How contract lifecycle management software can help reduce risks in negotiation!
Four principal risks faced when engaging in large-scale negotiations are:
- Losing time by spending too much of it on negotiations instead of on more lucrative business pursuits;
- Not reaching an agreement or not reaching a satisfactory agreement in a time and resource efficient way;
- The other party not delivering what they have promised; and
- Being sued for non-performance of your side’s part of the bargain.
Although it is impossible to control every aspect of the contract management process there are several steps you can take to reduce these risks using contract lifecycle management software.
- Reducing the amount of lost time on negotiations
Contract management software can minimize the amount of time spent in negotiations.
Firstly, contract software can be used to minimize time spent searching for appropriate templates. Having all templates and clauses in one place and information derived from analysis of past data to inform you about which of these are the most effective not only saves time in drafting but also in negotiation.
Secondly, contracting software that allows for multiparty simultaneous drafting and also isolating individual sections for review can be used to minimize the amount of time spent redlining as well as locking down clauses that shouldn’t be edited directly in the first place.
Thirdly, contract lifecycle management software reduces time spent in the signing process. A product with an embedded e-Signature will allow those required to sign the agreement to do so securely from wherever they are in the world. Better yet, some systems employ dual-factor authentication for better authentication and more security.
- Reducing the risks of not reaching an agreement or not reaching a satisfactory agreement
By analyzing past contract data, you may also be able to reduce the risk of not reaching an agreement or a satisfactory one. Insights into the likely behaviour of a counterparty can be leveraged to automatically design your negotiation plan and execution so you are more likely to reach a suitable agreement as well as reduce the processing time 10 fold.
- Reducing the risk of the other party delivering on what they have promised
Although it’s impossible to control the actions of a counterparty there are some contract software features that provide ‘peace of mind’ for this. Should a dispute arise you may need easy access to all documents relevant to the contract such as drafts and discussions about what was agreed. A good contract lifecycle management system stores all this material digitally in the one place so you won’t have to search through numerous emails and document versions so as to locate a material point or worse fail to locate a critical document. You should be able to easily and deeply search all the indexed metadata on the fly. This gives you more control over your ability to enforce your position.
- Reducing the risk of being sued for non-performance of your side’s part of the bargain
A modern contract lifecycle management system should automatically convert contractual obligations into tasks and milestones with no need for multiple manual keyins. Such a system should also provide a function for designing document and individual workflow (for sophisticated approval routing). This ensures all parties with responsibilities under the contract can easily visualize the entire process for obligation delivery. These features make it easier to ensure no key deliverables are missed and mistakes do not occur - accuracy needn’t be at a premium!
If you are unlucky and you are sued for a breach all material including drafts and discussions about the formation of the contract should be available at your fingertips, and you should be able to place and instantaneous “legal hold” are all the relevant data. For most companies, far too much time is spent in dispute resolution or litigation due to the difficulty in retrieving related information. Also, because all of the important discussions are captured with your counterparties and are easily accessible, there is less chance a dispute will arise in the first place due to early detection/alerting of contract commitment issues, and more likely that if a dispute does arise it can be resolved quickly.
What are your strategies for reducing risks in large-scale multi-party negotiations?
ContractRoom can do all the above and much more… that’s why it’s the home of #HappyContracting - visit www.contractroom.com to find out more on how you too can ‘negotiate less, agree more’ or click here for a free, live demo: