5 Reasons Why Legal Teams Should Be Using eContracts

If you are reading this, you are most likely frustrated by how we’re dealing with contracts today.

You feel appalled that we’re still dealing with contracts the same way today we did 20 years ago - through Word and PDF files.

You might be an in-house legal counsel yourself - or you might be an internal client.

You could be a Sales Rep, working closely with Legal on customer deals, or you might work in Procurement, or any other division that deals a lot with contracts (such as People/HR, Business Development, Partner Management, etc.).

Countless times, you have worked on the wrong version of an agreement. You’ve seen confidential agreements being sent to the wrong contacts. And you’ve waited, endlessly, for a negotiation between your company and the customer (or supplier, or partner) to complete - slowly progressing, through an endless back and forth of files.

And, you’ve been promised this would all end - with a shiny new contract lifecycle management software (CLM) that would make life easier.

But, as it turned out - it didn’t get easier, it got more complicated. The contract management tool required a lot of training to discover all of its functionalities, and you missed that (because you had actual work to do).

And because the tool was file-based, your company was still sending back and forth emails with contracts.

Is this simply the way it is then? Do we have to accept that negotiating, signing, and managing contracts will always be hopelessly inefficient and painful? Or is there a better way?

Luckily, there is.

In this post, we are going to discuss 5 of the most common contracting challenges for most businesses, and how next generation contract management companies like Canveo can help solve them.

1. Challenge #1: Managing Redlines in Word Is Too Slow
2. Challenge #2: Sending Back & Forth Word Files Is Insecure
3. Challenge #3: Your Existing CLM System Is Not Being Used By Your Business Team
4. Challenge #4: Keeping Control of the Company’s Risks Is Difficult When You Negotiate in Word
5. Bonus Challenge: Working with Word Files on Your Phone Is a Pain

Challenge #1: Managing Redlines in Word Is Too Slow

I have to use Microsoft Word…or do I?

Up until recently, Microsoft Word was the only option when it came to contract negotiation. There simply wasn’t any other tool out there that would do the job.

While we’ve always been bugged by its drawbacks, we grudgingly accepted them, knowing that there was no alternative (other than perhaps going back to pen and paper).

You probably know the issues we’re talking about:

• No automatic versioning: nightmarish file titles such as “Contract with latest customer_DRAFT_v23_updated liability clause_edited by Finance_23 September”;
• Working for hours, only to realize that you’ve worked on an outdated version of the contract;
• An incredible number of  comments on the right-hand side, requiring you scroll down to the next page to read a comment relating to the middle of the previous page;
• Forgetting to press “Enter” on a comment (such a great new feature);
• A collaborator who rejected your proposed insertion (where the heck has it gone?);
• Collaborators who don’t know Word (have you had someone underline their changes manually, and color them in red?).

Simply put - everything is manual and tedious.

This often leads to the Legal Team becoming a bottleneck within the company.

Unfair, because it’s not Legal’s fault - they’re being held back by outdated tools and processes. But hard to see from the outside, if you are a Sales Rep waiting for your contract to close.

While current contract management software may take care of the versioning, the negotiation and redlining still happens in Microsoft Word.

This gets you right back to square one, with all the drawbacks mentioned above.

So, how do we solve this?

eContracts to the rescue

Good contract management technology today is moving away from using Word for negotiation - instead, these platforms provide an online negotiation tool that is built for purpose.

CLM software that removes the limitations of Microsoft Word, while adding functionality that is tailored to the negotiation process.

Features such as enhanced commenting, improved change tracking, one-click version compare, time tracking, tools to help you focus on the open points, built-in legal guidance, etc.

This leads to massive efficiency gains, making the Legal Team look good not only internally, but also vis-a-vis customers and suppliers.

The truth of the matter is: Microsoft Word is a powerful program, but it was never purpose-built for contract negotiation.

We only really need a small subset of Word’s features to negotiate - but in addition to that, a lot of further functionality that Word doesn’t offer. Capabilities that are purpose-built for the negotiation process.

This is what e-contracts can offer - a fully digital, smooth user experience, helping you to agree easily on all open points with your counterparty, and  get to a clean, signable version in as little time as possible. Entirely digitally, outside of files.

Esignature tools like Adobe Sign, Docusign or Hellosign on the other hand only cover a very specific part of contract administration - the esigning of an old-style document.

E-contracts solutions cover the entire lifecycle of a contract. And they do so on a purpose-built, digital platform, without relying on files in Word or PDF format. In this sense, they are perfect Docusign alternatives.

