Self-Service Contract Automation And Management: An Advantage For Corporations And Counsel

Sunday, April 3, 2011 - 00:00

Business Integrity ®develops and markets ContractExpress for SharePoint, which is an enterprise-class software platform optimized for contract automation and management. It provides compliant self-service contract creation, approval workflows, and the storage, management, and reporting of agreements and contracts - mapping onto and enhancing the legal business processes of an organization.

The following report is based on a webinar presented February 25, 2011 by Business Integrity, Inc. The presenter was Brian Long, Eastern Regional Sales and Account Manager. With a client base that includes blue chip corporations and elite law firms, Business Integrity is the leader in document assembly and contract management software for Microsoft ®SharePoint.

Let me begin with some background on Business Integrity. We are a ten year old legal technology company focused on contract automation. Business Integrity grew out of pioneering work done by a London law firm with two of its clients, Logic Programming Associates and Standard Chartered Bank. From there, we quickly acquired two of the world's largest law firms, Linklaters and Clifford Chance, as customers, and then shortly afterwards, the legal departments of Cisco in San Jose and Microsoft in Redmond. Since then, we have expanded our customer base to include six of the top seven Am Law 100 law firms, and other leadingcorporate legal departments including PepsiCo, Nike, Georgia Pacific, Christies, AXA Insurance, and Cadence. ContractExpress is a great example of the "when you build a better mousetrap.." principle.

Addressing Key Issues

Let's crystallize some key issues and then discuss how ContractExpress addresses them. Corporate counsel has challenging work to do relating to litigation, governance, complex contracts, consumer and employment policies, international negotiations and regulatory compliance, to name just a few. While much cannot be automated, some repetitive legal tasks can be if appropriate compliance standards and controls are put in place.

An example of a viable area for automation is the generation and management of boiler-plate legal contracts, such as confidentiality agreements and license agreements. As an example, Microsoft uses ContractExpress for the production of all its end-user license agreements (EULAs) for its software products. Anyone who accepts a Microsoft EULA - for example, when installing Internet Explorer 8 - is an indirect user of ContractExpress. Microsoft's business requires their Legal and Commercial Affairs department in Redmond to produce documents in all 35 languages that Microsoft Word supports. ContractExpress reduces the time required to produce EULAs for new products, freeing up Microsoft's licensing attorneys to more rapidly address non-standard situations as they arise.

Solving Practical Problems

What are other problems that ContractExpress for SharePoint solves? Typically, generating contracts is a manual process that slows business operations. Sales people often comment that every contract feels like re-inventing the wheel. Without automation, drafting contracts can be a time-consuming process, where the delays may impact the outcome of a sale.

It is natural for variations to be introduced into contract language based on the style of the attorney drafting it; however, this can present a consistency issue, particularly where multiple attorneys (in-house or outside counsel) get involved. Even slight variations in language can create problems in consistently managing obligations and establishing the value of a corporation's portfolio of customer agreements.

A solution to these problems is an automated self-service contract creation and management system such as ContractExpress. By having the subject matter specialist attorney create appropriate ContractExpress templates, the speed, cost, consistency and risk mitigation of creating individual transactional agreements are all much improved.

The Role Of The Questionnaire

Business users answer a sequence of questions in an online questionnaire. The questionnaire is dynamic, so that only relevant questions are asked, based on the user's earlier answers. The questions are phrased by the attorney responsible for the template, taking into account the business user's role. For example, rather than directly asking a question about governing law, which the business user probably wouldn't understand, the attorney responsible for the template might ask the question in appropriate business language - "which division or region is responsible for the agreement?" - similar to interviewing the business user over the phone.

The questionnaire can also ask questions which may not directly change the generated contract, but are material in determining whether the contract requires approval by Legal and/or management. Any combination of questions can trigger the need for approval, and if appropriate, the level of that approval. As such, not only does the automated template determine appropriate and compliant language in the generated document, but also, as Sarbanes-Oxley requires, enforces compliant behavior by the business users.

