Contracts are a necessity for every business - yet dealing with the contract process isn’t always a pleasant experience. Often the process is archaic, or involves the use of legacy systems that slow your business down.

But technology is transforming how challenger banks handle customer finances, how chatbots offer support before customers have even spoken to a human, how teams collaborate from anywhere in the world in this remote working environment … so why should legal teams be left behind?

Many legal (or legal operations) teams at high-velocity tech businesses are exploring contract automation software as a way to improve the process and keep up with the scaling demands of their company.

What is contract automation?

In a business, the people handling contracts aren’t just lawyers - people and talent teams send employment offer letters to candidates, and sales teams send non-disclosure agreements to customers, for example. Contract automation software allows legal teams to digitize legal documents. This enables teams to self-serve on contracts at scale, without needing legal involvement every time they want to send out a contract.

This is especially useful for high-growth businesses - as the company scales, so does the volume of contracts, and automating can help legal stay in control of the process, without slowing the business down or needing to hire ever more lawyers.

The contract lifecycle

From drafting a contract, to getting a signature, to storing and tracking the document, contract automation can help teams improve every stage of the process. Here’s each stage in detail, comparing the workflow before and after automation.

Contract creation

Without automation: Someone needs a contract, so they find an old Word version, copy and paste, and change the details to suit their needs. This can be time-consuming, but more pressingly, there’s an increased risk of human error - it’s easy to make mistakes around important details, like dates, prices, or addresses, that can slow the whole workflow down.

With automation: users can create templates in a matter of clicks. The template consists of a set of rules that are easy to follow, making sure that users know exactly which terms to edit, and how. A contract automation software with a Q&A workflow can make this even easier - by answering a series of simple questions, users can auto-populate the contract and reduce the risk of human error.

Negotiation

Contracts can sometimes impact several areas of a company - from finance to legal to procurement. So getting all these teams together to collaborate on a document can be tricky without automation in place, and this also extends to external negotiations with the counterparty.

Without automation: parties email a Word version of the contract back and forth. Collaborating on a complex document in particular can lead to lengthy email chains, and a lack of version control. It’s also difficult to maintain visibility on the contract, who has it, and the terms they are editing or suggesting - once it’s in a colleague’s inbox, for example, that work is siloed from the rest of the business.

With automation: modern software allows parties to negotiate on the same document - in a similar way to Google (News - Alert) Docs, but tailored with contracts in mind. A contract automation platform with approval workflows makes it easier for colleagues to specify the people that need to approve a document (such as legal) before it can be used in the first place. And with everyone in the same document, lack of visibility isn’t an issue.

Signature

Without automation: the traditional process still involves pen and paper, and in a world where printers and scanners are on their way out, this can be particularly painful. The teams involved may have to print a document, sign, and then scan it back as a PDF before it’s sent to the counterparty.

With automation: eSigning tools are changing the game, so you can now paste a scanned version of your signature into a contract, or draw your signature with the mouse. Most of these solutions integrate with your contract automation platform, but the best option is a platform that has native eSignature, so everything exists in a unified workspace. And this feature makes a huge difference - imagine discarding the entire print, sign, scan process and instead being able to sign a contract securely from your phone!

Tracking

Without automation: there’s a lot of lost data in Word documents, and obviously, no data whatsoever in a printed version. If the business’ contracts exist post-signature as files in a shared drive, on a personal desktop, or even as a piece of paper, shoved into the back of a filing cabinet, it’s near impossible to keep track of important information. And this is a huge missed opportunity.

With automation: contracts that consist of structured data don't face this problem. With plenty of data to action, teams can make better-informed decisions. Points like negotiations around the document, which clauses the counterparty changed, and how many people edited the contract, can help teams work more efficiently, and make a big difference.

Renewals

Without automation: unless the relationship is terminated before a deadline, contracts can auto-renew, and the business can incur a cost. This might not be a problem when teams are dealing with one or two contracts, but as the business scales, and that volume increases exponentially, it can be a real challenge to manage without an automated solution in place.

With automation: some automation platforms have notifications features, that send reminders to teams responsible around upcoming deadlines. This allows teams to stay ahead of their deadlines, without taking up too much of their time.

Making contracts more human

If contracts exist as copy-pasted versions of each other, then chances are a lawyer wrote the original document a while ago, and it hasn’t changed since. Faster signatures and better collaboration can positively impact the dynamic between parties - but if the contract is full of legalese and jargon-heavy terms, then there’s still a problem.

Luckily tech can also improve the content of legal documents - an editor gives teams the opportunity to revamp their contracts with the company logo, images, graphs, tables, and even GIFs. This, alongside easy to understand, friendly language, can make the whole process of dealing with contracts more enjoyable for everyone involved. Happier parties lead to faster signatures, which at a high-velocity business, is invaluable.

Richard Mabey is the CEO and co-founder of Juro.