Patrick Lim
Partner at Raj, Ong & Yudistra
In our last article, we explored specific instances where legal audits would be relevant to businesses. Here, we take a look at the general process for conducting a legal contract audit. It typically involves the following steps:
Identify the contracts to be audited
The first step is to identify which contracts need to be reviewed as part of the audit. This may include all contracts currently in effect, or a specific subset of contracts, depending on the purpose of the audit.
Gather the contracts
Once the contracts to be reviewed have been identified, they should be gathered and organized in a way that makes them easy to review. This may involve creating a database or spreadsheet of the contracts, or simply organizing them in a physical file.
Review the contracts
The next step is to review the contracts to identify any issues or opportunities. This may involve reviewing the terms and conditions of the contracts, as well as any relevant laws or regulations that apply.
Identify issues or opportunities
As the contracts are reviewed, any issues or opportunities that are identified should be documented and analyzed. This may involve identifying the potential impact of the issue or opportunity, as well as any potential solutions.
Recommendations
Based on the results of the audit, the auditor should develop recommendations for addressing any issues or taking advantage of any opportunities that were identified. These recommendations may include changes to the contracts themselves, or to the company’s contracting processes or policies.
Implementation
The final step is to implement the recommendations from the audit. This may involve negotiating changes to the contracts, updating policies or procedures, or taking other actions as needed.
Overall, the process of conducting a legal contract audit is designed to identify potential issues or opportunities related to a company’s contracts, and to provide recommendations for addressing those issues or taking advantage of those opportunities.
In the next article, we will dive deeper into each step. At the end of this volume of articles, you should hopefully be able to take the first steps to carrying out your own legal audits.