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 developed with machine learning are making people's work lives more comfortable. One such example of 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, and hard copies being tossed around for changes. This entire process is time-consuming and taxing businesses with a tremendous turnaround time to execute a single contract. Since businesses are the sum of their contracts, the legacy contracting process could not keep pace with the rapid pace of business development. It had to transform.
With electronic contracts moving to the forefront, agreements began to be generated digitally, and the cumbersome paper trail went online. The e-contracts streamlined the entire legacy process into software that required only a computer to operate.
Let's take an in-depth look at how e-contracts have revamped the legacy contracting process.
E-Contracts vs. Legacy Contracts
Available Templates
Digital Contracts: Based on user needs, various templates for a good contract are made available online. Parties to the contract select a template that best fits them and fill in the required details without drafting the entire 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. For every proposed change during negotiations (if any), a new draft must be prepared. 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 parties' effort 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 also not be possible to meet owing to various reasons. This could further delay finalizing the contract. This entire set-up becomes impossible if a pandemic strikes (again)
Eliminates Errors
Online Contracts: The risk of human error is eliminated because theentireprocess 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 chance of human error. (Just like you misread 'chance')
Low Transaction Cost
Digital Contracts: Costs such as paper, ink, printing, and other overhead charges are excluded because the only required medium is electronic at both ends.
Legacy Contracts: Costs that include labor, materials, and actual implementation also increase. The effort required to send out copies to each party also adds 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, tracking changes and edits becomes easy. With our CLM, you can keep an eye on changes in a draft using our redlining feature.
Legacy Contracts: As we saw earlier, face-to-face meetings can be delayed for numerous reasons, and 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 with your contract metadata.
Legacy Contracts: The reason legacy contracts could not keep up was primarily data management. Imagine a scenario where you initiate and execute numerous agreements daily. Manually tracking the entire lifecycle of each contract, including any renewals, is not a humanly effective task. Data management is thus a significant shortcoming of the legacy contract process.
So, we saw the benefits of electronic contracts over traditional contracts. In conclusion, E-contracts save time and money and are more efficient than paper-based contracts. The process for digital legal documents cannot be altered, which helps prevent fraud 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 way ahead.
Maitreyee works as a content writer on the team. She is a lawyer by education and is passionate about creating content for the legal community that is relevant and thought-provoking.
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