Corporate Compliance and Governance Blog

Implementing a Contract Management System to Reduce Your Risks and Costs

Contract management has become a critical component in many companies’ compliance and risk management programs. According to industry experts, a typical Fortune 1000 company manages between 20,000 and 40,000 contracts a year. Each of these contracts contains dissimilar terms, requirements, and commitments. As a result, companies find that is valuable to implement an electronic contract management system and process for managing contracts from formation to termination, including tracking the various deadlines and ensuring that obligations are fulfilled. For this reason, many companies are evaluating how to best manage their contracts.

So where do you begin? A good starting place in evaluating your contract management needs is to understand and evaluate how you currently handle contracts. First, identify the process you use to initiate contractual negotiations and the person who manages the process. Other questions to consider include: What happens when someone needs a contract? How is the request for a contract handled? How do you interact with your business units to handle their contracting needs? As part of this evaluation, you will need to determine what kind of contracts you are managing. For example, do you have your own standard contracts, are you writing your contracts from scratch, or are you utilizing the other parties’ contracts? After you understand what process you are using, gather the necessary stakeholders to determine if this process provides you with the necessary risk and compliance protection your company needs. It may be that you are satisfied with your existing process. However, if your contract management process is inadequate or wasteful, assessing its current condition will provide justification for developing a more efficient one with the assistance of an outside service provider.

Continue reading "Do You Need A Contract Management System?" »

CSC Matter Management can help reduce your budget in several ways. First, according to a study conducted by the ACC*, companies who implement a matter management system save an average of 8% on their outside legal spending. Much of this saving results from eliminating duplicative or unnecessary legal work. Second, unlike other matter management systems that have significant software installation costs, CSC Matter Management employs a software as a service model (SaaS) with an affordable annual subscription and no IT costs, seat licenses, or update costs.

Third, CSC Matter Management is extremely useful because it is a robust tool that can handle a wide variety of matters. CSC customers use our matter management system to handle matters including litigation, contracts, claim administration, foreclosures, bankruptcies, subpoenas, IRS tax levies, and garnishments. Because our platform is fully configurable, however, our customers also use it to handle matters not traditionally served on us as registered agent such as trademarks, board communications, loan documents, motor vehicle fleets, and human resources matters as well as to manage risks located at isolated or remote offices. As a result of the versatility of CSC Matter Management, customers find that are often able to eliminate some of the discrete, non-integrated solutions that they are currently using.

You can learn more about CSC Matter Management by attending our upcoming web seminar on March 3rd & 4th: Matter Management - Getting the Most for Your Technology Dollars.

To register for the web seminar or obtain additional information, email us or call us at 1-800-927-9801 Ext 3678.

* The 2007 ACC/Serengeti Managing Outside Counsel Survey

Under federal tax law, the IRS can serve notice of levies on banks and other financial institutions to levy upon customer account balances because of unpaid taxes. Companies are held liable for the full amount of the levy (plus penalties and interest) for failure to comply within the allowed timeframe. It is equally important, however, for your company to have procedures in place to freeze customer accounts on the day of the receipt of the levy notice. If a customer cleans out an account after your company received a notice of levy, you will be liable for the full amount of the levy.

CSC can help you manage IRS levies:
• Designate CSC as your tax address with the IRS.
• Receive, scan, and index incoming levies from the IRS, populating them into our matter management platform – on the same day as receipt.
• Optimize your IRS tax levy workflow by implementing matter management.
• Provides collaborative tools, task assignment, deadlines, tracking, monitoring, and document storage.
• Allows for on-demand report to ensure transparency and effectiveness of the entire process.
To learn more about how CSC can take the risk and administrative burden out of complying with IRS tax levies, email us or call us at 1-800-927-9801 Ext 3678.

