............................................................ 4
2.3.
Tip – Know Your Limits. ..................................................................................... 5
2.4.
Tip – Be available as the “Temp”......................................................................... 6
3.
Think Like the Client. ............................................................................................... 6
3.1.
Tip – Agree on rules for setting priorities............................................................. 6
3.2.
Tip – Learn the Client’s business. ........................................................................ 7
3.3.
Tip – Align your Services to Business Metrics. ................................................... 7
3.4.
Tip – Respect the Client’s Business Rhythms. ..................................................... 8
3.5.
Tip – Care for invoices as much as your other legal work. .................................. 8
4.
Think Like a Lawyer. ................................................................................................ 9
4.1.
Tip - Ask Questions and Respect Teachable Moments. ....................................... 9
4.2.
Tip – Ask about the other side’s lawyer. .............................................................. 9
4.3.
Tip – Establish your role in negotiations. ........................................................... 10
5.
Provide Process and Structure. .............................................................................. 10
5.1.
Tip – Improve Quality by Establishing Standards.............................................. 11
5.2.
Tip – Improve Delivery of Legal Services by Establishing Process. ................. 12
5.3.
Tip – Incorporate education and training into the Process. ................................ 12
Sample 1 - Contract Standards....................................................................................... 14
Sample 2 - Delegation of Authority................................................................................. 15
Sample 3 - Sales Contract Request.................................................................................. 17
Sample 4 - Contracting SOP............................................................................................ 19
Sample 5 - TopSheet ........................................................................................................ 20
Sample 6 – Training Materials........................................................................................ 23
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4. structure and process to the delivery of legal services. Outside counsel that is pro-active
on these two goals will immediately increase the confidence of the client that the legal
services are worth what the client is paying.
2. Define the Role of Outside Counsel.
A few years ago, I stumbled through an awkward meeting with outside counsel
and the new chief financial officer of a company for which I had just been appointed
general counsel. The outside counsel had worked with the CFO in another company and
the relationship was good, but the outside counsel asked which of us would be the
primary contact for the firm. I was taken off-guard. We worked through it and I, as
general counsel, took on the role as the legal manager. The incident highlighted to me
that roles should be discussed at the outset and not assumed. For example, in some start-
ups, the in-house lawyer is the “general counsel” with responsibility for managing all the
legal functions. However, in others, the in-house attorney is not the general counsel, but
handles only some legal matters (contracts) while outside counsel handles others (board
matters) and the CFO or CEO manages the outside counsel. You can add value to the
relationship by understanding those dynamics, over time.
The role of outside counsel is defined by the role of the person inside the start-up
engaging the outside counsel. If that person is the in-house lawyer, the relationship is
usually: a) to provide legal expertise in areas outside that of the in-house lawyer; b) to
provide extra hands to handle workload that the in-house lawyer cannot; and c) to provide
legal counsel when the in-house lawyer has an actual or potential conflict of interest. If
2
5. that person is not a lawyer, the relationship may impose a greater duty of legal counsel2
and a different opportunity to add value to legal services.
2.1. Tip – Define the Outside Counsel’s role at the outset and re-examine
over time.
The engagement for legal services should be in writing and describe the initial
scope of services and a process for engagement for new matters as well as pricing and the
identification of the lawyers working on the matter.3 You and the start-up client need to
have a clear understanding of what you, the lawyer, will and will not do. If your law firm
is the “general counsel”, you may be taking on ethical obligations that require you to ask
a lot more questions and be pro-active about the start-up’s legal compliance. At least
once a year, the lawyer should talk with the start-up client about what expectations the
client has for the law firm relationship and whether the relationship moves toward more
pro-active attention.
Special Note – If your Primary Legal Contact (see below) is not a lawyer, take
greater care to recognize the potential for a conflict of interest, particularly where your
regular contact is the CEO. For example, when an issue arises with the Board of
2
See, e.g. Barnes v. Turner, 278 Ga. 788, 606 S.E.2d 849 (2004). An attorney’s
failure to advise a corporate client about a UCC filing deadline five years after the sale of
a business imposed an obligation upon the lawyer to renew the security interest himself.
