Legal Document Review Framework

This guide provides a consistent approach for analyzing any legal document against a checklist of green, yellow, and red flags.

Analysis Approach

1. Document Identification

First, identify key document attributes:

• Document type: NDA, vendor agreement, terms of service, privacy policy, employment contract, lease, etc.
• Parties: Who is involved and what are their roles?
• Effective date: When does this take effect?
• Term: How long does it last?

2. Red Flag Scan (Priority)

Start by scanning for red flags - any single red flag means the document needs escalation:

• Read through the entire document once quickly
• Flag any language that seems unusual, one-sided, or restrictive
• Check against the domain-specific red flag list
• If ANY red flags found, note them prominently

3. Yellow Flag Check

Next, identify yellow flags that warrant careful consideration:

• Look for terms that deviate from standard practice
• Multiple yellow flags or one significant yellow flag warrants review
• Note specific section references for each concern

4. Green Flag Confirmation

Finally, verify green flag elements are present:

• Check that standard protective terms exist
• Note their absence - missing expected terms is itself a flag
• Confirm mutual obligations where appropriate

Flag Classification

Green Flags (Generally Acceptable)

• Standard industry terms
• Mutual obligations
• Clear, reasonable definitions
• Balanced risk allocation
• Normal time periods

Yellow Flags (Review Carefully)

• One-sided terms that may be negotiable
• Unusual but not necessarily problematic provisions
• Terms requiring clarification
• Deviations from standard practice

Red Flags (Requires Escalation)

• Deal-breakers without legal review
• Unusually risky provisions
• Terms outside normal business parameters
• Anything suggesting the document is more than it appears

Documentation Standards

When documenting findings:

• Be specific: Reference section numbers or clause locations
• Quote relevant language: Include exact text for key concerns
• Explain impact: Translate legalese into business implications
• Prioritize: Lead with most significant findings