The digital revolution is not approaching- it’s already here. New inventions and technologies are making their mark in every sector you can think of. AI-powered tools and processes designed with the help of machine learning are making people’s work-life more comfortable. One such example to undergo a technological upgrade is the legal sector in the form of e-contracts. The legacy contracting system has been replaced with a digitized process.
Traditional or legacy contracting involves numerous in-person meetings, negotiations, hard copies being tossed around for changes, etc. This entire process is time-consuming and taxing businesses with a tremendous turnaround time to execute a single contract. Since businesses are a sum of all their contracts, the legacy contracting process could not keep up with the rapid pace of business development. It had to transform.
With electronic contracts making their way to the forefront, agreements began to be generated digitally, and the cumbersome paper trail went off-board. The e-contracts streamlined the entire legacy process into software that just needed a computer to work.
Let’s see in-depth how e-contracts have revamped the legacy contracting process.
E-Contracts vs. Legacy Contracts
Available Templates
- Digital Contracts: Based on the need of the users, different types of templates required for a good contract are made available online. Parties involved in the contract select a template that fits them the most and fill in the required details without writing the entire content of the contract. E-signatures can also be added to these contracts very easily. One such platform to provide easy e-contracting is our CLM. Here, you can easily modify the templates to your needs.
- Legacy Contracts: Unlike e-contracts, the entire contract content is written by a person to align it with the requirements. With every proposed change during negotiations (if any), a new draft has to be redrafted. This could take weeks together for the contract to reach the execution stage.
Easy to Use
- Electronic Contracts: Using ready-to-use templates for contracts drastically reduces the effort of parties to a bare minimum. This makes it almost effortless to draft an agreement.
- Legacy Contracts: While following the traditional contracting process, in-person meetings and negotiations take up a lot of time. It may not also be possible to meet owing to various reasons. This could further result in more delays in finalizing the contract. This entire set-up becomes impossible if a pandemic strikes (again)
Eliminates Errors
- Online Contracts: Chances of human error are eliminated as the whole process runs on automated modules. With our CLM templates, all you need to do is fill in the blanks and not worry about spelling or grammar checks.
- Legacy Contracts: The content is penned down by a legal professional who requires time and a specific skill set. It increases the chnace of human error. (Just like you misread ‘chance’)
Low Transaction Cost
- Digital Contracts: Costs like paper, ink, printing, and other overhead charges all get excluded since the only required medium is electronic at both ends.
- Legacy Contracts: Costs that amount to labor, material, and actual implementation also increase. The efforts needed to send out copies for each party involved also add to the cost.
Effortless Negotiations
- Electronic Contracts: With negotiations being an inseparable part of the contracting process, both parties must reach an agreement. Apart from being crucial, it is also one of the most time-consuming phases of a contract. With a single-window platform for all parties to collaborate, keeping track of changes and edits becomes easy. With our CLM, you can keep an eye on what changed in a draft with our redlining feature.
- Legacy Contracts: As we saw this earlier that face-to-face meetings can be delayed for numerous reasons, the process of negotiations seems never-ending in legacy contracts
Data Management
- Online Contracts: Contracts don’t come alone. They bring with them a colossal amount of data in the form of party-wise information, clauses, dates of general importance, and much more. Keeping track of all such contracts that you are connected to then becomes a challenging task. But with an integrated online platform, search and action become an easy task. With our CLM, you get a searchable repository that you can configure and search using the metadata of your contract.
- Legacy Contracts: The reason why legacy contracts could not keep up was primarily because of data management. Imagine a scenario where you initiate and execute numerous agreements daily. Manually keeping track of the entire lifecycle of each contract along with renewals, if any, is not a task that’s humanly effective. Data management, thus, is a significant shortcoming of the legacy contract process.
So, we saw the benefits of electronic contracts over traditional contracts. And in conclusion, we can say that E-contracts save time and money and are more efficient than paper-based contracts. The process involved in digital legal documents cannot be changed, which keeps you from fraudulence or cheating. The benefits of online contracts are attracting people to choose them instead of paper contracts.
Modern businesses are now moving ahead and opting for e-contracts to improve their business health. Soon e-contracts would be the only ahead.