3
See, e.g., Schluter v. Perrie, Buker, Stagg & Jones, P.C., 230 Ga.App. 776, 498
S.E.2d 543 (1998). The court denied recovery of hourly charges by an associate where
the engagement letter, while on firm letterhead, referred in the body of the letter only to
one of the partners of the firm.
3
6. Directors or an investor, the CEO may look to you for advice on issues that affect him or
her individually.4
2.2. Tip – Define the line of communications.
You have probably been here: as soon as the firm’s engagement letter is signed,
you start getting emails from people in different departments of the start-up, each asking
for work on a new matter. The start-up’s accounting department is surprised (and not in a
good way) by your first invoice. The CFO is upset for a few reasons: (i) he or she did not
know what you were working on (even though the work needed to be done); (ii) the work
should not have been done (for example, a deal that has no chance of going through, but
the sales person needed to show “progress”); or (iii) the work was an unnecessary
4
“In dealing with an organization's directors, officers, employees, members,
shareholders or other constituents, a lawyer shall explain the identity of the client when it
is apparent that the organization's interests are adverse to those of the constituents with
whom the lawyer is dealing.” Georgia Rules of Professional Conduct, Rule 1.3 (d). See
also, Zielinski v. Clorox Co., 270 Ga. 38, 504 S.E.2d 683, 1998, in which the court held
that there was no attorney-client privilege between corporate officer and corporation’s
attorney: “[T]he corporate attorney-client privilege belongs to the corporation, not to an
officer or employee of the corporation, and an officer or employee therefore has no
power to assert the corporation's privilege or to prohibit the corporation from waiving it.”
The court adopted the federal courts’ standard: Under the test, corporate employees may
assert a personal privilege with respect to conversations with corporate counsel if the
employees satisfy the following conditions:
First, they must show they approached [counsel] for the purpose of seeking legal
advice. Second, they must demonstrate that when they approached [counsel] they
made it clear that they were seeking legal advice in their individual rather than in
their representative capacities. Third, they must demonstrate that the [counsel]
saw fit to communicate with them in their individual capacities, knowing that a
possible conflict could arise. Fourth, they must prove that their conversations with
[counsel] were confidential. And, fifth, they must show that the substance of their
conversations with [counsel] did not concern matters within the company or the
general affairs of the company [citation omitted]. Idem at 41.
4
7. duplicate (for example, they already had a form that would have been perfectly suitable
for the deal).
The value-add is to help the start-up client manage the legal work. Designate one
person in the start-up to be the Primary Legal Contact – that person receives regular
updates on the list of matters being handled and status code. Define the scope of matters
that individuals in the start-up can send to outside counsel without going through the
Primary Legal Contact (for example, NDA’s). Matters outside the pre-approved list must
be sent back to the Primary Legal Contact to approve and assign.
2.3. Tip – Know Your Limits.
Nobody knows it all, including you.5 Start-ups may need a variety of legal
expertise. If you do not have that expertise, you can still add value to your legal services
by being the resource for finding the expert. For clients with no in-house lawyer, the
outside general counsel can serve the role of administering legal budgets for projects,
reviewing invoices against budgets, and reporting. For clients with in-house counsel, you
can be the trusted source of referrals. Keep your referral network up-to-date and make
the first call to the other counsel to “pre-screen” availability and suitability.
5
“A lawyer shall provide competent representation to a client. Competent
representation as used in this Rule means that a lawyer shall not handle a matter which
the lawyer knows or should know to be beyond the lawyer's level of competence without
associating another lawyer who the original lawyer reasonably believes to be competent
to handle the matter in question. Competence requires the legal knowledge, skill,
thoroughness and preparation reasonably necessary for the representation.” Georgia
Rules of Professional Conduct, Rule 1.1.
5
8. 2.4. Tip – Be available as the “Temp”.
If a start-up has an in-house lawyer, that person is just counting the days until his
or her 12-hour workdays will be relieved for a well-earned vacation. You can provide an
important service to the in-house lawyer by knowing enough about the business and
processes to fill-in as the “temp”, with some preparation. Have a list of all on-going legal
matters, the name of the internal client, status, and how to have access to pertinent
documents. And, be especially polite to the admins – they will be your best friends.