Reporting And Alerts

Answers provided by business users not only control the language in the generated contract, and the need for approval, but are also stored for downstream management, reporting and analysis. Information about the circumstances of individual requests is stored, for instance the date and time that an approval is sent to Legal, to improve transparency between business users and Legal.To make the management of contracts a proactive process, alerts can be set on dates to email the business user and Legal when a contract hasn't been returned by the counterparty, or when a contract is coming up for renewal.Wide Range Of Agreements Can Be Automated

One of the most common agreements clients want to automate are confidentiality agreements (CDAs) or non-disclosure agreements (NDAs), which given their sheer volume can place an enormous burden on legal departments. With ContractExpress, Legal can empower the business users to create agreements, while reserving the option to route a subset of complicated or non-standard situations back to Legal.Other common agreements clients automate include sales contracts, license agreements, procurement agreements, real estate agreements, human resource documentation. Really, any type of rule-based legal document can be automated using ContractExpress.

A Typical Implementation

ContractExpress implementations are always sponsored by the general counsel, and typically managed by an assistant general counsel (AGC). The AGC is normally responsible for the language of the contract being automated and empowered to make changes to the language. Depending on the scope of the contract (for instance, to cover foreign jurisdictions), the AGC may call on expert advice from outside counsel.

Unlike all other document assembly and contract management products, ContractExpress does not require the assistance of IT programmers to automate the marked-up template. Instead, the ContractExpress Author add-in for Word is able to automatically analyze the legal mark-up in the template and achieve in seconds what it would take a programmer days or weeks to accomplish - all with the flexibility, speed, and legal trust that transforms contract automation into an operationally feasible and sustainable legal process.

An automated ContractExpress template is still a single Word document, and capable of being easily read and updated by an attorney. This is important because the template will inevitably change with time, to incorporate new provisions and reflect changes in the law. By eliminating IT and programmers from the process, lawyers can be confident about the legal language in the generated agreements, and are able to make and approve changes to the template in a timely manner.

User roles are typically configured so that business users are able to request contracts, see only their requests, and only access PDF versions of the agreements when approved. Lawyers can typically see all requests, can access Word editable versions of the agreements for non-standard situations and negotiations, and can approve or reject contract requests. Contract admins are able to manage the contract process and, once signed, export the completed agreements to the contract repository, run reports, and be a point of contact for business users. Site admins manage users' roles, and can set permissions to restrict access to specific groups or departments.

Intuitive And Responsive To Business Needs

ContractExpress is intuitive and responsive to specific business needs. ContractExpress can be configured so that business users are not even required to understand the different types of agreements. Clicking the "create a contract" button can ask questions to determine the type of contract, for instance a consulting agreement rather than a confidentiality agreement.

Sales representatives have the option to review all their contracts and can immediately see the status of each via indicators we call "traffic lights." A green light signals that the document is complete and ready to go. A yellow light means that the document, having been sent to Legal, is pending approval and cannot be modified. Finally, a red light indicates that the document requires approval and must be forwarded to Legal.

ContractExpress displays the name of the reviewing attorney to the business user, even if the request is re-allocated within Legal. Attorneys are able to sort requests by business user and request date to prioritize their work. In addition to real-time capabilities relating to the questionnaire process, ContractExpress can track and manage contract history for each user. Original questionnaire responses are stored, and the system provides an automatic prompt if a contract is already on file. Thus, a sales representative who is discussing new business with an existing client can see if a current NDA exists and can easily generate a supplement to that agreement. For contracts that require lengthy negotiation, the system incorporates negotiated changes into the final version, and flags the agreement as being non-standard.

Leveraging Microsoft Office and SharePoint

ContractExpress is seamlessly integrated with Microsoft Office and SharePoint to provide state-of-the-art contract automation within Microsoft's familiar Word environment and proven content and document management application. This means comprehensive version tracking, reporting and secure document sharing for editing and analysis. Corporate legal and sales departments can track contract use by region, country, product, sales person and timeframe, creating a powerful tool to analyze fundamental, corporate-wide activities as well as to monitor compliance with legal and regulatory mandates.

Summing Up

In summary, ContractExpress greatly reduces manual contract processes for standard agreements and frees up corporate legal departments to focus on larger legal issues while still maintaining control of day-to-day processes. Its objective, questionnaire-driven technology allows deals to close more promptly. Integration with SharePoint provides critical document management and reporting functions within a familiar application.

ContractExpress allows our corporate clients to gain the advantage in the "battle of the paper" and prevail with preferred language. It presents a polished image that is backed up with sound legal input and a contract system that does the heavy lifting. In the words of our CTO, Andy Wishart, "Business Integrity has a singular, laser focus on contract automation. We lead the world in making this complex task quicker, simpler and above all safe. Our market focus drives our products, thinking, and approach. We do nothing else."

Please email the presenter at brian.long@business-integrity.com with questions about this webinar.