April 2019 . Finance

Do you review incoming contracts line by line? Or are you already checking compliance efficiently with the help of AI?

Save up to 85% of your time when checking contracts, whilst avoiding reading lengthy documents and repetitive terms. Sounds appealing?

 

 

The revision of contracts before closing a deal costs legal teams a lot of time, nerves and money. The conventional way to go about it is to read through every single text line to find and understand the key clauses a contract contains. Now imagine doing that for a wave of 50 incoming contracts that all need to be reviewed within a very short timeframe, how would you handle that?

Each contract needs to be checked for compliance and additionally scanned for possible risk clauses. That might sound like an interesting treasure hunt, but when you consider that 7 out of 10 requests to legal teams involve low-value, recurring contracts, it becomes clear that this is actually a pretty repetitive and tiring task.

On average, the manual review of a single contract takes up to 24 hours of paperwork divided on to three different departments and costs around 800 Euros per contract[1].

Knowing this, it might sound surprising that 80% of contracts are actually still managed using manual processes today, which literally means reading clause after clause to find the hidden terms. With hundreds of new contracts coming in each month, legal teams are often snowed under with work. Additionally considering the back and forth that is needed between the various divisions and delays in their communication, a contract review can easily take several business days to be finished.

Much to the detriment of procurement managers for example, who constantly have to make smart purchase decisions and keep their suppliers happy. Efficient and timely review and negotiation of contracts are crucial for procurement divisions as delays put project timeframes at risk.

Knowing this, it might sound surprising that 80% of contracts are actually still managed using manual processes today, which literally means reading clause after clause to find the hidden terms. With hundreds of new contracts coming in each month, legal teams are often snowed under with work. Additionally considering the back and forth that is needed between the various divisions and delays in their communication, a contract review can easily take several business days to be finished.

Much to the detriment of procurement managers for example, who constantly have to make smart purchase decisions and keep their suppliers happy. Efficient and timely review and negotiation of contracts are crucial for procurement divisions as delays put project timeframes at risk.

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