3. Think Like the Client.
As general counsel, I spent my first few weeks doing more observing than actual
legal work. I “y’d in” to customer service calls (the “Y” refers to the shape of the
telephone wires when an additional headset is added to the phone line). I learned to use
the company’s software application. I even acted as a “secret shopper” (with the
knowledge of the President) before I officially started so I could go through the sales
experience from the customer’s perspective. Outside counsel can add value to legal
services by understanding the client’s business and how legal services support the
company’s goals. That understanding should extend to not only the substance of the
work (for example, understanding the start-up’s operations and the intellectual property
issues inherent in the start-up’s products), but the form of the work (for example,
understanding that start-up executives have little patience for more than a one-page
summary of issues).
3.1. Tip – Agree on rules for setting priorities.
Every start-up cares about saving money. They also care about making money.
Their impression is that lawyers do neither. You can coach your start-up client on
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9. managing risks and how that relates to saving/making by talking through the five
priorities that all start-ups have:
1. Protect life and limb.
2. Stay out of jail.
3. Generate profitable revenue.
4. Enhance the value of assets.
5. Prepare for the exit.
Legal expenses, how much, when to take on, can be prioritized based on these five
priorities.
3.2. Tip – Learn the Client’s business.
Read all the sales and marketing materials; have a sales person give you a full
sales presentation; interview the operations team about how the services or products are
delivered; sit (or walk) with an operations person through the call-center or the
warehouse or wherever the work is done; observe client training; talk with accounting to
learn how the billing and collection process works; interview the other departments with
whom you will be working to understand their internal processes; get an “org” chart with
emails and phone numbers. And get the client’s commitment to “invest” in you by
making people available, in exchange for your “investing” in the client by waiving your
hourly fee for these activities.
3.3. Tip – Align your Services to Business Metrics.
Your in-house legal contact (lawyer or executive) has business objectives that are
impacted by your legal services, for example: a) legal fees and expenses; b) number of
deals done; c) money saved in dispute resolution; d) enhancing the value of intellectual
property assets. One of your most important value-adds is making it easy for your legal
contact to appreciate your impact by reporting on metrics that support the business
7
10. objectives. While you need to discuss with your Primary Legal Contact which metrics are
best and cost-effective to produce, there are some fairly standard reports that will help
them: (a) set up your billing entries to reflect the way the client manages legal expenses
(for example, by project, by department, by budget) and run reports that summarize and
compare actual to budget; and (b) track when legal projects come in and how may
days/months before they are finished.
3.4. Tip – Respect the Client’s Business Rhythms.
Being pro-active about legal services means understanding the client’s cycles
within its business. For example, many start-ups pay their commissioned sales
representatives on a quarterly basis, making the end of the quarter very busy as deals get
pushed to close. You can add value to your legal services by providing reports that
support those cycles. For example, your legal project status report may be needed only
monthly during month 1 of the quarter, but every week or even daily at the end of the
quarter.
3.5. Tip – Care for invoices as much as your other legal work.
Law firm invoices can be the bane of the in-house lawyer’s existence, the reason
for baldness, migraines, and hives. But they do not have to be that way. I beg, I plead, no
I implore you:
1. Send invoices within 10 days of the close of the month;
2. Write meaningful billing descriptions;
3. Track, sort and subtotal by client-meaningful categories (for example,
phase, project, deal).
8
11. 4. Proof for mistakes, especially including another client’s charges on
my invoice.
5. Did I mention, send them by the 10th of the month.
4. Think Like a Lawyer.
Executives at start-ups have all worked with lawyers, some good and some not so
good. If you have not worked with the client before, do not assume they understand your
ethical obligations.
4.1. Tip - Ask Questions and Respect Teachable Moments.
The client sends you a contract with an email that simply says “for your review”.
