25 May 2006 | Helen Morrissey

Increased use of contract frameworks can help organisations save time and money, according to legal firm Slaughter and May.

Robert Sumroy, head of IT and outsourcing practices at the company, described how legal firms are asked to draft contracts from scratch despite similar agreements being in place elsewhere within an organisation.

Speaking at a best-practice conference held by consultancy firm Success Factor Partnering, Sumroy argued that by recognising the basic similarities between contracts generic frameworks could be drawn up. Using these as a template would speed up the drafting process as the basic terms would already be in place, he said.

"A lot of time and money can be spent getting advice on pre-contract documentation. However, if you understand how a contract works and can apply it to the one being drafted you can work with lawyers to create a framework that can be reused."

Sumroy added that the time and money saved means organisations can afford more legal support at a later stage such as when the contract is updated.

However, while the use of generic contract frameworks can be beneficial, Sumroy cautioned they should be approached with care.

"No two deals are exactly the same so you need to create a baseline by looking at what is standard between the contracts. This becomes the framework and you can then work the agreement around that. If parties want changes to the framework then they should pay for them as legal advice would need to be sought."

Tim Snow, strategic sourcing senior manager at Prudential, agreed framework contracts act as a good starting point in negotiations, but said their effectiveness relies on the skill of procurers.

"The skill-set of the procurers is essential," he said. "They must have a contractual understanding of the risks involved and create a contract that can cover those risks."

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