Why Your Organization's Sponsorship Agreements Need an Automated Contract Review Process

Date
November 16, 2021
Category
Date
November 16, 2021
Author
Gary Sangha | Founder & CEO
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As organizations respond to the digital transformation of the contract approval process, many corporate legal departments struggle to update legacy systems. This is especially true with sponsorship agreements, where negotiation often is conducted remotely, and workflows can become complex.

Signing a sponsorship agreement

By leveraging artificial intelligence (AI), innovative legal departments automate and standardize the negotiation process to improve overall results. AI-powered contract review reduces the number of steps needed to complete agreements that are 100% compliant with your company’s negotiation playbook. As a result, departments that integrate an AI solution can conserve resources while ensuring organizational compliance when executing sponsorship agreements.

The Modern Need for Sponsorship Agreement Enhancements

Reviewing modern sponsorship agreements presents several challenges. These agreements are often between parties with different interests—one seeking marketing exposure, the other securing additional funding. As such, sponsorship agreements require balancing multiple interests to ensure both parties are satisfied. If incorrectly implemented, significant risk may be introduced into the contract. 

Negotiating a sponsorship agreement with organizations coming to the table with unique needs and expectations often leads to delays and frustration. Consequently, a simple template might not be enough to support the necessary terms, as template revisions frequently present additional risk. Additionally, exceptions to terms may be requested, and this can require an extensive review. As a result, the workflow can become complicated.

The basic flow of the process described above displays the back-and-forth communication and collaboration required between departments and teams. Unfortunately, this leads to stalled progress that causes sponsorship agreements to take longer than necessary. 

Cloud data and data management company, NetApp, encountered this bottleneck when managing their sponsorship agreements. LexCheck’s AI-powered platform provided the solution.

How AI Accelerates Contract Approvals

Any company that negotiates sponsorship agreements has terms they are willing to bend on and terms that are non-negotiable. In NetApp's case, they kept track of these in an internal playbook. However, without AI-powered automation, ongoing back-and-forth communication was necessary to determine if the various exceptions requested were covered under corporate policies.

With LexCheck’s AI solution, the company's playbook became a data source for all its sponsorship contracts. This strategy significantly shortened the workflow and allowed the company to streamline and accelerate its approval process

With a data-driven and automated process, NetApp reduced turnaround time. Overall, they reported a reduction in contract approval time by 80% while cutting escalation rates from 80% to 10%.  

Because the AI recognizes when requested exceptions are similar, it can dramatically reduce the need for attorney intervention. If the exceptions were approved previously without issue, the AI knows they do not require escalation. Terms that comply with company standards are accepted automatically; whereas, unusual or higher risk exceptions are flagged for increased attention. 

Sponsorship agreements are complex, and they can expose organizations to significant risk if not handled appropriately. However, detailed processes supported by technology can help legal departments better understand risk while accelerating the time to completion. AI that leverages a company’s digital playbook and past contracts can rapidly review even the most complex topics while highlighting the areas that require attention.

LexCheck can improve your sponsorship agreements by using AI to standardize your terms and help you overcome exceptions. To learn more, request a demo or reach out to sales@lexcheck.com.  

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