If this is not a deal with which you are already familiar, your automatic response should
typically be, “let’s schedule time to discuss so I can understand what you think the deal
is”. You may be surprised to learn that the form the client sent to you has nothing to do
with the contract they need. Depending on the client and whether the question is likely to
arise in similar deals, explain to the client why you are asking the question. These are
“teachable moments” that can empower your client. You might learn something you did
not think to ask.
4.2. Tip – Ask about the other side’s lawyer.
Clients do not know or forget that you have an ethical obligation to refrain from
participating in negotiations or discussions with other parties that are represented by
counsel.6 You can avoid wasting a conference call by explaining this to your client and
6
“A lawyer who is representing a client in a matter shall not communicate about
the subject of the representation with a person the lawyer knows to be represented by
another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is
9
12. telling them that you will have to leave a call or meeting if the other side has counsel who
is not present.
4.3. Tip – Establish your role in negotiations.
Discuss with your client what role you, the lawyer, will play in contract
negotiations. You should suggest ways to make your involvement more efficient. For
routine contracts (for example customer contracts), the businessperson is usually the
better person to manage the contract negotiations, communications, and drafts. However,
the businessperson can appreciate that the lawyer can be the “bad guy”, called in for
phone or meeting negotiations only when there is a complete impasse. On the other hand,
with significant deals with many documents or third-party approvals (for example
acquisition), the lawyer is probably the better person to play an active role in managing
the communications, drafts, and negotiations once the main deal points are struck. When
that happens, the lawyer moves from “lawyer” to “lawyer and project manager”. You
can increase your value-add by using online project management tools (that fit the size of
the project).
5. Provide Process and Structure.
Let’s go back to the healthcare analogy. I went to an orthopedist a few years ago
for diagnosis and treatment of a “frozen shoulder”. Sure the MRI kind of creeped me out,
authorized to do so by constitutional law or statute.” Georgia Rules of Professional
Conduct, Rule 4.1 (a). “In dealing on behalf of a client with a person who is not
represented by counsel, a lawyer shall not: (a) state or imply that the lawyer is
disinterested; when the lawyer knows or reasonably should know that the unrepresented
person misunderstands the lawyer's role in the matter, the lawyer shall make reasonable
efforts to correct the misunderstanding; (b) give advice other than the advice to secure
counsel…” Georgia Rules of Professional Conduct, Rule 4.3.
10
13. but I was happy to learn there was nothing seriously wrong that required surgery. But my
frozen shoulder was not helped by the MRI. I started physical therapy and was amazed
that 3 months later I had full range of motion in the shoulder, but it resulted from the
physical therapist working with me at weekly sessions, training me to use hand weights,
and measuring my progress.
Outside legal counsel can provide value-added services, particularly in the area of
contract management, by not only providing legal expertise (the “diagnosis”), but also
demonstrating, teaching, and measuring progress on internal contract processes. Clients
respond well to statements such as “I can save you money” by working with you on
building and improving contract processes.
5.1. Tip – Improve Quality by Establishing Standards.
For many start-ups, getting the “form” customer agreement is a one-time event.
And for some businesses, that may be sufficient for a few years. However, most start-ups
will have to negotiate their contract forms or forms provided by the other side. You can
add value to drafting a form by providing working with the Primary Legal Contact to
establish contract parameters, for example:
1. Contract Standards – a matrix of acceptable legal terms with
alternatives, annotated, and with a decision-tree for deviations (see,
Sample 1, attached).
2. Contract Templates - drafted to be “self-serve” by business people; or
drafted to be customized for each deal; may or may not have alternative
suggested language, depending on who is authorized to use.
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14. 5.2. Tip – Improve Delivery of Legal Services by Establishing Process.
Start-ups usually approach legal projects as “one-off’s”: just get it done as quickly
as possible for as little as possible. That approach works the first time, but just creates
more work and more legal expenses for those projects that are repeated (such as
negotiating customer contracts). You can improve the delivery of your legal services by
helping the client establish contracting processes early in the start-up life. For example,
start-up that will negotiate many contracts (for example, sales, marketing, business
development), would benefit from some simple standard operating procedures (“SOP”):
1. Contract SOP – describes types of contracts, who has authority to request legal
services, and describes legal services support (with turn-around goals) (see
Sample 2).
