We all know that the coronavirus crisis has been a testing time for businesses. Yet, despite the challenges, there have been many instances where companies have adapted their functions to help combat the pandemic's effects.
In some cases, companies have completely remodelled their services to provide solutions to genuine problems. For example, car manufacturers have paused vehicle production and focused their attention on building ventilators and respirators. Some businesses have even pivoted away from their usual proposition to provide online classes and services to people in lockdown.
For larger and more established organisations, pausing regular day-to-day activities and transitioning to something completely different has been perhaps easier than for smaller companies at the beginning of a journey.
Pausing or changing operating models is not always viable for SMEs. Nevertheless, and despite the challenges faced, there have been examples where companies have adapted or shifted their processes to meet the conditions imposed by the pandemic.
This is certainly the case with contracts. Contracts have been, are today and will continue to be, an essential part of daily company administration. They are the lifeblood of commerce; the first touchpoint between employers and new employees; used to close deals and generate revenue, and they dictate the terms of a business's relationship with other companies.
At Juro, we've noticed a behavioural change. As providers of an all-in-one contract automation platform that helps businesses create, execute and monitor contracts without having to leave a browser, we have seen a significant uptake in customers looking to agree on contracts through our platform. In fact, the volume of contracts being signed has increased by 300%.
This got us thinking: why is this the case? Clearly the pandemic has played its part but, on a broader level, perhaps people have grown sick and tired of fiddly paperwork, endless back and forth emails and toing and froing.
So, in a world where challenger banks help customers manage finances digitally, chatbots resolve issues before anyone's even spoken to a human being and project management tools help teams collaborate remotely from anywhere in the world, are contracts the next in line for a revolution?
In this piece, we take a holistic look at contracts and explain why an overhaul in contract processes has been long overdue.
What's wrong with the way we handle contracts?
Several problems affect both the process and the content of contracts. Successfully resolving these could have a real impact on business growth.
With regards to the process, Microsoft Word is still the go-to system for many businesses which can, unfortunately, cause two fundamental problems for all parties:
- a lack of version control;
- and endless manual work.
A lack of version control
Legacy systems like Word can only ever serve static files which are then emailed around to teams and counterparties. There's always a risk that multiple versions of the same document exist and teams aren't always aware of which version is the most up to date—something a counterparty is likely to perceive as unprofessional. This disorganisation is likely to lead to an untidy and hectic experience for all involved.
When it comes to remote working, this can be an even bigger problem. Before remote work became the norm, those in smaller offices or teams could prevent miscommunication by speaking directly to their colleagues or organising impromptu meetings. However, working at a geographical distance can mean that this level of collaboration ceases to exist.
Having all information stored within one single source can help ensure that contracts remain consistent and up to date.
Seemingly endless manual work
Many businesses still don't have a digitised contract process in place. This means back-and-forth email chains, hard copy contracts, printing, signing and scanning documents and time wasted on low-value work can all be prevalent.
When it comes to high-volume documents such as NDAs, offer letters or order forms, this can quickly turn from an inconvenience to a severe problem.
Inevitably, smaller businesses are the hardest hit. With often just a small legal function required to serve all teams, an absence of contract automation could lead to an overwhelming amount of legal admin.
Beyond the manual, unscalable contract process, the content can also leave a lot to be desired.
Most contracts consist of lengthy, legalese-heavy paragraphs that, for the uneducated, are difficult to understand. These contracts can also bury critical details making it challenging for the counterparty to make head or tail. The measurable result of a complex contract is that the time between receiving and then signing it is often lengthy.
Now more than ever clarity is essential, and if businesses are to thrive in a remote working environment, they must ensure that the documents they send to counterparties are engaging, easy to understand and, most importantly, contain contracts that people want to sign.
This will help mitigate the risk of miscommunication, improve the counterparty experience and reduce friction between teams as the business continues to scale.
Typically, contracts are the first touchpoint between the counterparty and the business. This should mean that companies go above and beyond to leave a positive first impression. Unfortunately, this is not always the case.
Instead, contracts look like copy-pasted versions of an archaic template that hasn't been updated since a company's early existence.
This lack of personalisation reflects poorly on a business's brand and reputation, particularly when it comes to recruiting new employees. With face-to-face interviews not possible, the importance of providing documents that display a more human touch, e.g. employer branding, aesthetically pleasing, easy to read, is perhaps more crucial than ever before.
What are the advantages of contract automation software?
Historically, the way most businesses manage contracts has been a painful process. With teams wishing to create contracts through the legal team or freestyling their terms on old versions scattered across multiple systems, there is often no single source of truth.
Add the manual work involved in inputting key details plus back and forth email chains to the mix, it becomes clear that the whole process is pretty time-consuming.
Saved as a PDF, the contract is subsequently sent to the counterparty and, when the counterparty inevitably wants to make changes, the contract is edited in Word, re-saved as a PDF and re-uploaded into the email chain.
When, eventually, everyone is ready to sign, the process typically involves uploading the document into yet another platform and eSigning or, worse, printing, signing and scanning the document.
Managing thousands of static files, across several systems in this way is unsustainable. It also leads to multiple versions and cursed filenames like 'MSA_v2_edits' and 'MSA_FinalFinal_3_dontdelete'. At a high-velocity company, dealing with hundreds of contracts every month, this manual process won't scale with the business.
This is why contract automation platforms, such as Juro's, can help businesses digitise the end-to-end process to make sure teams can:
- Create contracts from templates without having to ask the legal team each time. The ability to template contracts from which the wider business can self-serve saves legal time and guarantees a single source of truth for contracts.
- Collaborate internally on the document without having to leave the browser. Being able to comment internally on a contract, and seeing an audit trail of suggestions and changes helps with visibility.
- Negotiate externally with the counterparty who can redline and review a single version of the contract. Negotiations happen in the same place as internal collaboration and help teams maintain version control.
- Agree and sign the contract online—e.g. no more wet signatures! A native eSignature tool allows teams to sign on any device.
- Track contract metadata to keep on top of risk and enable dynamic searches.
- Monitor contract performance with analytics enabling legal teams to stay ahead of renewal deadlines and eliminate any bottlenecks in the contract process.
SMEs may wish to stick with old routines where heavily negotiated contracts are concerned. Still, for low-negotiation and high-volume documents where time spent and resources used are all too high, contract automation software is a no-brainer.
The benefits of having all legal documents in a single workspace are clear. So, even though employees may be working remotely, there is no reason for contract processing to stop altogether.
Instead, teams can find a way not just to survive but thrive. Thanks to increased online collaboration, business can still be done, employees can be hired and deals can continue to be closed.