How to Streamline the Contract Creation Process
Contracts have been an integral part of our civilization throughout history. The concept dates back to sixth-century Roman law, which declared that contracts enable two parties to create legally enforceable agreements for goods and services. Today, contracts are the glue that binds businesses and consumers.
With more and more companies striking deals around the globe every year, there’s an ever-increasing need for business owners and operators to have ready access to enforceable contracts. Whether you need simple sales contracts or complex NDAs, streamlining contract creation in the contract management process can effectively free up time for you to focus on business growth.
Creating binding contracts in fast-moving markets
Negotiating agreements is critical to your business success — this practice, after all, is what dictates each party’s rights and responsibilities to the other. Historically, the contract creation process has been approached singularly, with business owners drafting new contracts each time they solidified a deal.
In today’s fast-paced business world, time spent on repetitive tasks is time better spent on your company’s daily operations. Fortunately, advances in technology have provided ready access to quality online contracts. By automating contract creation across your organization, you can standardize your company’s best practices, resulting in more valuable deals and less time in contract disputes.
Using templates to streamline the content creation process
While specific contract terms will vary depending on your needs and those of your customers, you can reduce negotiation time by creating contract templates. Developing company-specific terms, promoting common clauses, and standardizing legalese enable you to focus on the specific nature of each transaction and maintain consistency across your negotiations.
The first step in developing effective templates is to identify the parties involved and document the essence of the agreement. Essentially, what you’ll each be required to do and for what purpose. As you begin the template-development process, it might be helpful to review your internal contracts as well as all of the documents you are familiar with and comfortably rely on to protect you and your business. Once you’ve done this, you can move on to developing templates that help you automate your processes.
Evaluate value and risk
To create templates that are dynamic yet reliable, begin by assessing your existing contract creation process. You can categorize each step using the following criteria:
- Routine versus novel processes
- Value to your organization
- Level of risk
Your templates should then be based on how you measure each process against these factors. For example, because you’re likely to negotiate and renegotiate high-value, high-risk contracts involving new terms multiple times, your template will likely contain few details and resemble an outline versus a ready-to-sign agreement.
Alternately, deals you strike repeatedly can be memorialized in a readily available contract template, requiring modest additional effort from you to close the deal. In some cases, you may be able to present your template contract to your customer with little to no revision, saving both of you time and money.
Expanding your template's reach
To further streamline your content creation process, you can determine where your contract template will most likely remain unchanged based on your negotiations and expand in those areas. For example, if your advice of rights to your customer in an NDA is standard across the board, add all those terms to your template. If one or more of them don’t apply when negotiating a specific contract, removing them is much easier than creating each NDA from scratch.
Additionally, over time, pre-established contract ‘starters’ become outdated and cause unnecessary negotiation. Consistently re-evaluating your contract starting points and taking advantage of every opportunity to reduce negotiation cycles will make your content creation process more efficient.
Reviewing your templates with an eye toward readability is also helpful. Ask yourself what legal language you could replace with plain English? How can the text be simplified to make it more understandable for the parties and anyone reviewing the contract down the road? Accessible text minimizes not only the need for explanation and clarification during negotiations but also the time spent by the legal department and the risk of misunderstandings in the agreement’s execution.
Identify the players in your content creation process
Content creation routinely gets stalled by having too many hands in the pot. By identifying the internal and external roles that all parties, including your staff, play in creating and negotiating contracts, you can reduce unnecessary back and forth.
For example, your finance department may want visibility in every purchase or sales agreement you negotiate. However, if their input is generally standard, you can remove them from the contract creation process and focus on their responsibilities after the contract is executed.
Some teams might be involved in almost every contract negotiation and, in some cases, more than once. Your legal department, for instance, might be advising you at the outset of negotiations and giving final contract approval. Consider what tasks these players perform consistently across your deals and memorialize them in your template.
