Our in-house Compliance Department has 7 people, but no attorneys and only 2 that deal directly with contract documents on a regular basis. These are the guidelines we setup to help determine what contracts needed to be reviewed by outside legal counsel, though the guidelines are not cast in stone, and exceptions can be made if appropriate.
Contracts that DO require attorney review include:* Contracts with an annual cost of more than $50,000 (especially if it's a multi-year contract).
* Contracts between 3 or more parties.
* Contracts with liability or indemnification requirements, or with specific insurance requirements.
* Amendments that alter previously approved liability or indemnification clauses.
* Initial drafts of a template contract that will be used with multiple contract partners, or significant changes to a previously-approved template.
* New contracts with an entity that will be a critical subcontractor (with critical subcontractor meaning we either could not function without them, or they would be very difficult to replace or could not be quickly replaced).
* Contracts that involve intellectual property rights.
Most other contracts and amendments can be reviewed just by internal contract specialists in the Compliance Department. If the contract specialists have trouble negotiating needed changes with the other party, or for other reasons think attorney involvement is necessary can choose to involve outside counsel (we have one attorney with whom we have a long-term contract, who is a member of the Board of Directors and has worked for our firm for over 20 years, and an associate in the same firm who has worked with us for about 5 years).
Contracts that are generally OK for just internal review by contract specialists include:* Contracts with an annual cost of less than $50,000.
* Amendments to existing contracts that do not impact liability or indemnification.
* Contracts that use pre-approved templates with no changes or only minor changes.
* Renewals of contracts that were reviewed by the attorney with only minor changes (dates, price).
* General facility maintenance contracts - mowing, snow removal, etc.
* Facility rentals for meetings unless those include liability or indemnification language, or that require proof of insurance.
* Routine office equipment purchases (chairs, desks, monitors, phones, computers, etc.).
* For radio / TV / online advertising.
* Early termination notices or notices of intent to not renew an existing contract.
If in doubt, the contract specialists can review with each other, or with the head of the Compliance Department. Hopefully this is somewhat helpful info.
- Ivan
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Ivan A. Martin
Senior Contract Administrator
Iowa Student Loan
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Original Message:
Sent: 04-07-2021 04:17 PM
From: Anonymous Member
Subject: Outsourcing contract review
This message was posted by a user wishing to remain anonymous
We are a small organization without an in-house Legal department. If we had one we'd ask them to review all vendor contracts for us. In the absence of an in-house Legal department, how do folks determine which contracts vendor management should review and which outside legal counsel should review?