CHARLOTTE, NC – Steve Hunting, Partner of Parker Poe Adams & Bernstein LLP, and Kathy Brucks, Director of Information Security at Lexington Medical Center in West Columbia, SC, gave a presentation on cloud computing contracts on April 23, 2015 at the 2015 Annual Meeting of the North Carolina Bar Association Health Law Section.  Their presentation, “Top Issues in Cloud Computing Contracts,” addressed negotiating strategies, remedies, business continuity, data security and system performance issues.

Mr. Hunting advised that lawyers can add value in these key ways:

• Develop a risk management process for the project and avoid, if possible, marking up a vendor’s form contract just before the parties want to sign
• Address remedies through the service level agreement, indemnification provision, and damages limitations to help achieve your client’s goals and to align the parties’ interests; and
• Begin with the end in mind and focus on transition and business continuity issues

Additional insight from Ms. Brucks included:  1) Review carefully the type and scope of the third party assessment the vendor offers to ensure it provides appropriate data security assurances; and 2) Incorporate system performance requirements and associated measurement tools into the contract.

Hospitals and other health care providers are facing these issues regularly as they outsource the hosting and maintenance of software applications and the storage of data.  Outsourcing can provide cost savings, rapid deployment, system scalability, other efficiencies and appropriate data security.  It also introduces additional issues into the provider’s risk management analysis, largely based on the fact that a third party rather than the provider has possession and control of vital and sensitive assets and information.

About Parker Poe

Parker Poe Adams & Bernstein LLP has approximately 200 lawyers in five offices located in major markets across North Carolina and South Carolina. The firm provides legal counsel to large commercial and public organizations on litigation, corporate and regulatory matters.