Brad Blickstein of the Blickstein Group recently penned an article for Corporate Counsel that explores how data and analytics can potentially be used to reduce and perhaps even eliminate legal spend. Rather than simply focusing on metrics around spending, says Blickstein, companies should identify specific data points to help avoid disputes and other legal issues.
For example, while certain contract disputes are the result of business disagreements that evolve over time, many are actually caused by poor drafting practices.
“Contractual rights and responsibilities should be clear to all parties and contractual language should leave as little wiggle room as possible,” he explained. “Study data to see if certain templates are resulting in more disputes than expected, or if more problems are resulting from specific clauses. Tightening up contract language may be all that is necessary for avoiding some disputes.”
Indeed, the contractual drafting process is a particularly salient pain-point for the legal industry. Although office applications such as Microsoft Word and Google Docs have brought us into the digital age, contract negotiations are still woefully behind the times. While individual templates can be altered to avoid basic misunderstandings, the contract negotiation process is clearly long overdue for a comprehensive revamp.
To be sure, without a holistic, integrative approach, parties have little choice but to negotiate over email in disparate threads, all while attempting to decipher an overwhelming tsunami of confusing track changes from multiple participants. Perhaps not surprisingly, this anachronistic paradigm typically results in an enormous amount of error-prone and manual clerical work. In turn, this contributes to an overall lack of efficiency, the risk of non-compliance, frequent misunderstandings between parties, extended negotiation cycles, canceled deals and wasted or even lost revenue.
One potential way of improving contractual drafting is to move the entire process into the cloud – which will help legal firms and department optimize efficiency, visibility and process control. This model eschews the disparate approach so endemic to the majority of contract negotiations. Complex, never-ending email threads and confusing track changes are replaced by a single integrated, intuitive user interface (UI) that allows companies to expedite agreement on the very same platform, document and iteration in real time.
More specifically, negotiation points, comments, concerns and proposed changes can be neutrally formulated in a coherent manner, with follow-up actions encouraged by interactive discussion. Gone are the indecipherable notes and easily misconstrued red lines. With a cloud-based, integrative platform, open discussions can be facilitated across every section of a contract. This allows parties to focus their attention on resolving key issues and end the ubiquitous cycle of redline revisions that are often hurriedly jotted down over a simple misinterpretation.
Moving the contractual drafting process into the cloud also enables real-time access to comprehensive analytics via interactive dashboards. The intuitive display of current status and key performance indicators allows organizations to make data-driven decisions and significantly improve the negotiation process. Moreover, specific users roles can be assigned, critical milestones precisely tracked and current contract status highlighted.
Interested in reading more about leveraging data to reduce costs, identify issues and improve decision making? The full text of “Gaining the Power of Metrics Means Looking At More than Just Legal Spend” by Brad Blickstein is available on Corporate Counsel here.