In this chapter from our Transaction Management eBook, Richard Mabey, Co-founder and CEO at Juro, discusses how legal document formats might change in the future.
Businesses run on contracts. Yet the process involved in creating, negotiating, agreeing, storing, and tracking a contract leaves a lot to be desired.
With manual, legacy systems like Word and email, the workflow is painful for teams involved, and can result in missed opportunities and damaged relationships that have a real impact on your bottom line.
You’ve likely experienced this poor contract process in your time at a business – or at least, heard about the disadvantages of agreeing and managing contracts through these systems.
A manual, unscalable workflow
Typically, the process looks like this.
A user in the business emails a member of the legal team and asks for a contract. The lawyer redirects the user to a shared drive, where the user finds a template and manually changes the fields to suit their needs. This contract may not even be the most current version. They then email it to the legal team, who correct various details and send it back to the user to proceed.
Next, the counterparty receives the document. The redlining process takes place in Word – with tracked changes, which makes version control a severe problem. The document goes back and forth between the two parties, creating a lengthy email chain where, at any given moment, someone involved in the process has no visibility on who is editing the document.
Eventually, both parties sign, either with an e-signature tool, or worse, via a wet signature, with a nightmare process involving a printer and a scanner – most systems don’t have to hand anymore.
Needless to say, in a world of remote working, and legaltech solutions just a Google search way, the process for managing contracts needs an upgrade.
Small business, big problems
Particularly in a scaleup, this process can cause multiple issues, such as:
- Slowing down growth
Scaleups are laser-focused on growth – anything that hinders this, such as contract processes slowing down the closing of a deal, is a problem. Teams like sales and HR just want to get signatures on dotted lines, and legal teams need to ensure they align with the business priorities, instead of acting as blockers to these objectives with documents stuck in contract review. This is difficult to do, when you deal with contracts through such a clunky, time-consuming process.
- Burying legal under low-value work
The legal team doesn’t grow in proportion to the rest of the business – most legal teams at a scaleup consist of one or two lawyers for quite some time. This lean setup leads to the common phrase of lawyers having to “do more with less” and find ways around their ever-growing workload. But a manual, painful contract process can bury lawyers under low-value work, and make it challenging to dedicate time towards the tasks that really matter.
Other teams, such as HR, marketing or finance, automate their processes to save time. Legal being late to innovate can cause friction with other teams which are used to a digitised way of working.
The legal industry is making the effort to change their ways of working and enable other teams in the business to succeed, but it has been slow progress, given the reluctance to innovate sooner. However, certain influences have meant that this change is picking up its pace.
With the sudden transition to remote working, legal teams realised that their old ways of handling contracts weren’t going to work anymore. The pandemic, and all the lockdowns that ensued, seemed to force legal to innovate faster than any lawyer anticipated. And now, with work life slowly returning to some semblance of normal, lawyers have discovered the potential behind automating the workflow.
The future of legal documents
Some lawyers may not want to leave Word behind, but the future of legal documents should be in a unified workspace, rich in data, and entirely scalable. With so many contract automation vendors out there, it’s evident that there's a growing appetite for a new contract process – one that has several of the following features and traits.
- Entirely in-browser: Instead of relying on Word, email, PDF, and an e-signature tool to complete the end-to-end process of a single contract, teams can understand the appeal of shifting the entire workflow in-browser; so they can create, negotiate, sign, store and track contracts without ever leaving the browser.
- Data-rich: Contract management platforms help users handle offline files. But static files in Word and PDF don’t offer legal teams the numbers they need to understand how their business processes legal documents. And at high-velocity scaleups, where numbers are key to influencing change and getting buy-in, this information is essential. Instead, lawyers are turning to a solution that allows them to create dynamic files and track the data within them.
- Scalable: Some lawyers may have, in the past, been burned by a legal tech solution that promised to address their needs… and instead, added to the problem as the business continued to ramp up growth. The focus is, and arguably will always be, on a robust platform that legal can confidently implement, so other teams can continue to self-serve – no matter how fast the business scales.
In a world growing more and more digitised, there’s no need for legal to be left behind. Contracts are one of the most common touchpoints in a business – and with document formats becoming more simplified, efficient, and scalable, legal can leave a positive impression on counterparties and clients, enabling them to add value to the business.
This is a chapter from our eBook Transaction Management: Is technology taking over the deal? You can read more insights from legal industry voices on the role technology is playing in the transaction management lifecycle in the book. Download the eBook today.