Requirements You Should Have When Choosing Contract Analysis Software

By Samantha Wargo

requirements-contract-analysis

Your contract analysis and due diligence solution is where your greatest source of potential efficiency (and risk mitigation) lies. By helping you analyze the contents of your contracts in an accurate, automated fashion -- literally, reducing or eliminating the need to read and reread executed agreements -- you can cut out a significant portion of the "grunt work" for your in-house legal staff. But to do so, the solution needs some key components. 

Requirement #1: Artificially Intelligent Contract Parsing

Your due diligence and contract analysis solution should be able to identify the type of contract (lease agreement, sales contract, privacy policy, etc.) as well as the major component clauses of that contract (payment terms, assignment clauses, governing law) and key individual values (included parties, execution dates, automatic renewal terms and dates). By extracting these key data points, you can expedite due diligence and minimize manual contract review. 

Requirement #2: with Task Management Systems 

When you can automatically identify the type of contract (like a client services agreement), the parties of a contract (like who the client is) and the actionable clauses of a contract (like when the client has the option to cancel or renew), you can use that data to drive tasks in non-legal workflows (like cuing the client management team to ensure a customer is happy enough to review). Your due diligence solution should integrate with systems like Salesforce, Wrike, or similar task managers to help legal data automatically "advise" the rest of the organization. 

Requirement #3: Provide Data for Risk Management

Your contract due diligence solution should be able to track commonalities and differences between agreements, so that you can automatically tabulate, for example, how many contracts are in effect that contain your old payments terms, or which of your agreements are subject to which governing jurisdictions. By parsing these items at the speed and scale of software, your legal team can build a near real-time model of your overall contract risk, without the need to constantly tabulate data in an Excel spreadsheet or similar ad hoc tool.

Most if not all in-house legal teams are created to save money, either by directly limiting outsourced legal costs, or indirectly by helping the organization avoid unnecessary liabilities. The latter is achieved by being good legal professionals. The former is achieved by being efficient legal professionals -- and modern efficiency requires modern software. More simply, if bringing lawyers, paralegals, and legal support staff in-house isn't significantly cheaper than simply retaining outside counsel, your company won't keep doing it. Fortunately, with a suite of legal software solutions optimized for efficiency rather than billable hours, corporate counsels can deliver as good or better legal advice or far less cost than by hiring an outside firm.

If you're ready to start building the best possible contract management software suite for your business -- and escape the trap of billable-hours applications -- contact LinkSquares today.

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