2. Contract Request Form and SOP - (especially good for sales) checklist of
typical business terms; aligns with templates; the process clearly states who can
initiate legal work (see, Sample 3).
3. Delegation of Contract Authority – states which positions in the start-up have
authority to bind the company, usually stated in dollar limits and types of deals
(see, Sample 4).
4. Deal Cover Sheet – used to present a final contract to the signing executive; calls
out contract deviations and explains reason for use by person signing or
authorizing (“Audit; don’t review”) (see, Sample 5).
5.3. Tip – Incorporate education and training into the Process.
Go beyond providing the template. Provide the client with creative educational
and training opportunities. For example, draft explanations in laymen’s terms about
12
15. points of law that a particular department is likely to encounter in every-day tasks in FAQ
(“frequently asked questions”) pages for the company’s intranet. Get thirty minutes
(better yet, sixty) with the sales team to play “The Contract Challenge” game (see,
Sample 7). Hold twenty minute web-facilitated conference calls with presentations (for
example, using “WebEx”) on a quarterly basis to go over a new contract term or the
preferred legal response to a particularly troublesome customer complaint. The key is to
(i) make it focused, (ii) make it short, and (iii) make it engaging (fun helps too).
13
16. Sample 1 - Contract Standards
CONTRACT PROVISION ALTERNATIVE 1 ALTERNATIVE 2 ESCA-
LATE TO
AMENDMENTS. All amendments None. None.
must be in writing and signed by
both parties.
ARBITRATION. Do not agree to [if required] must have ability None. G.C.
language committing to arbitration. to seek injunctive relief
outside ADR.
ASSIGNMENT BY COMPANY. Permit assignment by None.
Permit assignment by Company Company only in the event of
without consent of the other party. a merger or similar
transaction without the
consent of the other party.
ASSIGNMENT BY OTHER PARTY. Permit assignment by the Permit assignment by
No assignment by other party. other party with Company’s other party only in the
prior written consent. event of a merger or
similar transaction as
long as assignee is not
a competitor of
Company.
CHOICE OF LAW. Georgia Delaware New York G.C.
CONFIDENTIAL INFO. The duty to Length of time for protection N/A
protect confidential information must of confidential business
extend at least 3 years from the information must be
termination or expiration date of the reasonably related to the
agreement; obligation with respect type of information and its
to trade secrets subject to trade value to the disclosing party.
secret law (see below); obligation
with respect to personally
identifiable customer data subject to
privacy policy (see below). FAILURE
SHALL BE A MATERIAL BREACH.
HUMAN RIGHTS. In manufacturing N/A N/A Sr VP Ops
contracts ONLY, require foreign
seller to provide Company with its
program for compliance with human
rights standards of best practice in
its industry and shall maintain same
to Company’s satisfaction.
INVOICES. Invoices must be Payable net 30 days. N/A Controller
detailed, may require supporting
documentation (eg expenses), list
taxes as separate line item, in US$,
and mailed to specific Company
address, payable net 45 days.
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17. Sample 2 - Delegation of Authority
Accounting Process A-32
Delegation of Authority
Last updated: June 9, 2008 (akm)
Summary: This Delegation of Authority sets out the different levels of authority that internal
COMPANY team members have for purchases and other contracts on behalf of COMPANY and
the contract process for approval of contracts.
Background: Contracts and purchases of goods or services on behalf of COMPANY can
commit COMPANY to many different types of obligations, not just financial obligations.
Furthermore, contracts can be made orally as well as by informal writings (such as email). To limit
the risk to COMPANY of undertaking unnecessary or overly risky obligations and for certain tax
reasons, we need a careful review of all contracts and purchases, according to this policy.
Delegation of Authority, Generally:
1. CEO has authority to sign checks for all transactions, approve and sign contracts, initiate
credit card charges and payments, and banking for all transactions; and any other actions
necessary for operations and compliance.
2. CFO & General Counsel and above have authority to:
a. Approve payroll, tax, and related expenses, based on annual budget (including
delegating initiation of payment to accounting department staff).
b. Sign checks for all transactions, subject to annual budget, client-approved budgets,
and CEO direction.
c. Approve and sign applications, tax returns, filings, responses, and other necessary
documentation related to legal compliance and insurance matters.
