Why Contract Automation is the Future of Legal

American educator Steven Covey said, “The key is not to prioritize what’s on your schedule, but to schedule your priorities.” Few understand this concept better than in-house legal counsel who seemingly never have enough hours in the day to accomplish time-sensitive tasks. That’s especially true when it comes to thousands of pages of documents that require manual review and extreme attention to detail.

Traditionally, businesses have looked at legal departments as cost centers or bottlenecks. But all of that is changing with the introduction of contract automation tools which not only save legal teams time via improved process efficiency, but also free up legal counsel to engage in value-adding, profit-generating work. Here’s a look at the challenges that modern legal departments face, and how contract automation can help.

In-House Legal Teams Are Overburdened

Study after study affirms the struggles that in-house legal teams face:

• A recent Bloomberg Law survey found that in-house lawyers 8+ years into their careers work more than 50 hours per week and experience burnout over a third of the time.
  
  
• A June 2020 Associate of Corporate Counsel flash poll found that 53% of in-house lawyers worked more hours after the Covid-19 pandemic hit, even though many worked remotely at home. Many corporate lawyers said they had trouble sleeping and relaxing. As a result, 74% were experiencing moderate to very high levels of burnout.
  
  
• Despite increasing stressors and workloads, 88% of general counsel planned budget cuts in 2021, according to EY Law and the Harvard Law School Center on the Legal Profession. Even though 59% of general counsel say legal technology could help them reduce costs, 97% find it difficult to gain C-suite buy-in to pay for the needed upgrades.

Workload Bottlenecks: What the Numbers Say

While in-house counsel engages in various activities to provide relevant legal assistance for their employers, contract management is a sensible area to begin making processes more efficient. Why? Because 68% of legal departments have cited contract management as the key contributor to strategic business growth. 

Consequently, it’s also an area that takes up the most amount of time. In fact, Gartner found that 40% of contract review teams admit their tasks “take up more time than is appropriate,” which translates to 1.3x longer contract review cycles and the equivalent of three full-time employee salaries’ worth of wasted work every year. 

Time is valuable, especially when senior-level attorneys could be reviewing contract performance metrics and the company’s legal positioning rather than getting bogged down by low-level manual contract review and overseeing the work of junior-level staff members.

The Solution? Contract Automation

When possible, implementing contract automation is a logical choice. A contract automation solution can condense weeks of work into mere minutes, enabling legal teams to focus on more pressing matters and businesses to function without unnecessary delays. 

The best automated contract solutions reduce workloads by:

• Taking the first pass at reviewing a contract (in lieu of junior-level associates)
  
  
• Fully redlining or risk-analyzing an uploaded contract draft within five minutes via Artificial Intelligence (AI)
  
  
• Creating an AI Digital Playbook to ensure constant adherence to contracting and negotiation best practices at scale
  
  
• Providing context-based suggestions during the contract automation review process 
  
  
• Letting users implement necessary changes at the click of a button
  
  
• Letting users input custom “if/then” rules to auto-correct common changes and further streamline the review process

Patrick Krill, founder and principal of legal well-being firm Krill Strategies, explains legal tech investments this way: “It’s a battle worth fighting, in my view, because the downstream effects of having more adequate staffing or just having the resources that you need is ultimately going to improve work product, it’s ultimately going to reduce unwanted turnover, it’s going to reduce healthcare spend on mental health or behavioral health benefits.” And with innovative contract automation solutions like LexCheck already hitting the market, the future of legal is indeed now.