Redlining is Painful



by ContractRoom

businessman in painCollaborative editing tools for agreements/contracts (also, referred to as “redlining”) have been used for decades by contract negotiators (both attorneys and business people). The question is, are the current tools really suitable? Redlining has all the appearances of a wonderful collaboration tool, letting people see exactly what changes the other party is proposing and accepting or rejecting them. Therefore, on the surface, the answer may be, “Yes”. However, looks can be deceiving… and after reading on, you’ll probably quickly change your answer to, “No Way”.

Let’s be honest, word processors, such as Microsoft Word are truly consumer applications, and simply not well suited to handling multi user, high volume text changes. While redlining doesn’t seem difficult, doing it wrong and without the proper user controls, the business contracting process can be significantly stalled and/or flawed. What’s more, it can create unnecessary friction among negotiators, and even lead to one of the parties mistakenly signing off some edited legal text. The truth is that most people hate redlining, but have no other viable option. They’re stuck with a tool intended for a single user or maybe two that in many ways prolongs the negotiation and creates confusion along the way – that’s not “happy contracting”.

Redlining is unhappy

There are four primary ways in which redlining slows the contracting process.

  1. People creating a redline on top of a redline, and that creates confusing documents. Redlining works best when it’s two-dimensional: when you’re comparing two versions (or edits by 2 users) of a agreement/contract. Comparing three versions—comparing the current version to the last one and the one before that—creates a document too complicated to review. Of course, the problem is only compounded when there are 3 or more editors! Yes, you might try and simplify a “triple redline” by assigning different colors to different versions, but that rarely leads to a legible comparison.
  1. It’s easy to reject or delete comments without leaving a trace in the redline document. You’d be surprised how often another party sends us a redline that doesn’t even match their clean For instance, recently our proposed indemnity clause was deleted from both the clean copy and the redline—the deletion didn’t have a strike-through in the redline; it simply wasn’t there. So, if I had just reviewed underlined additions and strike-through deletions—which is the whole time-saving point of a redline—I wouldn’t have noticed the change. This happens all too frequently. In almost every case, the problem results from carelessness rather than intentional deceit. But does it really matter either way; if in the end, you sign off on the wrong terms.
  1. People rely on track changes rather than a clean document. Microsoft Word is the most commonly used tool, and the “Track Changes” feature allows for “redlining” as you revise a document/contract. This feature can be helpful in many simple situations; for example, when there are just 2 editors and the document is only a few pages in length. Unfortunately, business contract negotiations generally involve multiple editors and versions, and the documents are generally quite lengthy. “Track Changes” is great for consumer use in which you’re marking up a homework assignment or short essay; it simply isn’t suitable for critical business-to-business (B2B) negotiations. But, understandably, that has been the only viable option – so, here we are, with a tool that doesn’t create a clean version of the contract, and can get screwed up if you’re reworking the same language over and over.
  1. Negotiators, attorneys and business people alike, have to constantly read through the whole document. How ridiculous is that you have to read through an entire document every time a change is made to ensure that you’ve caught any changes to the legal text? Seriously, this is incredible inefficient and ineffective process. Wouldn’t it make a lot more sense to have a document broken down into sections or clauses that could be divvied up based on whether it is negotiable or not; or whether you want to direct content to different reviewers/negotiators; or you only want a counterparty to edit some sections and comment on others. Unfortunately, none of this is doable with today’s consumer-oriented editors.

Happy Editing and Contracting

While redlining has the appearance of facilitating B2B negotiations for buyers and sellers, you can see that it really isn’t up to the task. In fact, it may even cause unnecessary tensions—not something anybody wants when they’re working a deal towards a “happy ending”.

So, is happy editing and contracting a possibility? You bet! We created ContractRoom to make the process easy and powerful. With multiple editing options available per document or even per transaction, our innovative, enterprise-grade approach to collaborative authoring allows for editing, commenting, sectioning and much much more. And with real-time document revisions, it is easy to hammer out the details without any missed communications (and you can search the history of every change real-time). Wouldn’t that be refreshing?

See for yourself how you can bring happy contracting into all your business transactions by clicking here to schedule a free, live demo: Let's Talk


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