3. Senior Vice President & General Manager and above have authority to:
a. Approve and sign contracts related to client promotions (after review of written
contract terms by either CEO or legal counsel);
b. Approve and sign contracts related to day-to-day operations, within annual budget
(after review of any written contract terms by either CEO or legal counsel).
c. Initiate purchases by credit card, that do not require written contract, for promotional
expenses pursuant to a client-approved budget, of no more than $50,000 in a month
(must check with Dan as to which credit card to use for purchase over $10,000 or for
airfare/hotel purchases).
4. Vice President and above have authority to:
a. Approve and sign contracts for Radio Promotion Letters of Agreements based on
forms approved by CEO or legal counsel (and with client’s approval of deal with radio
station).
b. Initiate purchases by credit card, that do not require written contract, for promotional
expenses pursuant to a client-approved budget, of no more than $25,000 in a month
(must check with CFO as to which credit card to use for purchase over $10,000 or for
airfare/hotel purchases).
c. Initiate purchases by credit card or otherwise, that do not require written contract, for
expenses related to Sales & Marketing, pursuant to a travel-budget approved by
CEO.
5. Director and above have authority to:
a. Initiate purchases by credit card, that do not require written contract, for promotional
expenses pursuant to a client-approved budget, of less than $10,000 per month
(must check with CFO as to which credit card to use for airfare/hotel purchases).
15
18. b. Approve purchases by credit card, that do not require written contract, for day-to-day
business expenses, such as office supplies, pursuant to annual budget, of no more
than $1,000 per month.
6. Coordinator and above have authority to:
a. Initiate purchases by credit card, that do not require written contract, for day-to-day
business expenses, such as office supplies, pursuant to the annual budget, of no
more than $100 per month; however, you are requested to coordinate office supply
purchases with Office Manager.
b. Initiate purchases by credit card, that do not require written contract, for day-to-day
business expenses, such as office supplies, that have been approved in writing
(email ok) by Director or above.
c. Initiate purchases by credit card for client project expenses, with a prior email
approval by a Director or above.
Specific Types of Contracts. There are many types of contracts that arise in the course of our
work at COMPANY This list below addresses only some of the types. If you have any question
about whether you have authority to make or approve a purchase or whether a particular
transaction constitutes a “contract”, you should ask your direct supervisor.
1. Radio Promotions
a. Offer Letters and Proposals: Vice President or higher must approve the form of the
offer letter and attached Proposal and get approval of the Proposal from the CEO or
legal counsel before it is sent out to the potential participating radio stations. The
letter itself may bear the signature of the Manager who is coordinating the promotion,
so long as the VP (or higher) and CEO or legal counsel have approved. The
Proposal is not intended to be a binding contract until BOTH the radio station and
COMPANY sign. If the radio station returns the Proposal signed with no changes,
then a Director (or higher) may sign to accept the Proposal (after getting client’s
verbal or written approval).
b. Proposals with Changes made by Radio Station: if the radio station proposes
changes only to the business terms in the Proposal that COMPANY sent (for
example, number of days of the promotion or spots), then the Director (or higher) can
approve and accept/sign the Proposal as changed (after getting client’s verbal or
written approval). However, if the “boilerplate” or other terms of the Proposal are
changed or the radio station sends its own form, it must be approved by the CEO or
legal counsel before the COMPANY Director (or higher) can sign the counter-
proposal or new form.
2. Client Engagements. See Contracting Process SOP for special instructions.
3. Client Invoices. CFO must approve all client invoices.
4. Engagement of Persons.
a. Independent Contractors – CFO must approve and sign written contract before
work can commence. This is important for several reasons, which may include: tax
consequences, ownership of intellectual property, and protection of client or
COMPANY confidential information.
b. Employees –
1. CFO must approve all offer letters.
2. Senior VP & General Manager may sign offer letters for operations positions.
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19. Sample 3 - Sales Contract Request
How to Use this Form.