In times of economic crisis, reducing your exposure to bankruptcies is critical to your business survival. It can be difficult to know where to begin, however, as bankruptcies pose risks that are often scattered and obscured throughout large organizations. Communication and collaboration between legal, finance, and operations functions is vital to mitigate risks and reduce costs because different functions possesses unique expertise, knowledge, and business intelligence. For instance, legal can enforce creditor rights in state court or bankruptcy proceedings, finance can manage customer credit exposure and collections, and operations can identify threats to the supply chain and enterprise infrastructure. Bringing these diverse teams together can be challenging, particularly if they have functioned independently in the past and lack the technological tools to share their knowledge and workflows.

Legal departments can provide valuable assistance to other departments and business units by acting proactively. For example, legal can negotiate debt settlements, issue demand letters, or take legal action earlier in the collection process than done traditionally. Legal can reduce credit exposure by assisting finance in making proper reclamation demands, stopping goods in transit to insolvent companies, and determining whether to continue doing business with companies operating under bankruptcy protection. After a bankruptcy filing, legal can help repossess collateral by obtaining relief from the automatic stay, file administrative claims, ensure that defaults are cured when leases and contracts are assumed or assigned, and assert “critical vendor” leverage, where possible. Legal can help reduce credit exposure prospectively by negotiating better payment terms when dealing with suppliers, customers, landlords, tenants or other contract counterparties, including requiring increased assurances of payment and performance or more stringent default or termination provisions. Finally, legal can make sure debt repayments from potentially insolvent customers are structured so as to preserve defenses to preference liability in case the customer eventually files for bankruptcy.

Continue reading "In-House Legal Department's Role in Managing Bankruptcy Risks and Costs" »

Cost-Effective Subpoena Compliance: Fulfilling Subpoenas Without Violating Applicable Privacy Laws

Complying with a wide variety of incoming subpoenas can be a burdensome task for corporate legal departments with increasingly limited money, time, and staff resources. Juggling and tracking multiple subpoenas including gathering voluminous amounts of documents and meeting court-imposed deadlines requires seamless coordination between individuals and across departments. Late or incomplete compliance with subpoenas can result in court-imposed penalties and adverse litigation outcomes against the company and vital stakeholders, especially if fulfillment is done in violation of certain financial, electronic communication, and medical information privacy laws.

Regardless of the nature of your business, your company will have to respond to any litigation subpoenas that it receives. If you fail to comply, courts may hold your company in contempt and possibly impose fines or penalties such as court costs, attorney’s fees, or sanctions. As an extreme case of noncompliance, two nonparties were held in contempt of court for their willful failure to comply with court-issued subpoenas and orders and assessed $216,169 for plaintiff’s attorney’s fees.

Besides complying with litigation subpoenas, companies in different industries may also need to comply with financial, electronic communications, or medical privacy laws. For example, telecommunication and internet service providers must comply with the Stored Wire and Electronic Communications Act (SWECA) under which persons aggrieved by the wrongful disclosures of electronic communications are afforded civil remedies including injunctive relief, actual damages, reasonable attorney’s fees and costs, and punitive damages if disclosures are willful or intentional. Similarly, financial institutions also face potential liability for not adhering to the stringent customer privacy protections embodied in the Right to Financial Privacy Act (FPA). For disclosing customer financial information in violation of FPA, financial institutions will be liable for actual damages, attorney’s fees and costs, and punitive damages if disclosure was intentional or willful. Additionally, health care providers and health plan administrators must be careful not to disclose protected personal medical information when responding to subpoenas except as permitted under the Health Insurance and Portability Accountability Act of 1996 (HIPAA).

Continue reading "CSC Matter Management for Subpoenas" »

Contract management has become increasingly complex.

Paper traffic from contract notices is overwhelming.

Fortune 500 companies and others are managing hundreds to thousands of contracts with multiple notice provisions, renewal dates, related litigation, and rigorous audit, tracking and compliance requirements.

Managing vendors and invoices is extremely time-consuming.

All these demands are costly in an economic climate with increasing budget pressure to reduce costs.

CSC provides a Contract Management Solution that can:

* eliminate the burden of processing notices
* significantly reduce your costs
* minimize your risks
* manage key dates, critical data, documents, and vendors
* organize and classify contracts

Continue reading "Reduce the High Costs and Risks of Managing Contracts " »