The Art of Redlining Legal Documents (the Smart Way)

Date
November 29, 2022
Category
Date
November 29, 2022
Author
Gary Sangha | Founder & CEO
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Redlining legal documents is an artform that takes time and skill to master. But with top legal talent in short supply these days, it can be a challenge to ensure every contract receives the eagle eye review and attention it deserves. Training staff members on what to look for when redlining a legal document is a start, but applying automation technology to the process can be an entirely transformative initiative that yields markedly improved results.

Group of lawyers manually redlining legal documents around table

How Is Contract Redlining Done?

A recent poll found that 96% of legal teams still use MS Word or Google Docs to redline a contract. However, it’s an old-fashioned process that still relies heavily on manual efforts such as side-by-side document comparisons, looking up contextual references, catching errors with the naked eye, cross-referencing drafts with templates to ensure all clauses are included, and combing through paragraphs line-by-line. Though redlining is exceedingly important, the job feels menial and the process is painstakingly slow.

What Do You Look for When Redlining a Contract?

Legal redlining is an essential part of conducting business today. Teams tasked with this duty need to look for a number of issues when redlining agreements, including:

  • Does the draft adhere to approved boilerplate language on all essential clauses?
  • Are there spelling, grammatical, or technical errors in the writing?
  • Are important terms and phrases defined and applied consistently?
  • Are conjunctions (or, and, but) used correctly? 
  • Is inclusive or exclusive language (every, any, each) used correctly?
  • Is the company’s preferred negotiating positions upheld?
  • Are industry best practices applied?

Satisfying these criteria paves the way for fewer mistakes being made while increasing the likelihood of clients signing.

Why Proper Redlining of Contracts Matters

Redlining is a collaborative process that hinges on teams working together to determine whether contract terms are in line with company capabilities and profitability. Presumably, the more errors that are caught and addressed, the better the negotiation process will be. But sometimes concessions must be made to arrive at a mutual agreement.  

It’s vital that all parties work on the same version of the agreement, with revisions tracked and stored properly. It should be immediately clear who made a redline, when, and why. When manual processes are used, a number of simple errors can lead to frustration and loss, including:

  • Draft versions can be left sitting in outboxes for inordinate amounts of time.
  • Redliners can end up working on the wrong version of a draft.
  • Inconsistent naming conventions may cause confusion.
  • Looking up contextual information to support a change can be arduous.
  • Parties may inadvertently agree to outdated obligations they can’t fill due to poor tracking.

In theory, the goal is to reach mutual understanding without delay, but that isn’t always possible with manual redlining. These difficulties lead to longer sales cycles, lost business, and lost trust. What’s more, they can make the difference between earning a profit or losing it.

Redlining Contracts the Smart Way—with Automation

With technology infiltrating every aspect of business in increasingly novel ways, forward-thinking legal teams are now choosing to redline contracts the smart way—with automation technology that ensures contract playbook compliance, best practices, and consistent enforcement of negotiation best practices in every draft. 

With LexCheck’s contract review and negotiation solution, for example, users simply:

  • Provide sample documents to enable LexCheck to create a digital playbook for that contract type.
  • Email that document type to the system and in less than five minutes that document is reviewed in accordance with that Digital Playbook.
  • Receive a fully redlined version of the document, complete with necessary changes and explanatory comments.
  • Seamlessly apply changes at the click of a button or auto-forward drafts to legal counsel for further review.

While traditional redlining is a manual, time-consuming process fraught with errors, automated contract review software like LexCheck can help legal teams free up innumerable hours by intelligently reviewing and redlining agreements in minutes, not hours or days. 

Human judgment and skill are, and always will be, necessary factors when redlining legal documents such as contracts. However, corporate legal departments find they have more time to think critically about contracts when the baseline work is automated for them. For example:

  • Playbooks ensure that contracts are consistent, no matter which lawyer reviewed them.
  • Playbooks eliminate the risk of unnoticed terms that could negatively affect the organization.
  • Playbooks speed up turnaround time and streamline the review process by removing doubt about which terms should be included or excluded.

Automated redlining is the future of contract negotiation lawyers envisioned just twenty years ago. The legal sphere and the technology supporting it can only move forward from here, and the futures of both are connected in ways we have yet to see or understand. Solutions like LexCheck, however, are helping legal teams bridge those important gaps in the meantime.

If you’re ready to experience the LexCheck difference, contact us at sales@lexcheck.com or request a demo to see how much easier redlining legal documents can be.

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