10 minute read
Fourteen Contract Management Processes That Are Shameful
by AXDRAFT
Habits are very powerful. It takes 21 days to form one, and a lifetime to get rid of it. Habits can help us maintain strong mental health, lead us towards becoming successful lawyers, and live a healthy, happy life.
Or else, they can make you really miserable without you even realizing it.
There are still things lawyers do with contracts that honestly should not be done anymore.
Just like there are good habits, there are ones that can be frowned upon, and even call for an intervention. No, no. We’re not talking about a passion for junk food, or binge watching ‘Suits’ in search of a solution for your current case.
In 2021, when humans and machines work together on making this world a better place for lawyers, and the role of AI in legal is unquestionable, there are still things lawyers do with contracts that honestly should not be done in 2021.
Below is a list of contract management processes that might have worked before, but are not as cool and effective anymore:
Store contracts in file cabinets, across offices, states, and countries
The first one is a big hit. Do the math with us: • One four-drawer file cabinet costs $25K to fill in with contracts, and about $2K to maintain annually • A standard Amazon cloud storage package costs $0.026/Gigabyte/month. That’s $0.026/month for storing 10,000 document pages. No matter how secure and comfortable cloud solutions get, legal is sticking to a millenia-old tradition of storing manuscripts in a dry cool place, away from direct sunlight and children.
Document drafting based on old templates from legal, or new ones from the internet
“The template worked 5 years ago, and it will work today” says a lawyer that neglected to check compliance with new legislation. The main point of always updating your templates is not only to save time drafting a new contract, but to give your company an advantage before contract negotiations start. Companies may change directions in terms of strategy, even change a legal address or payment details. The contract template must stay in-line with all the changes, or you may risk bringing it down with one bad contract.
Remember: it is much easier to draft a fresh template then mitigate the risks caused by a contract that ‘worked 5 years ago’.
Fly around to get a contract signed
Don’t you love flying on airplanes? You get to meet people, push your way through to the client’s big boss, and fly back home. All for the sake of an autograph on a contract. Exactly what a lawyer should do instead of focusing on company strategy and advising the board. While some companies send lawyers on business trips via first class to get a contract signed, others discovered that it is much easier to invite their partner into contract management software to eSign it. Good news for lawyers that don’t like flying.
Negotiate contracts via email
A pigeon would have been a safer way to not lose a contract or mix up the redlines and versions. A faster way as well, to be honest, if your email falls into the Spam or Promotions
folder. But, there’s a better option—collaborate on your contracts as you would in Google Docs. Technology already allows you to work on a contract together simultaneously, as if you were sitting in one negotiation room. No matter how formal the email conversion may look, it has long since become inefficient.
Approve the same contract more than once
Deja vu is a commonplace feeling for lawyers that don’t have approval flows set up. It almost seems that you’ve just approved that very same contract yesterday. But something’s different, and you can’t figure out what.
Why not look at the contract once and move on to the next task? Today’s technology allows you to get notified when it’s your turn to approve the contract. You can even see the history of changes and the list of document versions, approve clauses and leave comments. When you’re done with the contract, pass it on to the next in line.
Proofread after Junior Associates/Paralegal
An average lawyer spends up to 10 hours a week proofreading contracts, and most of that time is not billable. Unfortunately, you can’t get junior associates with experience straight out of Law School. But what you can do is show them the software that’s already trained to never make an error, and let them draft mistake-free contracts based on your legal templates.
Follow up on counter-parties via phone
Phone calls are already giving way to online messaging. Lawyers, however, still love to hit the dial buttons as part of their contract management process, and be as polite as possible. ‘Please, look at clause 2’, ‘Have you seen my comments to your comments?’, ‘Please eSign the contract asap’ are just some of the phrases from a follow-up phone conversation. It doesn’t really suit a lawyer to do such things.
Today, you can send a 1-click notification and the responsible party will get your request straightaway. Of course, you can click the ‘Send’ button 5-6 times to highlight importance and urgency.
Use paper stickers to highlight the important clauses and places to sign.
A paper contract can resemble a rainbow sometimes, if looked at from the side. A multitude of colors sticking out between the sheets is there for a reason. Yellow for the CEO to sign, orange for Accounting to check the details, green for sales to note the delivery terms, etc.
