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Don’t Trust Your Contract Clause Library? Try Template Rationalization

Posted on May 21, 2024 in Blogs, Contract Analysis Services


As in-house counsel, there’s always an expectation to maximize your time and effort. However, not every request for legal input will be a cost-effective use of your time.

Take contract review, for example. Some agreements require a nuanced and tailored approach to drafting and negotiation. Other agreements, once written, can be repeatedly reused as templates without major alterations. But if team members make material changes to otherwise routine contracts, it creates more work in the present and causes the template library to expand unchecked.

If your law department is ready to streamline, standardize, and simplify your contract management process, then you’re likely close to eliminating this issue. However, one of the first things to prioritize should be template rationalization, and Legalpeople can help maximize your results.

Template Challenges that Our Solution Can Fix

Contract templates are meant to accelerate business and legal reviews, offering formulaic agreements for predictable circumstances. The standardization of the documents allows you to spend time on modifying deal-specific business terms without needlessly scrutinizing settled legal positions.

If your company has a consistent legal stance and language for certain agreement types, like nondisclosure agreements, employment agreements, or even commercial sales agreements, you can create streamlined templates to facilitate contract drafting and negotiations. That way, you can focus your time on more complex and business-critical agreements like customer contracts (which may have highly negotiated business terms).

However, even in the most routine contracts, redundancies and inconsistencies can develop as iterations and contract families proliferate, bogging down legal department productivity in the process. For instance, problems arise when enterprises lack a centralized repository for their contract templates. If various agreements live on local drives, unauthorized file hosting sites, or in individual email mailboxes, then modifications to the document outside of established legal processes are bound to occur.

Sometimes, individuals take it upon themselves to update contracts to close the deal with potential customers and then continue to use their modifications going forward. A rogue salesperson with just enough legal knowledge is a dangerous thing.

The result can create loopholes, multiple interpretations of the same template, or invalid agreements that capsize deals. Rationalizing and streamlining contract templates empowers your legal department to control and curb noncompliance or high-risk decisions, but only if you can quickly, efficiently, and in a trustworthy manner review your universe of contracts.

How You Can Benefit from Contract Rationalization

Legalpeople can simplify your template rationalization efforts. Our process tackles the problem head-on through a comprehensive audit of existing agreements to identify the redundancies, inconsistencies, and legal risks.

Once you have identified the contracts you want us to review, we upload them into an AI-powered platform, segmenting each agreement or template into sections to further compare for textual differences at a section level (think confidentiality provisions, intellectual property ownership, etc.)

After completing our analysis, we generate a detailed report of redlines that provides insights into clause similarities and differences. The report allows us to identify clauses that serve as the gold standard (or the preferred language) that best aligns with organizational goals. Simultaneously, we can quickly identify any fallback language across all the provisions.

The last step is to compile the findings into a comprehensive clause playbook, which outlines the standard language across similar templates, any deviations from the standard, and provides the applicable coding for each template provided.

By using AI and human attorneys throughout the process, the contract analysis process is scalable, efficient, and accurate. Your organization can quickly take the steps to implement the findings from the actionable contract insights, maximizing your time and effort with trustworthy data.

Are you ready to enhance your contract clause library? Our contract rationalization services can help you find your gold standards faster and with greater accuracy.


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