The annual revenue of software companies in India is estimated to be in the region of USD 200 Billion in revenue and they contribute about 9% to the GDP. One of the fundamental pillars on which the industry functions is contracts, and particularly, the customer contracts.
The legal department of software companies act as more than legal advisor to internal stakeholders. With customer and vendor contracts forming the backbone of business of software companies, and inorganic growth contributing as a key driving factor, the General Counsel of software company is a key business partner to the business. Role of the General Counsel would typically extend from advising on legal risk, to crisis management to litigation – an expansive portfolio where contract takes substantial time.
Contracts are the foundational pillar of business for software companies. Example of some of the common business contracts of a software company range from non-disclosure agreements, customer agreements, licensing agreements, master services agreements, service level agreements, consultancy agreements, framework agreements, manpower services agreements, travel services agreements, lease agreements and infrastructure sharing agreements.
A General Counsel of a software company is an expert on business and legal issues to be addressed in her contracts. However, given the volume of contracts that are executed and the role played by the legal department in managing the in-flight and new contracts, a general counsel is typically assisted by a team of internal or external lawyers.
Despite the human capital that is typically available at the disposal of the general counsel of a software company, there are multiple challenges that need to be dealt with in respect of contracting.
Searching the contract database may be a very common need for a software company- to pull out a specific term from old customer contracts or for that matter, to look at a discount strategy that helped to close a deal. But unless contracts have been converted from PDF to a searchable medium, this cannot be executed. Typical storage solutions like Google Drive, Box or SharePoint are not purpose built for contracts and searching a contract from all of the documents stored on them could be equivalent to searching a needle in a haystack.
Typically, software companies on board a customer through a MSA or a similar omnibus document and then there are usually many amendments and other documents in connection with contracts of a customer. Putting all those as a docket is a smart way to smoothen the workflow.
The needs may vary but the timeline to answer these questions is always short and scrambling people at that last moment to do a manual review is generally found to be less than effective.
The above are some of the basic requirements. However, software business is an extremely competitive game. Thus, business functions do need more granular information from the legal department about customers. For example:
Then again, apart from generating reports for business divisions, legal departments of software companies may need to address regulatory compliance arising out of contracts. The compliance could range from GDPR to labour laws to FEMA to many other provisions. More importantly, cybersecurity is a big risk today and business needs to have clear idea, on each contract basis, on the obligations and liabilities following a data breach. To be able to know which compliance is mentioned in which contract and setting trackers for staying on top of any changes is a great way to make sure that regulatory burden of a contract is always discharged.
In short, the General Counsels of a software company require systemic support for advancing their objectives w.r.t contracting affairs.
If a software business is not using a purpose-built repository or contracts, it will be spending a huge amount of manual time to extract key information and then use excel like applications to track key event and dates. Excel like applications can be diverse in their functions but equally prone to manual errors. Further, in case of crisis response or a due diligence, time is a big constraint that can make or break a desired outcome.
This is where the Riverus Umbrella - Riverus' AI driven contract platform brings the following key features:
Are you a counsel in an IT-sector company? Book a 30-min demo to see how Riverus can help you manage your contracts.
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