4 Tips to Help You Prepare for Brexit
According to a report by Scottish law firm Brodies, the UK’s decision to leave the European Union could have a detrimental effect on many of the contracts banks and other large organisations have in place to underpin commercial relationships. This applies not only to contracts with organisations in the EU, but also to contracts with other organisations within the UK.
Brodies mention that Brexit’s impact on contracts depends on the type of contract and the organisation. However, it is likely that documents that comply with current EU legislation and regulations will be affected. There may also be commercial issues for supply chain where suppliers are located in other EU member states, or in countries where the loss of free trade arrangements secured through the EU may have an impact.
Indecision around Brexit will continue as the UK negotiates its exit from the EU. We know the contractual landscape could change, but not by how much, or by when. The two years provided by Article 50 may seem like a long time to prepare your business, but with thousands of documents to review, that time will pass very quickly.
Below are some tips to help prepare for upcoming changes.
Identify and locate all document templates at risk from Brexit
Document creation, management and control is a challenge at the best of times, but with Brexit coming it’s more important than ever. This will require gathering all of your document templates and consulting with stakeholders to ensure that you have the most up to date version of each of your organisation’s documents.
With HotDocs, your document templates are stored in the HotDocs Hub. We provide full training on how to use the HotDocs Hub, but also how to effectively manage your templates. This means you can always locate your documents quickly and make changes easily.
Review your documents and identify the sections that may be impacted by Brexit
Now that you have organised your documents, single-out the contracts that are most likely to be affected by regulation changes. Prioritise high-risk documents and begin identifying the elements of each document that will require change. Consider the elements below:
- Clauses that may require updating
- Contract termination
- Force majeure
- Change control
- Territorial restrictions
- Material Adverse Change (MAC)
With HotDocs, you can break up recurring elements of a contract into interchangeable variables. So, if Brexit affects any element, you can simply switch that variable using the HotDocs template authoring tool. Quick and simple.
Consider the next steps for affected documents by developing a strategy to mitigate the impact
Get your commercial contracts ready by reviewing your business activities to understand how Brexit and the possible future UK/EU trade structures impact them. You may want to:
- Stress-test existing contracts to understand how Brexit related impacts are dealt with to determine your current level of Brexit risk
- Consider how existing and future contracts could better protect against those risks
- Health-check existing contracts
- Seek strategic advice for dealing with existing contracts and mitigation strategies
- Consider which contracts will need rewritten with Brexit in mind
Getting started with document automation requires the initial transformation of documents into dynamic templates. Unless existing documents are in peak condition, this can take a little time and, although the return on this time investment is almost immediate, scheduling the time to check document accuracy and legal coverage before template creation can be challenging for busy companies.
Organisations could view Brexit as an opportunity to implement a document automation technology like HotDocs, as time will be spent on rewriting documents anyway. So, why not implement a system that is going to allow you to claw that time back, while vastly improving the way documents are produced forever?
Other issues to consider when reviewing your documents
- Analyse contracts and identify terms that may become invalid following Brexit
- Review any pricing with documents that may not include tariffs, quotas or other barriers
- Review contracts currently based on the free movement of goods and people around the EU
- Consider the impact of market disruption and currency fluctuations
Using HotDocs saves time, reduces cost and improves customer experience. But with Brexit looming, HotDocs provides the most valuable benefit of all, flexibility.
With HotDocs you can make changes easily and the software integrates with existing line of business systems, allowing businesses to react to any changes as they happen.
If your company’s documentation is facing changes in the wake of Brexit, get in touch to find out how we can help. For further information on how HotDocs can transform the way you produce documents, schedule a 30 minute demo.