Ditch the Consultant: Why Traditional Contract Review Services Are Insufficient
TermScout Jul 23, 2022 2:20:50 PM
Contract management is risky business — with every contract you get into, you expose your organization to financial, brand, security, or legal risks. Failure to identify, mitigate, and avoid even one contract risk can result in a domino effect that could make it difficult for your organization to recover from.
Thorough contract review services help you identify and act on any risks in a contract before they become a problem. But relying solely on pure-service contract reviews conducted by consultants is no longer sufficient. Instead, contract reviews that leverage the power of technology, supported by professional services, are proving themselves to be the best choice.
After all, contract review software has registered an average of 94% accuracy compared to 85% for experienced lawyers. Keep reading below to learn more about this shift in the industry, or start by taking a look at the full capabilities of review software.
Traditional contract review services involve hiring a contract lawyer to read through a contract line-by-line, understand it, and ascertain that the document is fair and adheres to all legal requirements.
The lawyer should see that the contract acts as a valid legal document if required. A contract lawyer also explains unclear contract clauses, suggests changes, and draws up a new contract if necessary.
While these consultants are certainly masters of their craft, this traditional way of reviewing contracts presents major flaws and limitations — two words you'd rather not hear when you are handling an important document like a contract. These include:
Consultative contract reviews can turn into a painfully expensive ordeal. Fees payable depend on whether your lawyer charges you per hour or per project, with hourly fees quickly adding up over time.
You could end up parting with thousands of dollars if you're dealing with a lengthy or complex contract.
Most legal professionals will use their past experience or general industry standards to review your contract which may not work for your organization. Proper contract review services should consider the internal needs of your company's playbook to determine the suitability of a contract.
An organization's playbook highlights important issues that should inform every contract agreement such as negotiation points and commercial interests like the preferred markup.
A consultant may not always know if the terms within the contract are market, or in some cases, what is market for specific terms.
No matter how experienced and wise a consultative contract lawyer is, they often suffer from physical and mental fatigue from working on documents for long hours or late into the night, making them more likely to miss or overlook important provisions. Seemingly simple oversights can snowball into expensive issues for your organization.
Some business deals are time-sensitive. Your ability to review a contract fast and choose your business partners gives you an edge. Hiring a consultant to review your contract doesn't give you the luxury of saving time.
Modern contract review services save you the headache of traditional pure-service contract reviews. This involves using AI software to identify critical provisions in your contract and highlight the most important issues for your company.
Here are four ways that modern contract reviews come to your rescue.
Whereas hiring a consultant to review three or four contracts will send your overhead costs through the roof, contract review software is an affordable and more accurate option when you want to review multiple contracts. For under $100 per month, you can analyze and review public contract terms, how they stack up against the market, and, for an added fee, benchmark your own terms against other companies.
Contract software reviews third-party contracts based on the provisions in your organization's playbook, giving a more accurate presentation of whether a contract meets the most important needs of your organization rather than a set list of general expectations.
Contract review tools that combine artificial intelligence and human intelligence produce contract reviews with 99% accuracy. The AI software is set to recognize important company and legal terms for your business, making reviews that much more accurate.
AI tools are built for contracting speed, allowing you to review contracts within minutes instead of days or weeks. You can review multiple contracts with as little as a one-day turnaround which helps you to quickly identify viable partnerships and get ahead with business.
You already have too much on your plate trying to run other business functions. Spending days looking for a contract lawyer, attending meetings and consultations, and worrying about the accuracy of contract reviews should not be on your radar.
We are in the era of automation where you can perform most tasks at the click of a button. Yes, even accurate and speedy contract reviews. Instead of having to work around weeks of turnaround times, get your contract reviews done within one day with 99% accuracy.
You can quickly compare third-party contracts with your organization's playbook using TermScout's hybrid contract review software. Join other professionals who use the modern way of reviewing contracts and get more time to focus on what you love! Learn how TermScout works today.