Corporate legal departments consider contract review software to be one of the top technology solutions to streamline operations. Nearly every lawyer struggles to accomplish more with fewer resources in response to pandemic-related staff cuts and remote work requirements. Intuitive contract review software helps these attorneys save time, improve processes, and enhance negotiations.
The Purpose of Contract Review Software
Corporate legal departments and procurement teams are staffed with busy professionals who have little time to waste on redundant tasks. Contract review software provides several benefits enabling these legal professionals to optimize and accelerate the contract review and negotiation pipeline.
Benefits of Contract Review Software
- Speed: The contract review process is time-consuming. By automating routine contract review to accelerate the contract approval process, attorneys can focus on higher-level, strategic tasks.
- Organization: Contract review software can enhance corporate legal department organization by more effectively categorizing agreements, weighing risk exposure, and updating standards based on review insights.
- Enhanced negotiations: Knowing contract areas to target and avoid during negotiations can help attorneys avoid agreement bottlenecks and streamline the contract approval process. Moreover, contract platforms that highlight areas that need attention based on playbook compliance can ensure companies maintain favorable negotiation positions.
Learn more about how contract review software can save time and money on legal operations training.
While contract review software can enhance legal department’s contract processes, there are significant differences among available technologies.
What Types of Contract Review Software Are Available?
Every type of contract review software is unique, but these technologies share several important characteristics. In most cases, contract review software will leverage a combination of four distinct capabilities: human-in-the-loop, fully automated, text extraction, and redlining.
Pros |
Cons |
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Human-in-the-Loop |
A human-in-the-loop solution allows firms increased control over the contract review process, as an attorney, at some point, will review the results. In some cases, this may allow departments to obtain a more in-depth analysis. |
Since human-in-the-loop technology still depends on staff, this software is slower than its fully automated counterparts. Also, no human is perfect; mistakes persist when the review process requires an individual to implement comprehensive department standards and policy. |
Full automation |
Fully automated solutions accelerate the contract review process. Tasks that previously required days or weeks of attorney labor can be completed in a fraction of the time. One study found that departments could reduce contract review time by up to 80 percent. |
Not all fully automated programs are created equally. Some may sacrifice the quality of recommendations and redlining to eliminate the need for human-in-the-loop components. Other programs are only able to offer extraction features without suggestions or redlining services. |
Extraction |
Software that provides clause extraction can remove and categorize contract information. This allows attorneys to focus on areas of high need and eliminate issues with common mistakes. Such a feature is especially useful for a company that completes bulk contracts and needs to maintain a database. |
While text extraction can recognize phrases and clauses, it cannot make suggestions on their resolution or "author" anything in a document. As a result, a human-in-the-loop component likely is required for any software fully reliant on text extraction. |
Redlining |
Redlining software can mark up documents, make suggestions, and improve overall contracts like an attorney. Additionally, this software can serve as a negotiation tool by allowing attorneys to submit marked-up contracts to support their positions. |
The quality level of contract markup solutions can vary widely. Some of these solutions merely offer a legally oriented Microsoft Word. Others boast highly intuitive results similar to that of an attorney. Requesting a demo can help the legal department understand what to expect from the software. |
When considering an investment in contract review software, focus on a platform that combines full automation with redlining and utilizes an AI Digital Playbook. This way, your legal department can enjoy enhancements to speed and accuracy while minimizing contract risks.
LexCheck's AI-powered contract review and negotiation platform combines the speed of full automation with playbook-compliant redlining and intuitive, context-based revisions. Connect with us at sales@lexcheck.com to learn more, or request a demo to experience the technology first-hand.