1. Client Executive uses this form to request a Client Master Agreement. Fill in the spaces below
that are highlighted. Submit your Worksheet to Legal via Email. If you have questions, contact
[Name].
2. Legal will prepare a Master Agreement based on this Worksheet and contact you if there are
questions. Legal will forward the draft to Finance for initial review. Plan on this initial turn-around
taking 2 business days (we will work faster if we can).
3. All drafts that go to the Client must be reviewed and approved by Finance and Legal before
signature by your Executive.
4. Check Back on the Sales Department Wiki for the most current form.
Sales Executive requesting this contract:
Your Email:
Your Phone:
Date requested:
Your contract can usually be turned around in 2 business days; if the matter is urgent, please indicate
reason for urgency and time requested-by: .
CLIENT DATA
Client Name (full legal name):
Client Business Type (check one):
Corporation Partnership Sole Proprietorship LLC Other (describe):
State of incorporation (or formation):
Client Mailing Address (street / city/ state / Addressee and Address for legal notices:
zip): Addressee:
Street: Street:
Suite: Suite:
City: City:
State and Zip: State and Zip:
If notices go to additional addresses, write here:
Contract Signer:
Name of Person who will be signing contract for Client:
Title of Person who will be signing contract for Client:
DATES OF CONTRACT
Effective Date of Contract :
Upon date of last signature (default); or
date certain (write):
17
20. Term of Contract:
One Year from Effective Date with automatic renewal (default); or
specify (You must get Email Authorization from EVP to change):
LICENSED PRODUCTS
Module 3rd License Metric Number
Party
Perpetual Licensed Products
Company Software Desks
Oracle Standard Edition * Processors
Oracle Personal Edition * Named Users
Crystal Reports Runtime * Enterprise
Crystal Reports Professional * Named Users
Third Party Interfaces
Kronos Inbound Interface Enterprise
Charge Outbound Interface Enterprise
Subscription-based Licensed Products
Company Interface to Third Party DataBase * Connections
FEES AND PAYMENT
1. Software License Fees.
(%) Amount Due
50% $ Upon Execution of Agreement
25% $ Within ninety (90) days of Effective Date of Agreement.
25% $ Within one hundred eighty (180) days of Effective Date of
Agreement.
TOTAL: $
2. Subscription Terms – (if applicable):
Amount
Company Interface to Third Party DataBase $
License Fees less than List Price – explain: ________
Payment terms nonstandard – explain: ____________
SPECIAL TERMS – ATTACH EXPLANATION
Software Support Commitment – for more than 1 year, if so, how many years: _______
Special Implementation Terms (eg., more than 8 week implementation plan).
Special Training Services (in addition to 4 weeks training for 2 people).
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21. Sample 4 - Contracting SOP
Legal Process L-2
Contracting Process
Last updated: June 9, 2008 (akm)
Summary: This Contracting Process SOP sets out the contract process for approval of contracts.
Background: To limit the risk to COMPANY of undertaking unnecessary or overly risky
obligations and for certain tax reasons, we need a careful review of all contracts and purchases,
according to this policy.
Contracts Generally:
1. Legal Review – all contracts that must be reviewed by legal counsel. Exception – customer
orders using the Customer Order Form without any changes to the standard language of the
form; contracts approved by CEO.
2. Document in Electronic Format. If you receive a proposed written contract, let the other
side know that the contract will need to be reviewed internally at COMPANY before it can be
signed and that there may be changes. Please obtain the contract in Microsoft Word format
(for example “.doc”); if you cannot, scan it in (but it will take longer to get reviewed/change if
we do not have an electronic version).
3. Submit for Review. If you know you want to recommend changes to the contract, forward
two versions to the person who needs to approve/review it (see the Delegation of Authority
SOP):
a. The original version that the other side sent; and
b. A version with changes that you are proposing made with the “redlining” feature
turned “on” in Word (that makes it easy to track what you have changed).
4. Turn-around. If the contract has to go to legal counsel, please allow 5 business days for
turn-around. Be prepared to answer questions from CFO about the details of the transaction;
you may also need to help negotiate back-and-forth with the other party on particular terms. If
you don’t know what the changes mean that we have proposed, ask.
