Why Outsource Software License Review

Feb 01, 2017

Although it seems that every company either is, or is becoming, a technology company in some way, using outside counsel for software legal review can be a smart way to approach an ever evolving task. Software licenses, including a wide range of issues that cannot be easily be checked-off in a checklist fashion, may be best addressed by a software attorney. Many small and medium-sized companies make some sort software purchase each year, but who reviewed the agreement? Many businesses are still surprised to learn that it can hire an attorney who focuses their practice on software licensing. Some even say that it sounds like a niche practice area. But, software licensing is very broad because it encompasses a vast myriad of underlying software.

Why not simply use the business’s general counsel or the outside counsel who advises the business on general matters? Simply put, the subject matter is highly specialized. Many business attorneys are dealing with employment matters, managing litigation, and handling issues specific to the internal business organizations. Unless the business in the business of buying software, it is likely that the business has not even considered the technical expertise that an attorney would need to effectively review, modify, or draft software licensing terms and conditions. 

Now, more than ever, an increasing focus on software cybersecurity and data privacy are adding more layers of complexity to an already complex practice. Because software licenses inherently involve intellectual property of the business and the publisher, great care should be given to the terms related to ownership, use, and the license model itself. Moreover, software salespeople are highly trained in the software contracting arena and typically used highly skilled attorneys to draft and revise the contracts on behalf of the software publishers.

When choosing an attorney to review agreements for software licenses or software services such as software as a service (SaaS) or other cloud based offerings, it can be helpful to ask the following questions:

     1.  Aside from being a lawyer, what is your actual background in technology?

     2.  What technology certifications have you obtained?

     3.  What technology training have you received?

     4.  How many software agreements have you reviewed?

     5.  What is complexity of the agreements you typically review, including typical page length, number of issues, and        technology involved?

     6.  And of course, what do you charge, and how long will it take to review?

Using an experienced outside software lawyer can help a company substantially mitigate risk by addressing issues such as software infringement, data security, ownership, warranties, service level agreements, and nuanced technological issues. With software licenses, it is often the case that the biggest risk is that which is excluded from the initial contract draft. Consequently, knowing what questions to ask to ensure that a reasonable agreement is reached can be one of the most important skills of the attorney, as well as the best reason to outsource the software license review process.

By Brian Kirkpatrick