The contract review process is a necessary procedure in business today. Whether your company performs contract reviews manually or utilizes a contract lifecycle management solution, you’re investing considerable time and money to ensure the optimal value across your business relationships.
All-in-one contract lifecycle management solutions seem like the most logical starting point, but after a few years, teams ask, “Where’s the ROI?” Built-in complexities and organizational difficulties often stand in the way of progress. As a result, many executives have become disillusioned with legal tech.
However, there is a middle ground. While you continue the uphill march toward progress with your CLM, there is a way to implement tech efficiently, streamline your contract review process, and demonstrate the value of your investment in legal tech.
Contract Language Impacts Your Bottom Line
You don’t need to look far to see how unfavorable or missing clauses in a contract—like scope, intellectual property definitions, or listing all the parties—can have extensive ramifications. A number of other clauses—including confidentiality, force majeure, and dispute resolution—can open companies to liability without strategy and due diligence built into your reviews.
When investing time and money on multi-level contract review and negotiation, you need visibility into the process—and the right tools to accomplish the job.
Signs It’s Time for a New Contract Management Solution
You knew you needed to upgrade from slow and disparate manual processes. You researched, watched demos, read case studies, evaluated, and made a decision. But the rollout wasn’t what you imagined. You felt you weren’t getting the necessary vendor support and that the team could not use the full array of complex features.
In theory, a comprehensive contract management solution offers many benefits:
- Staying on top of contract renewals, expirations, and renegotiating processes
- Tracking vendors to prevent overlapping services or overpaying
- Capturing analytics that identify bottlenecks and areas for improvement
- Oversight and flexibility to implement sudden changes in response to crisis
But in their complexity, contract lifecycle solutions can take years to achieve ROI. It takes time (and continual training) to align sales, finance, IT, business, and legal teams around new goals related to contract management data.
And contract management systems are not designed to do everything. While you gain an insightful bird’s-eye-view of your contract as it moves from draft through execution, your team will likely need more robust support in the most critical areas of the contract lifecycle, such as contract review.
Many industries have 90% or more of their annual revenue locked into contracts. As a result, significant resources go to reviewing contracts for strategic positioning, competitiveness, risk management, and maximum value. But companies stand to lose an average of 9-15% of their annual revenue on poor contract management, so focusing your attention on this part of the contract lifecycle makes good business sense.
Time Is Money—And LexCheck Can Save You Both
LexCheck is a pre-execution solution that can integrate seamlessly with larger contract lifecycle management systems to automate redlining and review processes. Typically, a junior associate would spend hours, if not days, meticulously combing through a legal document and comparing its language to templates, corporate legal playbooks, best practice guidelines, and past agreements. From there, the draft could escalate to senior legal counsel for another level of oversight.
By contrast, LexCheck uses artificial intelligence and machine learning to redline, color code for risk analysis, and add contextual review notes in just five minutes. Once the markup is complete, your team can determine how much attention is required, who should handle next-level rework, and see precisely where to focus the revisions.
Corporate legal departments have experienced significant improvements out-of-the-box, including:
- 99% reduction in playbook training costs
- 90% reduction in time spent reviewing contracts
- 33% reduction in total time to execution
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.