Contract Risk Management Tools for Legal Teams
As an in-house counsel or contract manager, one of your main goals is to minimize risk exposure. To do this, you need to identify contract management risks and look for risk-mitigating solutions.
To save time and energy, you should use contract management tools to help you identify and manage these risks. Contract management tools enable legal professionals to optimize contract management lifecycle processes. These tools can also help you maximize business efficiency and agility since they store, translate, and analyze contracts and their information.
Read on to learn more about common contract risks and how contract management tools like Ironclad can help you manage contract risks.
There are a number of risks that come with contracting, particularly if you’re still using manual contract processes. If you’re not using up-to-date software that helps you mitigate risks, you will have to face several challenges that stand in the way of compliance. These include rogue contracting, lack of compliance and consistent standards across departments, and lack of contract visibility.
Rogue contracting happens when parties come to an understanding but leave their companies’ legal departments out of the loop. This means that when something goes wrong, the legal team will have to resolve the mess without much context. If legal teams are allowed to review everything beforehand, expensive legal cleanups can be avoided.
For example, in Filmtec Corp. v. Allied Signal, the Federal Circuit held that “hereby assigns” took precedence over “assigns” in a patent assignment. As such, Roche won patent rights over Stanford because they included the word “hereby” while Stanford didn’t. Since a single word can change the result of a lawsuit, it’s vital for any organization’s legal team to look over all of its contracts before execution.
However, manually reviewing every contract before it goes out the door can be time-consuming or even impossible in mid to large-sized companies. To ensure that every contract in your organization uses proper legal language, your legal department should develop a ready-to-go repository of legal templates. By using templates to get ahead of risks and baking compliance into external and internal processes, your organization will be better equipped to deal with any issues that crop up, even if a case like Filmtec comes along.
Lack of compliance and consistent standards across departments
Not only will templates ensure that your company’s contracts are all properly worded, but they will also establish consistent contracting standards across departments. In-house counsel can also use these templates to ensure compliance with local and international laws by adding clauses to certain categories of templates (i.e., those regarding intellectual property) that must comply with specific regulatory standards. That way, Legal will be able to save a lot of time and energy that they would have ordinarily spent on manually checking, writing, and editing clauses.
Consider using Ironclad to bake risk mitigation directly into your workflow. User-friendly, codeless, and usable across all departments, Ironclad streamlines the entire contracting process by letting you take full control of template management. With a few clicks, you’ll be able to make changes to templates that anyone in your organization can use.
Without Ironclad, you would have to do a lot more work to ensure that everyone is using the right version of your template. For instance, you might have to send out emails, conduct special workshops, or investigate your employees’ local drives to recall any bad templates and make sure everyone is using the newest version of your template.
Lack of contract visibility
Another contract risk you will encounter is not knowing what your contracts contain and where they are. This lack of contract visibility can lead to a failure to meet contractual obligations, lapsed deadlines, falling behind on milestones, and even lawsuits.
The dangers of paper contracting and non-centralized storage
Lack of contract visibility is a common problem because many organizations have yet to digitize all of their contracts and store them in a searchable, centralized repository. As such, many of their contracts remain in unsearchable places like USB drives or filing cabinets.
By digitizing all of your contracts and uploading them onto a centralized hub, you’ll be able to put your contracts’ metadata to work. That way, IP clauses, deadlines, and other information that can expose your organization to risk can be easily spotted and tagged.
Most modern contract management software provides you with repository and database tools you can use to get ahead of these risks. Ironclad is no exception — it transforms the traditional contracting process from a disorganized, stressful undertaking to a predictable and scalable process by tracking relevant metadata on all of your contracts. This allows in-house counsel to identify potential risks with just a few clicks.
Tools to help manage contract risks
If you’re researching contract management tools that will help you manage and mitigate contract risks effectively, make sure that you’re getting software that gives you full control over your contracts. Ironclad comes packed with powerful tools such as a contract repository, a Workflow Designer, Clickwrap, and dynamic templates to help you manage and mitigate contract risks.
Ironclad comes with a Dynamic Data Repository, a searchable centralized hub that makes locating and using important contract metadata simpler than ever. Our Dynamic Data Repository is a zero-training-required, intelligent database that unlocks new ways of understanding contract data.
With our Repository’s advanced search functions, you’ll be able to answer questions about contracts instantly. Instead of rummaging through your hard drive, cloud storage, or physical file cabinet to determine when you need to meet a certain deadline, all you have to do is key in search terms to put your contract metadata to use.
This tool also features report creation, process automation, and intelligent alerts that will drive your business toward intelligent decision-making. For instance, you can automate weekly emails for upcoming key dates found in a set of contracts. This will give everyone on your team a clearer view of how to achieve both short and long-term goals.
To help you combat rogue contracting, Ironclad has a Workflow Designer that you can use to:
- Craft workflows so you can draft contracts without manual review
- Build and customize standardized contract templates in minutes
- Cut down on training time by assigning active roles in contract management to departments and employees with unique expertise
- Ship updates instantly
Workflow Designer is incredibly easy to use. It’s a self-serve tool with a simple drag-and-drop user interface that only requires a couple of clicks to create a contract. Upload a template, tag fields as needed, and add signers and approvers — that’s all you need to do to start drafting a contract.
With Workflow Designer, you’ll also be able to cut down on inconsistent contracts across different departments since you can create, send, and approve standardized contract templates to be used throughout your organization. That way, everyone will be on the same page no matter whether they’re from HR, Marketing, Legal, or another department. You’ll also be able to save time and energy that you would’ve spent drafting, reviewing, and editing contracts manually.
To streamline the contract signing process even further, Ironclad also provides the option of clickwrap (also known as click-to-sign, clickthrough, or click-accept) agreements. With clickwrap, all users have to do is check a box or click a button that indicates they agree with the document.
Clickwrap agreements are perfect for boosting productivity and achieving consistent standards across departments. They are especially useful for standardized contracts such as NDAs or Terms and Conditions since they typically use the same language from person to person and can be accepted at high volume by many signers at once.
If you’re worried about whether clickwrap agreements are enforceable in court, don’t fret — they are. Legislation like the Electronic Signatures Act (ESIGN) and the Uniform Electronic Transactions Act (UETA) outline how clickwrap agreements are just as enforceable as traditional paper contract signatures and electronic signatures.
Ironclad is a premier contract management software for risk mitigation. Not only does it reduce the risks that come with rogue contracting, such as lack of compliance or inconsistent standards, but it also helps you improve contract visibility. With an array of powerful tools like a Dynamic Data Repository, Workflow Designer, and clickwrap agreements, Ironclad makes contract creation, editing, and execution easier than ever.
If you’re interested in trying Ironclad out for yourself, you can request a trial here.