The workplace has changed and things aren’t going back to the way they were. More people are working remotely than ever before, encouraging manual processes to shift to agile, tech-enabled workflows that can be completed from virtually anywhere.
Spurred in large part by the COVID-19 pandemic, this paradigm shift has shone the spotlight on workplace efficiency in nearly every industry, including legal. Whether you rely on alternative legal service providers (ALSPs) or online technology for contract review, moving this process online can help legal departments achieve sustainable cost and time reductions. Here’s everything you need to know.
Benefits of Transferring Your Contract Review Online
- Cost: Whether you choose to outsource the work to an online provider or make an in-house tech investment, contract review costs are reduced when done online. According to UpCounsel, in-person law firms typically charge 60% more than online reviewers due to the former’s overhead expenses.They pay to lease office space in a prominent part of town and to cover the cost of utilities, while most online contract reviewers work from home. When you take into consideration that implementing a contract review and negotiation solution in-house can reduce training costs by 99%, it’s worth the investment (not to mention the money saved owing to cycle time reductions).
- Time: Review times vary based on the type of agreement, but manually completing an initial review of a master service agreement, for example, can take days versus five minutes with legal automation technology. Many ALSPs have already implemented legal tech to expedite their reviews and take on more clients. “Compared to an attorney doing a full manual review of documents in a diligence context, using ‘legal tech’ can decrease the review time by as much as 40 to 60 percent,” says Smart Business.
- Consistency: Given the 17% turnover rate in the legal industry and the fact that 57% of lawyers leave their jobs by their fifth year, it can be difficult to retain dedicated contract reviewers in-house. There’s no guarantee your favorite ALSP will stay employed by your outsourced firm, of course, but the replacement and training is on them to maintain high standards of efficiency. In-house legal tech stays with the company, regardless of how many people come and go, ensuring uninterrupted and consistent review.
Online Contract Review Through ALSPs
ALSPs remain a highly popular choice for legal departments with the industry amounting to more than $14 billion globally. In 2021, 79% of law firms and 71% of corporate law departments surveyed by Thomson Reuters Institute said they were using ALSPs.
Leaning on ALSPs can certainly bridge gaps in efficiencies, however, it may not be the optimal strategy for every legal department. In addition to confidentiality and security concerns, the lack of transparency, consistency, and time to commit to relationship development can all lead to unsatisfactory results.
Online Contract Review With Artificial Intelligence (AI) and Automation
Increasingly, enterprises are investing in online legal technology based on AI and automation to augment their in-house processes. Once a contract draft is complete, it can be uploaded to a system that utilizes an AI Digital Playbook to consistently enforce standardized terms, best practices, and key negotiating positions directly in the document.
With technology that employs machine learning, systems can be trained to look for patterns of vague, inconsistent, incorrect, and omitted language. Risky sections can be flagged for more in-depth review, and users can input advanced “if/then” rules to automate changes and produce a system that effectively becomes smarter with each contract reviewed.
AI-powered systems also leverage natural language processing (NLP) technology to not only redline errors and omissions, but also offer intelligent, playbook-guided revision suggestions. These suggestions can then be implemented at the touch of a button or reviewed more closely by senior attorneys.
If you’re ready to take your contract review online, there’s no better time than now. LexCheck, the only true AI-powered contract review and negotiation solution of its kind, is already helping Fortune 500 companies around the world do exactly that. And the result? Faster deal closures and more productive contract transactions.
Gary Sangha | Founder & CEO
Gary Sangha is the Founder and CEO LexCheck. He's a serial entrepreneur and an academic. Gary previously founded Intelligize, a legal technology company that was acquired by LexisNexis. He's affiliated with the University of Pennsylvania and Stanford University and started his career as an attorney at Shearman & Sterling and White & Case.