But for a few dinosaurs still dictating from a hard-copy precedent, the rest of us have moved onto computerised precedents. For most of us, that means re-using existing client documents or perhaps pre-filling a few fields in an ‘automated’ precedent. Neither method is terribly exciting, or efficient.
Technology to aimed at improving the contract drafting process is rapidly developing. In this article we focus on some of the market-leading solutions, including document automation and contract management platforms.
1. iubenda and Clerky – Automated drafting
Selling template documents is one of many ‘disruptive’ legal technology business models. Companies like LegalVision have been selling them for years and top-tier firms are moving into the space by offering documents for free or little cost, such as through Allens A-Suite or Corrs’ Edge. But they still rely on the client completing the document and paying for tailoring or advice if required.
We’re focused on the next iteration of this business model – where the tailoring of those documents is largely automated through checklists and self-help guides. While currently limited to a few niche areas of law, we anticipate more disruptors will emerge.
1.1 iubenda – Privacy Policies
1.2 Clerky – Documents for start-ups
Offering automated legal paperwork for start-ups, Clerky currently provides company incorporation documents and is privately trialling automated fundraising and commercial documents (such as non-disclosure agreements and employment agreements). While currently only available in the US, Clerky shows considerable promise.
2. ClauseMatch, Contractually and Clause – Contract drafting and management platforms
While streamlining document creation is useful, that’s only one step of the process. Contracts still need to be negotiated, approved by your client and executed. Amongst the flurry of emails as completion approaches, many readers will be familiar with the difficulties of ensuring comments and mark-up are addressed. Fortunately there are now solutions to overcome the inefficiencies of trawling through your emails to keep track of your draft contracts.
Contract platform Contractually brings the entire contract lifecycle online. Drafting, review, approval and execution are managed online through a central portal. As the draft contract is hosted online it enables collaborators from outside your firm (such as your client or the counterparty) to participate as well. They just need to be invited to the contract – rather than requiring access to your document management system. Permissions can then be applied to ensure only certain users can create, edit, approve or sign contracts.
Significantly, Contractually overcomes the version control issues experienced by lawyers and ensures that all changes are made in a single location, with every change being tracked. Once the contract is agreed, e-signatures can be affixed through the platform – saving the need to collate signature pages or arrange for execution to occur through specialised software like DocuSign.
Conceptually similar to Contractually, ClauseMatch promises to revolutionise document creation and collaboration in the financial services industry.
ClauseMatch’s document platform allows multiple contributors to collaborate on documents together in real time. Permissions can be applied to specific paragraphs to hide parts of the document and each paragraph can be assigned to a particular person for approval. Everything is tracked too, enabling easy version control and, importantly, an audit trail. Finally, the data in documents within ClauseMatch can be exported to other systems, eliminating much of the manual handling (and introduced errors) of data which currently occurs in the financial services industry.
Although currently targeting the application of its technology to internal policies and contracts (in particular, OTC derivative contracts) the use cases for their technology are incredibly broad.
2.3 Clause – One to Watch
Clause is developing a platform to facilitate development of ‘intelligent contracts’. These are dynamic contracts which update in real time after receiving inputs from the internet (based, for example, on the occurrence of a particular event).
The Commonwealth Bank, Wells Fargo and Brighann Cotton are already trialling intelligent contracts – used last year for a shipment of cotton. As the cotton sailed from Texas to Asia, payment obligations were satisfied under the contract by automatic payment instructions being given through Swift as the shipment’s geographical location changed. All of this was made possible through Clause’s platform. You can read more about the trial here.
Blockchain-based ‘smart contracts’ are being touted as a way of disrupting lawyers. Clause’s platform will be a driving force behind that disruption.
3. HOTdocs – Template precedents made simple
For those readers who identify with simply reusing client documents as precedents, we haven’t forgotten about you. It’s easy to forget to change client-specific variables and introduce new errors into your work product.
If you don’t have the in-house means to automate those documents, one solution is HOTdocs. HOTdocs can be used to transform existing documents into template precedents, with users defining client-specific variables and, for certain variables, setting validation rules. It promises reduce your firm’s professional indemnity risk and saves time as introduced errors are resolved.
Once the template precedent is developed it can be hosted within Word, on your firm’s servers, in the cloud or on a website to enable easy document production by lawyers. Some users produce over 500,000 documents per month using templates prepared using HOTdocs.
With HOTdocs having more than 1 million users in 7,000 companies across 50 countries there are many client success stories. One law firm client is touted to have achieved a 94% reduction in processing time for real estate documents in a large firm, while a global bank achieved 100% accuracy in drafting facility letters.
Have you used any of the services featured in this article? What did you think?