Gone are the days where Sales complained about slow turnaround times from Legal.

Psst…digital contracts aren’t just for simple use cases anymore

A concern that’s often voiced: these platforms are nice, but they can’t handle my complex B2B enterprise negotiation use cases.

In the past, earlier versions of contract negotiation platforms had not been widely used, because they had been built with too simplistic use cases in mind.

They might have been appropriate for NDAs among small businesses, but they weren’t up to standard for complex documents and negotiations between experienced professionals on both sides. This made it impracticable to use them in the real world.

However, that’s not the case anymore.

When we created Canveo, a seamless user experience combined with everything needed for contract negotiation was our highest priority. We designed a system that’s incredibly easy to use, but capable of supporting even the most complex use cases of B2B negotiation.

Today, our electronic contracts platform is being used by companies in all industries, including law firms and major financial institutions.

Focus on what matters, and make changes within minutes - this is how we help Legal Teams to unbottleneck themselves. Book a demo of Canveo Today.

Challenge #2: Sending Back & Forth Word Files Is Insecure

Companies are still sending confidential contracts as email attachments.

Last time we checked, using email to share confidential documents wasn’t the most reliable solution out there, when it came to keeping your company’s information secure.

Contracts sent as email attachments can easily be intercepted by experienced hackers. And quite often, an email is simply sent to the wrong person, with disastrous consequences.

According to the UK Information Commissioner’s Office (ICO), around 40% of all data breaches are caused by someone sending an email to the wrong person. On average, about 7 emails a day were sent to the wrong recipient in 2021!

Email attachments can also be infected with malicious scripts and embedded software that pose a threat to the entire company.

“I could just use Google Docs for my contracts”, some people might say.

However, this is a less-than-ideal solution. Your counterparty will see your proposed changes instantly, before they are finalized and approved internally, which usually doesn’t work for a negotiation process.

Econtracts give you the best of both worlds

What negotiators need is a solution that removes the need of sending back & forth Word documents via emails, while at the same time protecting the negotiation privacy of all parties.

This is what e-contracts can provide. They maintain one single source of truth, having everyone work on the same agreement, while making sure that one party’s changes are only visible to the other once the pen has been turned to the other party.

This way, you can have and eat your cake too. You can make your edits and get your Finance’s, Ops’, Saless, and Tech Support’ approvals, before turning over the contract to your customer or supplier, for them to do the same.

And if you’re concerned that your customer may not be willing to work on such a negotiation platform, rest assured: our customers prove the opposite.

They have their large-enterprise counterparties work seamlessly on the Canveo platform - without any kind of training, and without requiring them to create any account.

That’s the intuitiveness of Canveo’s e contracts.

Challenge #3: Your Existing CLM System Is Not Being Used By Your Business Team

The risks of low end-user adoption

We’ve all been there: you’ve implemented a shiny new CLM system that will finally take care of all the challenges your Business is facing when it comes to contract management in procurement or sales.

Happily, you announce the good news. You ask everybody to use the new system from the kick-off date.

One week later, however, things are back to what they used to be before - you get legal requests from your Sales Team via email. Ugh!

According to Forbes, about 25 percent of technology projects fail outright; 20 to 25 percent don’t show any return on investment; and as much as 50 percent need massive reworking by the time they’re finished.

The problem with business software is often that it is not designed with the end user in mind. Overly-complex functionality is hidden behind clunky design, making it difficult to use and requiring a lot of training to get familiar with it.

How often have we all heard that the Sales Team doesn’t like to use the new CLM, because it’s not intuitive. (And we might have heard the same from the Legal Team, for that matter.)

The consequences are low ROI, heightened risks, shadow IT, and a sales or procurement contract management process that doesn’t scale, leaving the Legal Team in a struggle to keep up with the Business’ growth.

This is a problem for the management of both negotiated agreements and contract templates.

The key for internal adoption is intuitiveness

The best CLM platforms feel like using an app we use every day. Generally, contract management system features should not require any training, neither for the Legal Team, nor for the rest of the Business, nor for the counterparties.

They feature a design that feels natural and intuitive, and provide guidance only when it’s needed - just in time.

They also have to provide all of this without compromising on functionality. All capabilities required for contract management and negotiation must be included - surfaced right when the user needs them.

Those are the principles we committed to when we created Canveo. We designed an interface that is both simple and transparent, ensuring maximum internal adoption.

