Legal Ops 101: A Crash Course in Legal Language for Operations

A brief overview of the legal language every operations professional should know.

Basic Legal Language: It’s Essential for Operational Fluency

We get many questions about legal language and how companies can better educate their employees about some basic terms. So, we’ve decided to set out some of the basic legal language we come across on a day-to-day basis. This language is often found in company-specific contracts and documents that pass through multiple parties before being approved and signed.

Why do operations professionals need some awareness of legal language?

It can be beneficial for every member of a company to have a basic understanding of legal language in operations as, inevitably, these terms will appear during the daily operations of the organization.

When important or urgent documents are handled by someone without any knowledge of contract types or legal operations, their progression can be stunted as the document sits untouched in an “in-tray” for days on end.

Saving time by understanding the master service agreement

First, let’s examine one of the most frequently occurring legal agreements between two companies. The master service agreement (MSA) is a set of terms and conditions that binds all future transactions and governs the relationship between two parties. This is a popular choice for two companies embarking on a partnership because further alterations can be added without changing the original terms and conditions set out within the MSA.

If your team needs to expand the services or extend the time of a contract, it can be done without needing to amend or agree to new terms and conditions. They only need to sign off on the new agreement or amendment.

How does redlining work?

Redlining describes the process of reading through a contract and highlighting areas that either side would like to change in order to better protect their interests.

There are certain parts of a contract that it will not be possible to amend, so ensure that everyone understands which sections are open to redlining and which are set in stone. This holds especially true when members of your team without a legal background will be going through the contract.

Sharing some basic knowledge about legal ops will streamline your process, saving you time and resources as a result.

More basic but essential legal language

In this final section, we’ll summarize some of the most common legal language you’ll find in company operations.

• Term: A contract’s term refers to the period of time for which the contract will be effective. More specifically, it can detail whether or not the contract is automatically renewed, or if it needs to be agreed upon again by a certain time.
• Termination: A contract’s termination conditions outline the circumstances under which both parties will be permitted to end the contract.
• Consideration: This encompasses everything related to the goods or services the parties in the contract provide to each other during the professional relationship. As a simplistic example, one party could provide a service that is paid for by the other. In this case, the “consideration” is the payment to be received in exchange for the goods or services.
• Assignment: This details whether the responsibilities of the contract can be reassigned if either party wants to transfer the rights and obligations of the contract to another party — usually a subsidiary or parent company.
• Publicity rights: Within a relationship between two or more companies, there may be negotiations about whether one will be able to use the other’s logo, image, and so on. If one company is considerably larger than the other, this might prevent the smaller company from disclosing the fact that they’re working together.

Streamlining operations by improving legal understanding

With this piece, we hope to have illustrated how a broader understanding of basic contractual terms can improve the efficiency of a company’s operations.

A wider appreciation of legal language can help relieve some of the pressure on the legal department. Members of other teams will be more likely to understand how long it might take to receive a response to a query, or whether they need to send a query at all.

If your company could benefit from an increased understanding of legal language in operations, check out AdaptivOps, a cross-functional community for operations professionals.