5. Getting Signature. Submit all contracts to CEO for signature, and include a Top Sheet with
required approvals.
6. Signed Contracts. All signed contracts have to be forwarded to CFO for the legal and
accounting files (as well as to comply with certain insurance requirements).
Client Contracts:
1. Master Services Agreements. CEO must approve and sign contracts with clients that
describe terms and conditions for on-going projects or single projects.
2. Statement of Work. CEO must approve and sign statement of work for client (which must
reference a master services agreement).
3. Acceptance of Client Order. We allow some clients to initiate fax / email broadcast projects
on their own using the COMPANY fax and email broadcast system. For other clients, the
client contacts COMPANY to initiate the broadcast.
a. For existing clients as of 5/1/08: A Master Services Agreement is not required. A job
where the fees are expected to be greater than $10,000 will require a master
services agreement and statement of work.
b. For new clients after 5/1/08: COMPANY must have a Master Services Agreement in
place before the initiation of the first job. A job where the fees are expected to be
greater than $8,000 will require a statement of work.
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22. Sample 5 - TopSheet
Purpose: for non-customer contracts, to summarize contract terms, identify non-standard terms,
and highlight terms that impact other contractual or operational obligations, for use by Executive
Team in connection with signing the contract and for use after as a summary of legal terms. See
Contract Summary – Finance for detailed analysis of financial impact.
Prepared by: Legal counsel.
Document Retention: retain with original or copy of actual contract.
Contracting Parties
Company US or Other Party 1: Other Party 2:
Company India Full Legal Name: Full Legal Name:
Address: Address:
Agreement Type
License for Software or Data
OEM or Distribution Agreement
Other [describe]:
Non-standard Terms for Special Consideration
Describe:
Term and Territory
Effective Date:
Initial Term:
Renewal:
Auto-renews. Details:
No auto renewal. Terminates on date certain:
Termination for Cause
• by Company – describe:
• by Other Party – describe:
Post-termination Provision:
Territory – describe:
Other Party Obligations
Describe:
Payment Terms
Summarize Payment Obligations:
Company pays:
Other Party pays:
Audit Rights. Describe:
Impact on Other Contracts or Operations
rd
Requires 3 party license terms to Customer Contract.
Requires changes or additions to other contracts – describe:
Privacy
Protected Healthcare Information
Contract requires other party to handle patient data.
Contract requires Company to handle patient data.
Customer Data
Contract allows Other Party access to Company Customer Data; if so, describe restrictions:
20
23. Contract allows Company access to Other Party Customer Data; if so, describe restrictions:
Intellectual Property Rights
Mutual Nondisclosure of trade Secret and confidential information. Note special terms:
Trademark License by Company. Describe:
Trademark License by Other Party. Describe:
Restriction on public announcements about contract or relationship without prior written
permission.
Software Escrow for Company Software – describe:
Software Escrow for Other Party software – describe:
Warranties and Disclaimers
By Other Party:
Corporate Authority – describe any limitations:
Other – describe:
By Company:
Corporate Authority – describe any limitations:
Other – describe:
Indemnification, Liability and Insurance
Indemnification by Company. Describe types of claims:
•
•
Indemnification by Other Party. Describe types of claims:
•
•
Process for Indemnification provided.
Limitation on indemnification for comparative negligence provided.
Limitation of Liability:
• no consequential damages, lost profits, special damages, punitive damages.
• Cap on damages payable by Company
• Cap on damages payable by Other Party
• Exclusions from cap:
o Breach of Confidentiality
o Indemnification
• Fees payable by Company
Abatement of obligations during event of Force Majeure.
Insurance Required – describe:
Other Legal Stuff
Assignment of contract limited – describe:
Process for sending Notices under Contract
Choice of Law – Georgia (preferred); or other (describe):
Alternative Dispute Resolution provided – describe:
Venue for legal disputes – describe:
Other documents not attached to contract are part of overall transaction- describe:
Integration Clause.
All amendments in writing.
No waiver, except in writing.
Severability if court invalidates a provision.
Legal Review
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