What is automated contract drafting?
Automated contract drafting is a key functionality that CLM tools offer to accelerate drafting. It uses artificial intelligence and machine learning to generate contract clauses and whole contracts from scratch. It brings joy to contract creation and eliminates a crucial but broken legal back-office workflow with AI automation and augmentation.
Research shows that a business with 1000 employees spends anywhere from $2.5 to $3.5 million searching for lost documents or getting them redrafted by a legal professional. According to World Commerce and Contracting, the average cost of a high-risk contract from drafting to execution stands at a dramatic $49,000 per contract. It’s like sending a wire transfer when you can Venmo. Given the nature of the work, contract management software is key to keeping pace with the speed, volume, and level of collaboration businesses need to transact.
What are the challenges of old-school contract drafting?
It is time-consuming : Manual contract authoring requires legal expertise, attention to detail, and multi-stakeholder review with email back and forth and version control nightmares.
It is prone to mistakes : Manual processes are vulnerable to human errors like typos, omissions, and incorrect clause placements which can have significant legal and financial repercussions.
It is inconsistent : Without standardized templates and clauses, inconsistency in language, format, and contracting policies can increase non-compliance risks.
It risks compliance : Non-standard contracting processes also run the risk of non-compliance and legal risks that can cause penalties.
It poses security threats : Frankenstein processes and contracts data across multiple tools and devices increasing the risk of data leaks.
It hinders collaboration : Tracking changes, consolidating feedback from multiple stakeholders, and version confusion add to multiple back-and-forths and the time burden.
It is expensive : Extensive legal review and the high cost of potential redrafting make the process redundant and wasteful.
Who benefits from automated contract drafting and how?
Enterprises, small businesses, startups, and solopreneurs can boost productivity and save resources with AI automation to streamline the contract creation workflow. This is especially a game-changer for specific departments across organizations of different scales and complexity. Employees have specific KPIs and deliver things within their scope of work.
Automated contract drafting makes it seamless for every employee resulting in a better counterparty experience and better business velocity. While driving organization-wide change from familiarity is hard, an interactive approach to digitizing the contract creation process is key to transformation.
Legal teams
AI contract drafting software can generate contracts in minutes with chameleon clauses and automatic styling. It can give in-house legal precedent to negotiate better with a shared brain for drafters, AI-powered redrafting, and a centralized contractual history. No more scrolling through high volumes of paperwork to find the meaning of defined terms or errors with AI drafting. Apart from contract drafting the CLM software can help to automate other legal tasks such as contract creation, document review, compliance checks, and case management.
Pre-approved clause libraries and templates that are both consistent and compliant ensure that legalops efficiency is reclaimed by 80%. Automated drafting is built-in with compliance checks and approval workflows that minimize errors and omissions, reducing the risk of penalties or disputes. Legal resources are preserved for more strategic work like risk assessment, negotiations, and advisory.
Non-legal teams
The sales, HR, procurement, and finance departments are empowered with a more collaborative, guided, and intuitive CLM process. Different teams are compelled to take ownership of generating routine agreements without legal dependence. This not only saves business costs on legal ops but improves employee morale and productivity in non-legal teams. It further minimizes human error, eliminates compliance risks, and saves time and money for hands-on legal review.
Sales teams can close deals faster with faster contract TAT and better customer satisfaction scores. Procurement teams can ensure both consistency and accuracy in vendor contracts for quality and timely deliveries. Better supplier relationships are conducive to more favorable terms, reduced costs, and enhanced collaboration.
The human resources team can process standard employee contracts in bulk to streamline recruitment and onboarding without the paperwork. For finance teams, automated contract drafting ensures built-in compliance checks and mandated guardrails for better contract risk management and cash flows.
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Book a Demo8 Essential features to automate your contract drafting
Contract drafting comprises crucial milestones that make sure an agreement is comprehensive, legally binding, compliant, and mutually beneficial for each party involved. Automating rote work along this process empowers the whole organization and counterparties with contracting structure and velocity. HyperStart AI-based contract management software offers a single comprehensive set of contract drafting tools to elevate your drafting experience through automation:
1. Template library
Pre-approved templates are dynamic digital assets that help you repurpose standard form agreements. There is no need to recreate the wheel for similar agreements, saving valuable time and resources.
2. Clause recommendations
Clauses function as legos to ensure consistency in terminology, grammar, style, cross-referencing, contracting policies, and other elements. They are designed to adapt to different environments and the library is built to be a shared brain of standardized clauses.
3. AI drafting
Assisted drafting allows users to draft and redraft clauses and documents with case-specific prompts and query contracts for key information. While AI-powered tweaking updates contractual language autonomously, it still requires human supervision.
4. Version control and counterparty access
A clear audit trail with version control features allows you to track changes and revisit previous versions if necessary while making sure each party involved is working with the current iteration of the agreement. HyperStart also offers secure counterparty access for faster review.
5. MS Word plugin
Eliminate switching between tabs and applications with automated templates directly from a browser-native MS Word plugin. This functionality is both familiar and simplified for automated contract generation.
6. Intake forms
The intake forms automate contract creation, making it much simpler and more efficient for employees, vendors, and suppliers to create a wide range of contracts like NDAs, MSAs, employee agreements, order forms, and so on. It empowers non-legal professionals to initiate routine contract requests and gather information.
7. Conditional rules
Conditional rules add another layer of automation. They dynamically adjust the contract based on the input, populating relevant clauses and sections based on specific form responses.
8. Bulk contract creation
High volumes of standard contracts can be initiated, processed, sent, and tracked with bulk actions. Bulk contract creation is a handy tool for HR and procurement teams that deal with multiple contracts, allowing them to pre-populate data and save significant time and effort.
