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Kathleen M. Ireland gives IBM's attorneys contract guidance with online tool

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One of the major projects Kathleen M. Ireland has tackled at IBM has been to create a guide for the 4,000 or so attorneys used by the company worldwide who negotiate customer contract agreements.

The tool, known as the Attorney Inside Guide for Contract Professionals, “enables our attorneys to understand the construct of contract language as respects insurance,” so IBM accurately represents the type of insurance coverage it requires for inclusion in customer contracts, said Ms. Ireland, IBM's vice president of global risk and insurance.

The guide allows the contract to be compliant with the customer's requirements, she said. It also serves to “make sure we're not over-emphasizing what coverage might be there,” she said.

“Because we do business 24 hours a day, seven days a week around the world, with my small department, the guide is a live link on our legal site which allows them to understand how to negotiate the terms and conditions.”

The guide contains information such as IBM's risk philosophy, its appetite for risk retention and risk transfer, and insights for why the customer asks for certain types of provisions.

“It also contains international-specific terminology, talking points specifically for the attorneys to help the customer understand the specifics of the coverage and how IBM's broad programs meet all of their requirements,” Ms. Ireland said.

“The difficulty is that there's no real standard wording that customers come forth with, because some will have some risk management input in their own companies, others will go to outside legal counsel,” she said. “What we find is that where we may cut out a certain requirement or liability under the terms of the contract — we're not going to be responsible for X — they may try to insert that requirement in the insurance section by saying "You will be responsible for X by having insurance for it.' And whether we have insurance or not, we may not want to take on that obligation.”

“To have the right terminology matching what we're doing and what our coverage provides doesn't always mesh with the terminology that the customers are using,” Ms. Ireland said. “So this has been a great educational tool not only for our attorneys but for our customers as well.”

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