Once you’ve determined who’s essential in the process, carefully define each party’s role, detailing what tasks each must perform and who is responsible for final oversight. By removing anyone better suited to a hands-off position, you’ve reduced the number of eyes needed to get your contract from start to finish.
Equally as important as identifying who to leave out of the contract creation process is maximizing the performance of your key players. For example, contracts with low value and risk are best directed to non-attorney professionals who understand the process but are not required to substantially negotiate or edit the agreement. Doing so enables the legal team and senior management to fully invest in the substantive portions of contract creation, like procurement.
Create playbooks to improve consistency and increase efficiency
Although some contracts, like sales agreements, may require ongoing negotiation, your business likely has a certain range of negotiating positions. Some contract terms you’ll generally accept, and others you’ll always walk away from. Over time, patterns may emerge, both in your offerings and your customer’s responses. To maintain consistency across your contracts and draft them more efficiently, it’s useful to create a playbook to document these positions.
A contract playbook outlines your company’s standard contract terms, explaining each clause as well as your fallback position if your customer rejects your initial terms. Your playbook can also define your ‘walk away’ position by clearly stating what your business will—and will not—accept in terms of risk, cost, and oversight requirements.
Well-drafted playbooks include highly contested clauses, descriptions of negotiation patterns, frequent customer responses, and regularly accepted edits. It enables you and your team to stay focused and close the contract faster—or leave the deal on the table if it doesn’t work for you. The bottom line is that while you want to sell to as many customers as possible, you should only do so if it makes good ethical and financial sense.
Use advanced technologies to streamline contract creation further
As a business owner, you have many responsibilities, and it’s hard to be everywhere you need to be at once. Having to hand-hold every contract from beginning to end wastes time and leaves more room for error. Technology can serve as a valuable tool in helping you manage your diverse tasks, particularly as they relate to your contract creation.
Today’s advanced technologies can help you streamline your processes for everything from contract presentation to approval workflows to edits and signatures. Creating a contract workflow is simple as uploading a template, tagging any fields that the requestor must provide, and adding approvers and signers. Products like Ironclad’s Workflow Designer allow users to build and launch contract generation and approval processes in minutes — not weeks or months.
Using a central location for contracting requests gives users access to the most up-to-date template to generate contracts. You can rest easy knowing guardrails on clauses and approval routing ensure 100% automatic contract compliance. Workflow Designer also helps companies ensure their contracts comply with organization policies and legal requirements while eliminating the need for manual review.
Effective contract management software can help you route your contracts to the appropriate person, increasing efficiency and accountability. By adopting contract creation and management technology, you can automate your contract’s lifecycle, minimizing mistakes and maximizing profits.
Assess existing contract performance
It’s helpful to start at the end and work back to improve your contract creation process. By analyzing available data that measures the performance of your existing and completed contracts, you can see what works and what doesn’t. You can also analyze conditions and terms such as pricing, quality standards, warranties, and payment schedules and revise your templating and creation processes accordingly.
Ironclad helps you stop doing it the hard way
No matter how many contracts you’ve negotiated or drafted, you always face challenges in the contract creation process. However, you can effectively streamline your content creation process by utilizing well-drafted templates and playbooks, identifying your key players, taking full advantage of advanced technology, and assessing contract performance.
Ironclad is software that does all the administrative work better left for a computer, freeing your legal and senior management teams to do substantive work and drive business strategy. Ironclad’s contract lifecycle management platform can make contract creation more efficient, more profitable, and less stressful for you, your team, and your customers. If you want to learn more about how to streamline your contract creation process, reach out to Ironclad today.
Table of contents
- Creating binding contracts in fast-moving markets
- Using templates to streamline the content creation process
- Evaluate value and risk
- Expanding your template's reach
- Identify the players in your content creation process
- Create playbooks to improve consistency and increase efficiency
- Use advanced technologies to streamline contract creation further
- Assess existing contract performance
- Ironclad helps you stop doing it the hard way