What will the commercial profession look like a decade from now?
Expensive, time consuming, labour intensive and inefficient processes are open for disruption.
Let’s look at an example, Ace Limited employs its own internal legal function, one for each business silo, pouring over a multitude of inbound contracts, clause by clause, arguing, compromising, redrafting, collaborating, and finally agreeing with the other party and recommending a contract to the boss for signature. Sometimes they get signed, filed somewhere and forgotten.
Then there is a breach, both parties position themselves, external council is sought, the arguments and positions solidify, ego starts to get in the way on both sides, sue them! Affidavits, summons and eventually a court date is set. More particular of claims and affidavits, more consultations and preparations, see you in Court. The decision goes against us, appeal!
Now step aside and count the cost, in distraction, legal costs, judgement, and the many years it has taken to get a resolution.
This cannot be an efficient and effective way of protecting the business interests, right from the start of exchanging draft agreements.
More damaging to the business is that somewhere all that valuable data sits locked away in paper and a filing cabinet. How many cases, if they get that far, are lost because the original contracts and supporting documentation is lost or destroyed?
Can the internal legal team go from contract gatekeeper to empowering a new level of efficiency, providing executives with valuable business information?
- Standardise your agreements
- create a clause library of pre-approved acceptable changes
- capture the data from the source of the contracting process
- integrate it into the documents themselves
- automate the signature part, (yes that means they get signed)
- comply with delegations of authority through workflow (no one can use the excuse that they were not authorised to sign or can’t find the signed copy) and finally,
- file all documentation electronically
Go from reacting to inbound contracts to creating your own standard terms, especially where you have the leverage to do this (Large corporate of Public Sector organisation). Empower the business silo’s to create and sign their own agreements from locked down templates, standardise best practice across silos. Now manage the tasks and obligations in the contract so you nip any possible dispute before it becomes an issue.
Imagine that Industries have agreed to a set of standard contracts, and the processes are all automated, there is a common dispute settlement body the parties have agreed to use, would that not alleviate 90% of what the legal function does today? Do we not see evidence of this in the many contracts that we sign by simply ticking a box “accepting the terms and conditions”?
Where are you in the digital transformation of the legal function?