What are the tech drivers behind automated contract drafting?
Artificial intelligence and machine learning
Natural language processing (NLP): NLP parses through complex legal texts, identifies key clauses, analyzes them, and suggests appropriate clauses based on pre-approved rules and standardized templates.
Predictive analytics: Machine learning models analyze a centralized repository to spot contract risks and predict outcomes and performance based on key clauses or non-compliance.
Intelligent document automation: This system automatically populates templates with key clauses, making them dynamic to fit specific contract requirements.
These elements together form a comprehensive contract intelligence system that enhances the efficiency, accuracy, and effectiveness of contract management.
Cloud Solutions & Integrations
Cloud computing: Cloud-based CLM platforms ensure that all contract data is securely stored and backed up. The systems can be accessed and scaled safely from anywhere for better collaboration among distributed or remote teams.
Integrations: Cloud-based CLM systems integrate with other business applications like CRM, ERP, and HRMS for frictionless data flow and alignment with other business processes.
Robotic process automation (RPA)
Automating repetitive tasks: This technology uses contract drafting software bots to automate duplicative, rule-based tasks, reducing the drafting time frame and manual errors. This is best for mundane work like data entry, contract formatting, and compliance audits so legal professionals can focus on more meaningful work.
Workflow automation: RPA also streamlines the workflow by automating routine contracts for review without delays or bottlenecks.
Process analytics and reporting
Dashboard insights: Key metrics like contract cycle times, approval times, time taken for review, and compliance rates can be tracked to continually optimize the contract process. A custom in-flight dashboard can offer real-time visibility into the contracting process and status to make sure KPIs are met.
Security technologies
Data encryption:Advanced encryption methods are crucial to keeping contract data safe in transit and at rest. Robust access controls, multi-factor authentication, and workflow mechanisms must reflect security measures for confidentiality and data integrity.
Why do businesses choose HyperStart to automate contracts?
At HyperStart, we speak to many legal teams with much room for improvement in their contracting processes. They have an undeniable appetite for better renewal tracking, competitive analytics dashboards, and frictionless pre-execution processes that can help them close deals faster.
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1. AI-powered metadata extraction
As our extractive AI models lead the force of innovation, their 99% accuracy has proved incredibly lucrative and efficient. It performs tasks that would otherwise take weeks and months to manually enter, track, and follow up on in mere minutes. You can automatically track contract expiration dates, liability exposure, and other key obligations. You can also automate reminder alerts to necessary stakeholders about upcoming obligations.
Beyond metadata extraction, HyperStart allows you to redline contracts quickly using AI-powered review and version control. Its intuitive in-app editor or Microsoft Word plug-in helps comment and suggest changes. Recently, HyperStart helped LeadSquared streamline its contract review process. Here is the testimonial of their legal head.
We took demos of around 5 CLM vendors and chose to use HyperStart. They were the only CLM vendor who had SOC2 compliance and met the criteria of around 22 parameters which we had evaluated them on.
Om Prakash Pandey
Head of Legal at LeadSquared
2. Central repository with a powerful search
The repository stores, organizes, and retrieves contracts in one secure, unified space. Bulk import contracts from Gmail, OneDrive, Google Drive, Salesforce CRM, or your local storage. Find the contract data you’re looking for in seconds. These centralized systems of intelligence are meticulously organized, easily searchable with powerful AI, SSO integrated, and end-to-end encrypted. No more file hunts with digital contract repositories.
3. Dashboards & Analytics
Visualizing contract data helps you decrease risk exposure with auto-generated reports. Understand your risk exposure with better contract visibility and avoid contract breach penalties. They help you manage obligations and avoid contractual risks like conflicts, penalties, and termination based on contract type, deadlines, recurrence, and criticality. Visual graphs help visualize critical data for easy consumption. Key functionalities include AI-powered extraction and analysis and proactive notification reminders. Proactive tracking prevents oversight, missed renewals, and contract risks.
4. Security
Legal tech adoption in AI across the world is seeing an uptake. The US and Canada lead the charge with larger conversations on data privacy and cybersecurity despite headwinds in pending regulatory policies, lack of trust, and budgets. HyperStart is hosted on AWS with ISO 27001:2013, SOC Type 2, and GDPR-compliant standards. Furthermore, you can set granular access to the contracts and define who works on them at which stage. With access control, your contracts are searchable, trackable, and safe.
5. Affordable
HyperStart is a no-brainer choice for many scaling organizations as you save up to 30% on your annual subscription. It is accessible and scalable, offering superior value at a fraction of the cost. You get to save money on consultant fees for set-up and support. You pay for the modules you use with no hidden fees. We’re contour custom pricing to make sure we tailor the solution to your business needs. Besides, you get to realize ROI 75% faster.
Ready to automate your contract drafting?
There is no lack of tech advances in contract drafting. The process can be fully automated with human intervention for a final review. AI automation and augmentation have proven incredibly efficient, performing hours and weeks of work in a few minutes. The landscape has never been this vibrant or crowded. With new product launches every week, it’s increasingly difficult for lawyers to assess which tools will work for them best.
As a product of HyperVerge, we build deep-learning AI engines that have processed 8+ million documents in the past 3 years in 190+ countries across 5 geographies. You can seamlessly import scanned or digital contracts from your inbox, CRM, or drive in minutes. Critical data is auto-extracted with AI and highlighted to repurpose so you can create contracts in 2 minutes.
Transform Your Contract Drafting Process With HyperStart
Generate accurate contracts in just 2 minutes using HyperStart’s dynamic templates and intuitive intake forms.
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