How the new wave of contract management software is reducing time spent negotiating
Is it possible to use data analytics and clause standards to make the contract negotiation process more efficient? Certainly there are situations where standard contracts are routinely used and it’s undeniable that this saves time and money. For example, imagine how much longer standard real-estate processes would take if each time an agreement had to be drafted by scratch.
However, there are also many situations where individual situations call for the drafting of a unique agreement. Lawyers may argue that by nature the art of drafting contracts is so complex that it would be nearly impossible to use any form of analytics to assist in the process. But the new wave of contract drafting software and contract management software (this also could be called collaboration software) is seeking to defy that argument.
Kingsley Martin of KMStandards (publisher of ContractStandards) suggests there are three main metrics that define the success of a contract negotiation process. All of these metrics overlap to some degree. These are:
- Quality is defined by such things as how well it achieves its purpose, how much consideration it generates over time, its completeness and accuracy;
- Cost is the cost of the negotiation and administration including all expenses related to litigation and disputes; and
- Time spent on negotiations, administration of the contract including the time required to handle litigation or disputes.
Newer technology is seeking to help optimize all three of these aspects of the contract management process by measuring metrics on contracts for various purposes. An analysis of this data could lead a system to automatically produce contracts with optimized terms - i.e., the terms in the past that have required the least amount of time to negotiate. It could even predict what agreement parties will arrive at for the sale or purchase of a product and/or service. This new technology will stop redlining in its tracks!
What are your thoughts? Do you believe that standard contract language can help reduce unnecessary negotiation? Can you think of any other ways technology could work towards optimizing the contract management process?
ContractRoom is stopping redlining and is the home of #HappyContracting – making the world more agreeable one happy contract at a time. Negotiate less, Agree More!