A paper contract can look like a rainbow sometimes, if looked at from the side.
Just don’t mix them up, or there will be trouble. What you can also do is assign specific roles to each contract and clause with the help of document workflow automation. No one will be able to see what they see, and put payment details onto the delivery terms, or something like that.
Set up alarms for deadline reminders
Wake up, Neo. No, you’re not in the matrix. You just have a contract submission deadline and now you have to run. Remember setting the alarm for 10 minutes before the deadline is over? Good job!
If only there were a dashboard where Neo could see all the contracts with all the deadlines, Neo could plan ahead and not have to rush with the annoying alarm sound still playing on the outskirts of his mind.
Send an email to the entire team regarding the new template
Emails don’t always find us at the right time. Heck, they don’t always find us at all. Still, people feel like sticking to the ‘businessness’ of the email is the right way to share and delegate vital information. Such as updates to the contract templates. If you ever took part in drafting an email like that, you know the pain of the consequences, when people start getting back to you to clarify. It all starts just like any email conversation:
“Dear all,
I hope my email finds you well.
I am happy to inform you that, from today on, our company will be using a new NDA template.
You can find the updated template in the attachment.
If you have any questions regarding the new template, feel free to reach back to me, I will happily answer all of your questions.
P.S. Not really sure if all of you receive the email, or see it in time before signing another contract, please pass on to your colleagues the information about the updated NDA template.
P.PS. I am finishing the first draft of the new master service agreement, and expect to notify you all about another updated template by the end of this week.” To avoid such emails and pointless, annoying conversations that follow, it is nice to use a centralized contract repository that will include only the latest template versions, or simply update every template automatically with the help of proper software.
Get to your desktop to review or approve the contract
Phones today are big and smart enough to play games, watch movies, read books, and even work. Still, some lawyers feel that a contract management process is too important to manage from their phone. There are people who find all the Marvel easter eggs in ‘Infinity War’ by watching the movie once on a 5-inch display.
As long as you have internet access and a phone, you don’t have to come back to the office and see a pile of documents in the ‘review’ folder along with a bunch of emails with ‘Pls approve’ subject lines. Manage your contracts on the go, you’ll quickly find this practice efficient and productive.
Sign a contract twice with the same company
A non-disclosure agreement is a document that lets you share important company information with counterparties. Having several hundreds of such documents (stored across multiple cabinets, of course), it can become difficult to recall if you actually have an NDA signed with someone.
So, when your sales rep storms into your office to find out if they can share a SOC 2 report with all the sensitive information about the company’s security, what do you do? Sign another document with them, of course.
It can become difficult to recall if you actually have an NDA signed with someone.
You can spend hours looking for a signed copy, send an email to the counter-party, or get into your document workflow automation software and find everyone you have NDAs in place with, using a metadata-based search. What will you choose?
Write contracts that can only be understood by lawyers
A lawyer might not notice that, but the language of their contracts can give people a migraine. Asking for clarification can result in instant fatality, because sometimes, the explanation of the clause in verbal legal language is even more confusing than just reading it.
Luckily for the non-legal people, there’s technology that transforms complex language into something that a ninth grader can understand. It’s called GPT-3, and there’s document automation software that uses it for their templates.
Copy and paste client details
We think that the Ctrl+C/Ctrl+V combo is one of the best inventions ever made in human history. Or was, right until all the integrations became possible, and now all you need is a CRM, a document automation software, and the ‘Magic’ button that transfers all the important data directly into your contracts. Without you having to even touch your keyboard.
Conclusion
While we grow up, we develop skills and habits that go along with us during our lives. While some can be good and helpful for years, others should be changed when it’s time to change them.
Lawyers had an amazing era where the contract management process was all on paper. That lasted several thousand years. Then it was a century of phone calls and a couple decades of emails. Today, with document automation software, all of this becomes unnecessary, expensive, and ineffective.
More so, these habits can act as blockers to your growth, cause an increase of stress and overwork, and make you start getting impostor thoughts about not being good enough. n
This article was provided by AXDRAFT. AXDRAFT is a document automation software that liberates legal and business teams of routine drafting work, unravels the true value of a legal department, and helps companies grow, scale, and thrive. Learn more at www.axdraft.com.
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