This helps our customers roll it out effortlessly across the whole Business, making sure we don’t become another software tool that isn’t being used.

Challenge #4: Keeping Control of the Company’s Risks Is Difficult When You Negotiate in Word

Dilemma: be risky, or be slow

Legal Teams face a tough choice: Should they keep ownership of contract negotiations, in order to maximally control the company’s risk?

Alternatively, should they offload part of the work to the Business Teams, in order to keep up with an ever-increasing workload?

As Legal Teams are notoriously understaffed, there is often no real choice: They have to delegate some of the work to the Business Team (e.g. Sales, Partnerships, Procurement).

However, if negotiations are done in Microsoft Word, this comes at a significant risk: in order to enable a Sales Rep to negotiate on the company’s behalf, Legal needs to unlock the document, allowing changes to be made by anyone with the document.

The Legal Team then loses control over what is eventually being negotiated into the contract.

The Business Team often lacks the experience to assess whether a particular change request by the customer or supplier - which may seem unproblematic at first sight - in reality creates substantial risks for the company.

Legal playbooks can’t solve the problem

Traditionally, Legal Teams had two options to deal with the problem: enforce a final check at the end before signing, and/or to provide the Business Team with legal playbooks.

However, neither option is good enough. It’s often too late to introduce significant changes right before signing. There is a serious risk of upsetting the prospective customer.

At the same time, playbooks provided by Legal remain notoriously untouched - they usually sit unused in some inbox or on the company’s intranet.

If we’re being honest, that’s quite understandable. If you’re scrambling to get a contract closed before the end of the quarter, you might not have the mindspace to search for the latest version of a playbook, find the right passage, and understand what the company’s policy is regarding a particular legal topic.

Contract automation software puts Legal back in control

There is only one solution to this problem: moving the contract negotiation process away from Word, onto a dedicated platform that is purpose-built for negotiation.

Sales contract management solutions should allow for fully customizable controls over what part of a contract the internal Business Team is able to edit.

As a result, the individual Business User would get clear guardrails, preventing her from making inadvertent mistakes.

This is what we’ve built at Canveo. Contract automation software that enables Legal Teams to offload a large part of the negotiation work to the Business, while providing enforceable and customizable guardrails.

Through econtracts, Legal keeps in control, but doesn’t become a bottleneck. The easiest way to 10x your leverage as a resource-constraint Legal Team.

Bonus Challenge: Working with Word Files on Your Phone Is a Pain

According to a report by Samsung, nearly 80% of IT executives said employees can’t do their jobs effectively without a mobile phone, and three-quarters said mobile devices are essential to workflows.

Nowadays, employees of all teams expect to be able to do their work on the go. It’s vital to react quickly once the contract comes back from your customer, in order to keep momentum. There isn’t time to wait until you are back at your desk.

However, legacy systems that handle contracts as Word or PDF files do not lend themselves well to mobile work. Or, when were you happy with the experience when you tried to edit a Word file on your phone?

Phones aren’t great at handling traditional file formats, and this impacts employee productivity.

That’s why the best contract management software is no longer file-based. Instead, they offer a fully digitized experience, allowing the user to get the same seamless experience across any device.

Since Canveo’s econtracts do not depend on word or PDF files, the solution offers an unprecedented ability to negotiate and manage contracts on the go. Whether you need to review your customer’s latest changes, add your own edits, or route for e-signature, or find a specific clause in a specific agreement, Canveo lets you do it on your mobile device.

Conclusion

We’ll leave you with this as a final thought:

In CRM, we no longer use files to manage our customers - we use dedicated software like Salesforce, or Hubspot, to reach 10x productivity gains.

In Accounting, we no longer use files to keep track of our company’s revenue and expenses - we use purpose-built software like Netsuite, or Xero, to streamline the process.

Isn’t it about time we started doing the same for contracts?

Are you ready to take your contracts to the next level? Book your Canveo Demo today!

About Canveo Ltd.

‍Canveo is a leader in contract automation software. With data centers located in Switzerland, it helps businesses all over the world digitze and streamline their contracting processes. Through its econtracts, it gives companies an easy way to create, negotiate, esign and manage agreements - dramatically reducing the time it takes to complete an agreement, with a fully digital and collaborative contract management platform. Designed as an intuitive and simple contract management software, it is capable of handling the most complex B2B use cases (including contract negotiation) - the perfect extension to electronic signature. This is CLM software for digital contracts.

‍www.getcanveo.com