When you think of contract management, do you think “compliance”? Most likely the answer is “no,” but that may soon change. An initiative was recently completed to standardize contract clauses related to compliance with anti-bribery regulations. The idea is that by having standard clauses, less time will be spent by in-house attorneys negotiating over these clauses. In addition, standardization of the clauses will make contractual compliance less onerous as businesses with hundreds of contracts will no longer have hundreds of different contractual obligations related to anti-bribery compliance.
The standardization of these clauses would bring some relief to law departments’ current concerns with contract management. According to our recent survey of law departments, keeping track of contract obligations is the fourth biggest issue facing law departments of all sizes. And for law departments with less than 20 attorneys, recreating language used in similar contracts and tracking changes during contract negotiations are specifically among top concerns.
According to Alexandra Wrage of TRACE International, the organization which undertook the project to standardize the anti-bribery compliance clauses, the standardized clauses have some additional benefits. By using standard clauses that vary depending on the risk level of the third party, parties that have the bargaining power to impose as stringent contractual requirements as they want, will create less work for themselves by using clauses with less extensive reporting requirements for third parties that present minimal risk. In addition, by using standardized clauses, organizations run less of a risk that regulators will see their anti-bribery compliance processes as outside of the norms followed by other companies.
Do you think your contract management process would benefit from using standardized anti-bribery compliance clauses? Is this a practice your law department might adopt?