Presented By: André Brunel & David Reiter Managing Partners Phillips & Reiter, PLLC YOUR OUTSOURCED GENERAL COUNSEL EFFECTIVE CONTRACTS MANAGEMENT WITHOUT GETTING BURIED © Phillips & Reiter, PLLC 2016 All Rights Reserved

Firm Background – Your Outsourced AGC 2 Outsourced AGC for in-house attorney to help with overflow legal work We hire only partner level attorneys; no associates Attorneys often have significant senior in-house legal experience in addition to their law firm experience Run point for C-level management teams on legal issues with a very practical, business-focused, cost-effective perspective Focus on AGC overflow, corporate, technology, employment, compliance, and international work © Phillips & Reiter, PLLC 2016 All Rights Reserved

Common Pain Points 3 Lack of standardization on forms (e.g., employees default to using other parties’ forms, even on their own transactions) Lack of clarity on who is required to approve (e.g., sales approves sales agreement without finance review) Uncertainty on who is authorized to negotiate (e.g., most junior person negotiates most complicated and highest risk agreements) Inappropriate signing authority (e.g., anyone and their brother can sign) No central repository (e.g., agreements are partially signed, in draft form, exhibits and amendments missing, and kept in multiple places where no one can find them later) All of these point to lack of established process! © Phillips & Reiter, PLLC 2016 All Rights Reserved

Solutions: Develop Templates 4 Figure out the most commonly requested types of contracts the company uses and create clean, reasonably pro-company templates Develop standard fallback provisions Create instructions for filling out the template Depending on the number of people needed to be involved, consider creating a process summary for the template Post template and related documents to company Intranet Develop simple contract signing authorization matrix with different levels of signing authority based on type or dollar value of the contract © Phillips & Reiter, PLLC 2016 All Rights Reserved

Ubiquitous, routine contract example: the NDA 5 Template NDAs: one page mutual and one-way Needs to be reasonable; extremely pro-company tilt is self-defeating in this context Instructions to complete; standalone or incorporated into same document? Need to consider sophistication and judgment of business team and whether they will send out the completed template along with the instructions Do not want to have instructions for completing to be lost in the shuffle if not built into the same document as the NDA template Relatedly, will business team send out template with fallback provisions? © Phillips & Reiter, PLLC 2016 All Rights Reserved

NDA example 6 Depending on the size and complexity of the company, consider creating a process summary for the most commonly used contract templates Importantly, detail what should be done when the contract has been signed by both parties Ideally, the business unit owns the original contract and provides the legal department with an electronic copy Typically, the business units commit to providing the legal department with copies of completed contract but do so only erratically if at all Solution: “one throat to choke” in each business unit and performance tied to variable compensation component © Phillips & Reiter, PLLC 2016 All Rights Reserved

Solutions: Develop Published Contracts Process 7 Components of good process: Who are responsible parties? What are the responsibilities? What agreement can be used and where is it located? Who can negotiate? Who has to approve and who can sign? Where should executed agreement be stored? Do you want to audit? Get input from stakeholders when developing process Get buyoff from management before implementing (e.g., they will support and not undercut) Establish launch plan for process, make available in central location for all employees, and train! © Phillips & Reiter, PLLC 2016 All Rights Reserved

Solutions: Sample Contracts Process 8 1. Purchasing and Operations Agreements 1.1 Designated Company employee responsible for procurement decision (“Purchasing Agent”), as applicable, begins negotiations with other party. Purchasing Agent obtains approval from Finance on proposed financial terms. 1.2 Purchasing Agent and other party jointly decide on the appropriate type of agreement into which they will enter. Unless otherwise reviewed and approved by Legal, all contractors for service should utilize Company’s standard Contractor Services Agreement. 1.3 Company creates first draft of agreement and provides Purchasing Agent with copy, except for contractor services addressed in If necessary, the parties negotiate terms and conditions of applicable agreement Finance and Legal review, approve and amend all versions of agreement, including final version, prior to submission to other party. 1.5 Purchasing Agent submits revised version to other party. Parties further negotiate if necessary. 1.6 Parties approve final draft. Legal counsel and Finance review and approve and prior to execution by Designated Company Officer. 1.7 Parties execute applicable agreement. Designated Company Officer to execute agreement on Company’s behalf. 1.8 Purchasing Agent maintains one original for its files and places one fully executed copy (in pdf) on shared drive for filing and 1 copy and/or original to other party. 1.8 If issues arise requiring an amendment to the agreement, the initiating party proposes changes Drafting/negotiation begins again, as required, per the above procedures. 1.9 If term of the agreement is longer than 1 year, Purchasing Agent reviews it annually. © Phillips & Reiter, PLLC 2016 All Rights Reserved

Solutions: Agreements Repository 9 Selection of repository will depend on variety of factors: Needs (e.g., just looking for place to organize docs or do you need additional capabilities?) Staffing (e.g., will have someone to manage system?) Cost Solutions vary from comprehensive to basic Aptus (populates standard forms, search capabilities, integrated into Oracle, combines amendments into single document, secure, write and read protections) SpringCM (populates standard forms, secure, write and read protection, some search capabilites) FTP Site (secure, some write and read protections) © Phillips & Reiter, PLLC 2016 All Rights Reserved

Solutions: Train and Track Results 10 Train employees on templates, fallback positions, and process Explain the importance of typically nettlesome “legal” provisions such as limitations of liability from a business perspective Goal is to train for self-help for routine matters Be clear about when they should seek your assistance Track less legal time/lower legal spend improvement to show senior management What is important is order of magnitude improvement, not precision © Phillips & Reiter, PLLC 2016 All Rights Reserved

Questions and Comments 11 What are biggest challenges in your current process? Have you been through an event where these challenges came to light (e.g., corporate event, audit, etc.?) Are there areas that are manual that you think could be automated? What is the contract management software program you use and what do you like/dislike about it? © Phillips & Reiter, PLLC 2016 All Rights Reserved