One of the most time-consuming tasks that falls on the desks of in-house legal counsel is the management of contracts, old and new. As such, a growing number of in-house legal departments are embracing contract management software and adopting new approaches to streamline the process.
And while there’s absolutely no chance that contract management will become fully automated (well, not any time soon), there is the hope that it will become quicker, easier and…dare we say…more enjoyable?
We highlight seven key contract management trends every in-house lawyer should watch during 2022:
There’s a long-standing debate amongst legal counsel and their law firms over the standardisation of contracts. In-house teams would benefit greatly from standardised templates for relatively straight-forward contracts such as confidentiality agreements – the manual drafting of individual contracts drains the legal budget and exposes the business to risk and human error. Law firms, however, are understandably opposed to the notion – it is their bread and butter, after all.
This year we expect to see another wave of in-house legal departments adopting contract management software to significantly cut both the costs and risks of manual contract creation. These tools often come with contract templates, standard clause banks, as well as commercial contract law notes. They may not be nationally or internationally standardised contracts that so many in-house teams are looking for, but they’re the next best thing.
Any tool that enables the busy legal counsel to draft effective, legally watertight deeds and documents is increasingly in demand, with time and budgets under greater pressures than ever. In fact, according to a survey by DocuSign, 68% of legal departments said “digitising manual processes” is a top priority.
Legal drafting solutions that work within the Microsoft environment are highly sought after for in-house legal departments, as they allow you to build legal documents at pace without switching from platform to platform. Lexis Create is one of the best drafting tools on the market, allowing users to easily check for errors, inconsistencies and citation anomalies whilst pulling information from its legal guidance and legal research tools.
One trend becoming increasingly commonplace across all businesses – but especially amongst younger brands or brands who want to position themselves as disruptors – is the adoption of more relaxed terms and conditions. Traditionally, larger companies could strong-arm bidding partners by sharing their standard terms and conditions in a ‘take it or leave it’ style. However, a new wave of brands wanting to demonstrate collaboration with their customers are keen to have their terms and conditions displayed in a slightly more balanced and jargon-free manner. This approach is also being adopted because it allows businesses to remove the constant back and forth during the sales process.
In 2019 the Law Commission confirmed that electronic signatures are legally valid for most types of commercial transactions. Post-covid-19, tech has driven flexible working practices and commercial operations, prompting a surge in demand for legally-binding but risk-free electronic signatures to save time and effort.
One e-signature solution to watch is the qualified electronic signature (QES), which uses independent face-to-face electronic identity checks, eliminating the risks associated with e-signatures. QES is also convenient as the signing parties (and witnesses, if required) can be in different locations. Importantly, confidentiality is also maintained.
The General Data Protection Regulation (GDPR) provides the crucial framework for data protection, but if the Data Reform Bill comes into force, businesses will find it easier to use the data they hold to their advantage. The UUֱ Data Protection Toolkit is particularly popular with in-house teams as it brings together key guidance on the legal and practical implications of GDPR.
That said, compliance with data privacy rules will remain crucial to protect client and customer data and cut the risk of reputational damage to the business. The sophisticated redaction capabilities within the Lexis Create solution, for example, allows you to remove any risk of displaying personal or confidential information once your contracts are created.
Robust compliance with data privacy rules is possible with the support of advanced AI, such as a cloud-based contract repository and the use of reliable digital identification and e-signature processes. Concerned about the sensitive commercial data you hold? Even your sensitive data can now be identified by advanced contracts management systems.
Managing legal and compliance risks is an inherent responsibility of the in-house lawyer. Covid-19 exposed flaws in many business continuity plans, with contract workflows interrupted while businesses had to quickly change or adapt existing processes to minimise business disruption.
On the bright side, this has prompted greater awareness among contract managers and legal counsel of the need to implement a robust business continuity strategy. The best approach is multi-pronged, and using end-to-end contract management software may well prove the key to achieving an effective crisis management strategy.
The UUֱ guide on contract management risk management offers reliable and comprehensive advice on how and why you need to manage these risks. The guide is a rich resource intended to steer you through the set-up contract management process right through to renewals, contract assignments and transfer.
Europe’s summer of 2022 has underscored the urgency for businesses to make a concerted effort in cutting CO2 emissions. The most obvious reason to act now and switch to automated contract management software and streamline your contract processes is to eliminate further reliance on paper-based processes.
Manual attempts to identify contracts and clauses that are not climate-friendly pose a further challenge (especially if you’re still paper-based). The latest contract management AI is environmentally-aware, built to take into account the latest climate change rules and regulations, allowing contract managers to address any environmental issues identified and make climate-friendly changes.
Visit the UUֱ climate change - emissions targets, carbon budgets and net zero practice note.
The growth in demand for legal technology that assists with contract management and related processes reflect the increased commercial challenges facing in-house legal counsel. Legal budgets will continue to be squeezed, at least in the short-term, but general counsel are nonetheless expected to continue delivering value for money, in a legally compliant way and on time.
Not currently a subscriber to UUֱ? Our practical guidance provides an unparalleled range of contract resources for in-house legal teams, from practical checklists to example precedent clauses and practice notes, ready for you to use. Fill in the form below to start your free 7-day trial today.
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