Today’s corporate legal departments seek 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 service 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 audit and discovery services
* Summary of the contract, red lines, wording
* Contract abstraction
* Governance, risk and compliance
* Management reporting services
* Online contract repositories
* Alert and notification services
* Management of claims and disputes
Management and abstraction of legal contracts
Both legal departments and law firms 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 are met and that certain key terms or clauses are implemented. The process of storing, monitoring, extracting, and managing contracts manually is time consuming, expensive, and fraught with risk. By outsourcing this function to an LPO provider that specializes in contract management and abstraction services, you can be aware of the data contained in these contracts. Because LPO providers employ the latest technologies to carry out this process effectively, they can 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 the important terms, metadata, and so on. in every 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, part name, expiration, renewal, and more. This saves valuable time and resources, increasing internal productivity and ensuring legal compliance throughout the entire contract life cycle.
Furthermore, through the abstraction of the contract, documents are easier for non-lawyers to understand because important clauses and guidelines are brought to the fore. 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 are looking to partner with legal process outsourcing providers to manage this essential activity.