Have you recently implemented contract discovery software? If so, let me take a moment to congratulate you in taking a key step towards a comprehensive and accessible enterprise contract portfolio. Now that the software has located or “discovered” all of your contracts you need to take the next step: You need to dig deeper into the results to see what they contain if you’re going to be able to properly leverage your contracts and you need to confirm the integrity of the auto extraction. But how? This is where a solid contract review process needs to be implemented.
What You Need for a Solid Contract Review Process
Based upon my experience managing both onshore and offshore document review for ediscovery and contracts as well as working with technology providers, I’ve assessed the options and key factors for consideration as you create your contract review process.
There are three basic options:
- Use internal people resources
- Use external people resources
- Combine internal and external people resources
There are three main factors that should influence your decision:
- Number of contracts:
- For example, if you have a small set of contracts (<1,000) or if you are only concerned about the information contained in a few of the clauses, internal resources could be the right option.
- Depending on the level of complexity of the contracts and number of contracts to be reviewed, one or two reviewers can likely get through the review quickly.
- If your organization does not have internal resources available or has a voluminous amount of contracts, internal resources will likely not be sufficient to complete a review within a reasonable time. At this point, it’s time to bring in outsourced resources.
- Internal people resources: It’s important to remember that this option still costs budget because the review takes them away from their regular duties and often time their true value is much more ‘expensive’ than an outsourcing option.
- External people resources: Cost is dependent on the location of the service provider (offshore or near shore is typically less expensive than onshore), the amount of reviewers, the number of contracts and clauses, and the complexity of the contract. Through good partnership and open conversation, an experienced outsource provider will be able to provide you with accurate timelines and budget estimates.
Regardless of whether you’re using internal or external people resources or some combination, there should be a review protocol in place. You can assign resources that have familiarity with the contract types or create review protocols that allow resources that are not part of the contract management process to quickly learn the rules for the review. Whether you have 1 person or 100 people reviewing contracts, a review protocol is always a good idea because it allows you to transfer knowledge should initial reviewer(s) move on to a different priority or role.
If you’ve brought in outsourced resources, during the course of the review you’ll want to have an internal resource provide quality audit over the calls made by the reviewers. While the reviewers will be using guidelines set by your organization, it’s always a good idea to make sure they’re actually pulling what you want or you may find that your needs changed and you need them to change the review cadence a bit. Should a mass change be necessary it will be easily accomplished because you don’t need to look for exceptions because all of the extractions will be the same.
While the task of reviewing contracts can seem daunting at first, with the right managed service you can proceed with confidence that there is a light at the end of the tunnel.