Today’s corporate legal departments are looking to streamline and improve their contract management processes. In many cases, it makes business sense to hire a legal process outsourcing (LPO) provider to manage legal services contracts, agreement drafting, legal contract review, and legal document review work.
Contract Management Outsourcing Services
LPO service providers offer governance, compliance and risk management solutions that enable companies to avoid or reduce business and reputational risks. Some of the most commonly outsourced contract management processes include:
* Contract discovery and audit services
* Summary of the contract, red lines, wording
* Abstraction of contracts
* Governance, risk and compliance
* Management reporting services
* Online contract repositories
* Alert and notification services
* Complaint and dispute management
Management and abstraction of legal contracts
Legal departments and law firms alike have hundreds or thousands of paper contracts stored in filing cabinets or saved as spreadsheets. This type of storage system is cumbersome and does not guarantee that key dates and payment terms will be met and that certain key terms or clauses will be implemented. The process of manually storing, monitoring, extracting, and managing contracts is time-consuming, expensive, and fraught with risk. By outsourcing this function to an LPO provider that specializes in contract extraction and administration services, you can stay on top of the data contained in these contracts. Because LPO providers employ the latest technologies to carry out this process effectively, they are able to deliver summary documents to legal clients accurately and quickly.
Benefits of contract abstraction
Contract abstraction involves extracting important dates, clauses, and other relevant information from paper documents. This type of “legal coding” works by tagging all important terms, metadata, etc. in each contract. When it comes to long and complicated contract documents, the contract abstraction provides a concise view with all the important points highlighted, such as date, party name, expiration, renewal, and more. This saves valuable time and resources, increasing internal productivity and ensuring legal compliance throughout the contract lifecycle.
Additionally, through contract abstraction, documents are easier for non-lawyers to understand because important clauses and guidelines are highlighted. As a vital business function, contract management becomes more accessible and predictable for everyone.
In essence, contract abstraction helps companies make informed decisions about the contracts they sign. When contracts are abstracted, the essential details that mark the importance of a legal document come to light.
A true competitive advantage
Contract management has become a core competency critical to a company’s ability to operate efficiently and reduce legal risk. Organizations with mature contract management processes have a clear competitive advantage and seek to partner with legal process outsourcing providers to manage this essential activity.
