Contract review is a standardized service designed to fit several business needs. Choosing the right option is going to depend on the overall goal of implementation. There are a few questions any organization should ask as they evaluate their options:
#1: Is the primary goal management or improvement?
Contract lifecycle management is different from contract negotiation and analysis. Lifecycle management often refers to the bulk management of a large number of contracts. Meanwhile, negotiation and analysis is designed to improve individual results and is forward looking. An organization worried about bulk management should lean towards an option that might only "read" contracts but can break them down into fields and store them in a database. Meanwhile, an organization looking to improve the outcome of contracts, in other words, how they are negotiated, will want to choose a solution that offers recommendations based on those readings.
#2: Is negotiation a critical component?
Some contract analysis software goes beyond simple redlining to provide information that helps companies negotiate better terms. This is especially useful when an organization has a negotiation playbook that they follow. In this case, the organization would do better to rely on a platform with either strong AI-enabled recommendation capabilities or a human-in-the-loop component.
#3: Are deadlines flexible?
The negotiation and contracting process can take time. For some companies, this is not a problem. They have room to negotiate and time to wait. In this case, a human-in-the-loop solution that takes a little longer might be fine. However, if deadlines are strict, full automation will likely provide a faster path to project completion.
#4: How experienced is the contract reviewer?
Someone who has drafted thousands of Non-Disclosure Agreements or Master Service Agreements is likely to make far fewer mistakes than an individual working on their first one or even their twentieth. A contract drafted by someone highly experienced in the industry might only require a basic markup. However, if the drafter isn't confident in their overall experience negotiating that type of document, a platform that offers recommendations would be far more suitable. Of course, no amount of experience will counteract unrealistic deadlines and sheer exhaustion that inevitably lead to unintentional negotiation errors.
#5: Are the contracts bespoke or standardized?
Contract analysis software runs on data. This can present a challenge when trying to deal with bespoke matters where little information is available. If working in a complex contracting environment, a human-in-the-loop solution that allows for specific customization based on a given subject is necessary. Nonetheless, commonly negotiated or boilerplate issues in those documents can still benefit from automatic contract negotiation, further enabling the attorney to focus on negotiating the truly bespoke parts of that contract.
Contract analysis software is invaluable for meeting challenges in the legal industry. It can act as a contract management database or as a negotiation aid based on the specific solution. The right fully automated and intuitive platform can help tackle these agreements while focusing the negotiations that surround them.
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The legal industry is in a state of flux as departments recover from the pandemic and develop strategies for the future. One major area of focus is legal technology, which can be used to streamline processes, facilitate telecommuting processes, and provide support for overburdened staff members. The demand for legal technology innovations has never been more prevalent, with 58% of corporate law departments1 saying workloads have increased significantly due to the pandemic. Thirty percent of all departments intend on increasing their spend on technology in 2021.
