What to Give Outside Attorneys First When Requesting a Contract Review

Hello, I'm Noriaki Asato, Representative Attorney at LegalAgent.

When asking outside attorneys to review a contract, it is not uncommon for companies to simply attach the file and say "please review this." A certain amount of legal checking can be done from the text alone, but in actual practice there are many situations where it is difficult to make an appropriate judgment from the wording of the contract alone.

Contract review is not an exercise in abstractly debating whether individual clauses are formally appropriate. It is work that makes judgments in light of what business development the contract relates to, how much weight it carries for the company and how much risk the company can accept. Providing appropriate background information when making the request makes it easier to begin a review suited to the transaction.

The Purpose and Background of the Transaction

The first thing to share is what the transaction under the contract is for. The issues to focus on differ greatly depending on whether it is a usage agreement with a new customer, a renewal of an existing transaction, outsourcing the development of core technology, or an important contract that is a prerequisite for fundraising.

For example, even for the same service agreement, the weight of IP ownership, personal information handling and limitation of liability is completely different depending on whether it outsources simple tasks, system development at the heart of the service, or operational work in which customer data is entrusted. If you make the request while keeping the background of the transaction hidden, you risk receiving advice that is correct as a matter of law but does not fit the realities of the business. It is important to convey the background of the contract, even briefly.

The Relationship with the Counterparty and Room for Negotiation

In contract review, the balance of power with the counterparty and the room for negotiation are also major factors in judgment. The tone of the comments to be returned changes depending on whether the counterparty is a large company that will hardly accept any revisions to the clauses, a business partner with a long-standing relationship of trust, and whether your company is on the ordering side or the receiving side.

If a large number of detailed wording revisions are put forward for a contract with extremely little room for negotiation, the sales staff on the ground cannot present them to the customer and are left at a loss. Conversely, overlooking seriously disadvantageous clauses in a contract with ample room for negotiation must also be avoided. Communicating requests in advance, such as "we want to negotiate hard," "we only want the minimum risks checked" or "we would also like draft comments to send to the counterparty," sets the direction.

The Signing Deadline and Priorities

Sharing the signing date is also an essential element. The depth of the review needs to be matched to whether an urgent answer is needed the same day, whether there is time for a thorough review over several days, or whether it is tied to board approval or a fundraising schedule.

When the deadline is tight, it is realistic to prioritize serious risks and matters that need to be confirmed before signing. When making the request, adding not only the desired deadline but also the reason why it is needed by that date makes it easier for the attorney to prioritize the work.

Points of Concern for Your Company

Convey the issues that concern people internally when making the request. These are specific concerns such as "no cap on liability for damages has been set," "something seems off about the IP ownership clause," "there is an early termination clause unfavorable to us," "we do not understand how personal information will be handled" and "the counterparty has said this clause cannot be revised."

The attorney reviews the contract as a whole, but knowing which parts the requesting side feels uneasy about allows the attorney to give answers more closely aligned with the practical context. If there are issues that have already been discussed internally, sharing that history as well prevents rework. Contract review is not something an attorney produces the right answer to alone; it is a collaborative effort that supports business decision-making.

A List of Items to Share in the First Request

In practice, organizing and conveying the following items tends to make the review proceed smoothly.

• The type of contract and the specific purpose of the transaction
• The business relationship and balance of power with the counterparty
• Your company's position and the degree of room for negotiation
• The desired signing date and the reason for setting that date
• The contract amount and its importance to your company's business
• Clauses you particularly want checked
• Points raised as concerns internally
• The desired format of the deliverable (draft comments for the counterparty or an internal review memo)

With this information, it becomes easier to conduct the review based on the actual transaction. Even when using generative AI to summarize a contract or extract issues, accurate judgments cannot be made without input on such background circumstances.

At LegalAgent, we treat contract review not as merely correcting clauses but as legal judgment to move the business forward. If you want to establish a framework for ongoing review operations, LegalAgent's Legal Outsourcing service supports you from designing the request procedure and response format onward.