The following are a few examples of reasons to perform an audit of your legal documents.

1. Technology Policies

Most employment agreements do more than just set the salary of an employee and the number of vacation days allowed. These agreements contain employee policies and workplace procedures that must be followed, and the more complicated and high-profile the position, the more restrictive these agreements are of work, and even some personal, activities.

There was a time when having an e-mail or computer policy seemed ridiculous and overly controlling but today these are commonplace clauses in most employee contracts. Now, more and more companies are adding policies for cell phones and even social networking sites. If your employee policies don’t include the word “Twitter,” chances are they need to be reviewed.

2. “Personal” Online Activities

The Federal Trade Commission (FTC) recently released updated guidelines aimed at protecting consumers from potentially misleading endorsements. Under these new rules, an employer could be liable for statements made on non-employer maintained websites (such as personal blogs, MySpace, Facebook, and Twitter) by employees. Employees are now required to disclose their relationship to an employer when making endorsements even if those endorsements reflect their own thoughts, opinions, and beliefs. A misleading statement by an employee made on one of these social networking sites can expose an employer to expansive liability but I’m guessing most employees won’t consider such activities damaging, or even covered by the terms of their employment.

3. Non-transferability Clauses

When parties come together to form a contract they usually only want to deal with the other party and require that the terms of the contract are nontransferable without their written consent. These types of clauses are generally not argued about and present few problems, that is, until a Court decision in September of 2009. In the case of Cincom Sys, Inc. v. Novelis Corp., the 6th Circuit held that a nontransferable software license was violated when a party to the contract merged with another subsidiary of its parent company, thereby changing its corporate structure.

Because this type of language that prevents transfer or assignment of a contract is so common it is highly recommended that an audit be performed in advance of any mergers or sales.

Conclusion

Most businesses realize that there are certain legal services included in the cost of doing business. My firm deals with many individuals who have recently started a business or are contemplating taking their first steps to a new venture. Too often, however, we encounter people who simply want the minimum work possible to allow them to move on to “more important things” and who have no interest in developing an ongoing relationship with an attorney or law firm. In many cases these individuals turn to form contracts and non-attorney legal providers to give them standardized templates and forms that they try to adapt to suit their needs to save money. While these practices may appear to work at the time you never really know the value of your legal documents, or of a relationship with a good law firm, until you are paying to enforce your rights in court.