Long-time customers of Net Friends sometimes notice that we update our service agreements and statements of work from year to year. When reviewing a renewal quote, a customer might ask why certain language has been altered. While we’re always happy to answer questions about a particular contract clause, we thought it would be helpful to put together a blog post describing the revision process overall.
Why We Update Contracts
Before going into the “how,” there are three main reasons we might decide to make changes to our contract language:
1. Current language is ambiguous or misleading
We call these “bug reports.” When a piece of software does something you don’t expect, that’s a bug. If a contract’s wording leads to an interpretation you didn’t intend, that’s also a bug. We try to handle these bugs promptly.
2. New service features have been added
Our services are constantly being improved and refined. Once a new service component has been piloted and launched, we add it to the contract so that customers can see the added value upfront. Occasionally, we also remove services that have become outdated.
3. We need to address risks
A contract introduces risk to both parties. Sometimes customers feel like the current contract doesn’t make us sufficiently accountable in a certain area; other times, we decide that a contract exposes us to unsuitable costs, or standards we can’t meet. Balancing risk is one of our most vital, and most challenging, contract-writing tasks.
How Contracts Get Updated
Since many of our customers like to align their contracts with the calendar year, Q3 is usually contract-updating season here at Net Friends. We schedule meetings with key operational staff to review all the bug reports that have been filed that year, as well as relevant post-incident analyses. We go over each service contract line by line to ensure that our staff understand their obligations. This is also their chance to flag language as out of date.
Once we know which parts of each contract should be updated, our in-house writing team drafts new provisions. This team is made up of long-time employees with decades of customer service experience. Every edit is scrutinized to make sure the resulting clauses are clear and understandable by both our customers and our employees, adhering to our “natural language” standards.
New provisions are then reviewed and approved – or sent back for changes – by our executive team. If a particular change seems likely to have legal repercussions, we can send it to an external contract law office for review, but this is rare. Once the provisions are finalized, we merge them into the official contract templates in our cloud-based proposal and e-signing platform. Then our proposals team creates new blank service proposals that include the updated language. These proposals are then ready to be sent to customers in Q4, with enough time for all customers to review the changes and raise any concerns before the current contracts expire.
The last, but most important, step in the contract update process is that we prepare “release notes” on the contract changes for distribution to all employees. These notes describe each change, the reason for the change, and the operational impact. We also update our new employee onboarding. It’s critical that our staff are comfortable and familiar with our service contracts. They must be able to handle customer questions and concerns without deferring to “the legal department.”
We hope this look behind the scenes at how we create our contracts has given you some insights into how your company can handle contract review. We invite you to reach out to us if you’d like to know more.