What every small services company or SaaS technology provider hates to hear from a prospect or client, “We're using our paper...” For those of you who don’t negotiate contracts for a living, this is when a prospect or client insists on starting the contractual process with their standard template, whether it is a software agreement, statement of work, or master services agreement.
This can be a struggle for smaller organizations whose templates have been designed to include the content and terms that are most critical to their business relationships and they are not prepared for the sheer volume of clauses and items in a client’s contract designed for every possible relationship. Almost every contract is one organization’s paper, meaning that 50% of parties are negotiating on paper they have never seen before.
The issue of third-party paper is one that plagues the LegalTech landscape. First, many Contract Lifecycle Management (CLM) tools work on predesigned templates, built around an organization’s typical contract structure. This allows an organization’s CLM tool to identify and modify existing clauses and understand the differences from one contract to another.
This can break down with third-party paper. The chances of another party’s paper following your organization’s template is close to zero, making the tool difficult, if not impossible, to use. CLM tools know this and have built-in work arounds, including the ability to manually map clauses to you expected fields, allowing for human data entry, or simply storing PDF or Word documents that can be downloaded. But this adds manual work to an organization and results in dual processes for the legal teams.
When layered over an existing CLM tool, Clearlaw’s Natural Language Processing (NLP) tool transforms contracts into structured data, independent of template or framework. This allows for the immediate identification of clauses and key contract data. Clearlaw’s API, Clearlaw Connect, allows users to push this data to a CLM, removing the limitation that comes with third party paper during the initial contract negotiation while normalizing the data with one’s existing contracts. This allows for the comparison or analysis of clauses and key data across contracts, despite originating from different organization’s contract templates.
This resolves one of the biggest issues in the industry. As we say at Clearlaw, no matter whose paper you start with, someone is using third party paper. But that doesn’t have to slow you down. Stop playing “Whose Template is it Anyway,” and move your business forward.