Seven tips for streamlining contract creation and review
No matter how many contracts you’ve drafted or negotiated, they never get simple. But these seven tips can help you and your department standardize your process to save time and effort.
1. Use templates
Although contracts can still vary depending upon the needs of the individual company, there are ways to create effective templates, especially in high volume situations. With some extra time invested upfront to determine common clauses, company-specific terms and the like to create those templates, in the long run, much time will be saved, and consistency better maintained.
2. Internal contracts work well as templates
Generally speaking, the contracts most usually templated are internal contracts since they are most likely to be routinely used by the company, are company-specific and frequently composed of terms the company has used for years.
3. The complexity of the template directly correlates with the complexity of the company or industry
For example, an insurance or technology company may have more complex (and lengthier) contracts than an advertising or media company.
4. Common contract types that are templated
Within the universe of all internal contracts, there are certain contract types that are more likely than not to be templated. They include employment and non-disclosure agreements, as they are typically used more frequently than other contract types.
5. Improve consistency and increase efficiency with playbooks
Although some contracts like sales agreements require negotiation, the company will have a certain range of negotiating positions and, over time, a pattern emerges of other parties’ comments. To help maintain consistency across these contracts and improve efficiency in their drafting—especially if it’s a lengthy and time-consuming process to create them—it’s helpful to document these positions and comments by creating a playbook. This playbook usually includes descriptions of negotiation patterns, highly-contested clauses, and acceptable edits.
6. Further streamline the process with advanced technologies
Some law departments are experimenting with advanced technologies like artificial intelligence that use their roadmaps to review contracts. Automating the review process in this way allows it to proceed more rapidly and efficiently, saving in-house counsel’s time for more strategic and higher-value work.
There may be some situations—such as when the volume of internal contracts is large or is rising—where outsourcing their review to a low-cost legal service provider either on or off-shore makes the most sense. The best way to make this decision, however, is to conduct thorough cost-benefit and risk exposure analyses.
For additional best practices of contract management, explore Thomson Reuters Practical Law Connect.