Contract Management

While there are numerous industries regulated by various agencies, this response is leaning on the Interagency Guidance on Third-Party Relationship: Risk Management. The Guidance states that an organization should involve experts across disciplines, including legal, throughout the lifecycle of the third-party relationship which includes contracting. What the Guidance doesn't state is exactly when legal counsel should be engaged but it does state that the benefits and risks associated with the third party should be understood, and those involving higher-risk activities, including critical activities should be known to the Board and may require legal review.

So . . . from this, it's a best practice to have legal review of your high risk and critical vendors' contracts when there are modifications or redlines to a standard template that has already been reviewed and approved by your legal counsel. When you are presented with a third party's contract to review, and it's a high risk or critical vendor, it's a best practice to engage legal counsel. In the end, your organization's risk appetite. as well as your Third Party Risk Management governance practices, should drive these decisions.