Here you will find the answers to your questions about contract automation: what automated contract drafting means, how it works and where to start – everything explained based on a simple NDA template.
Clients and companies hire a lawyer to secure their businesses. Businesses expect lawyers to be super-heros who deliver hundreds of contracts free from potential lawsuits and financial losses and at the same time seamlessly and fast enough to close the deals. Like everyone knows, for businesses the deadline always came already yesterday.
Every minute counts and every mistake could cost thousands.
Taking responsibilities for massive risks and working under pressure 8-hours a day doesn’t really allow lawyers to do their best. They slow down all “urgent matters” because their primary focus is building a safety net for the entire organization. With systems like Word and email this just does not fly like a rocket.
Here is where contract automation comes in.
What does contract automation mean?
In essence, the value that any automation tool gives is freeing up users from repetitive manual work and helping them speed up their business processes. The same goes for contract automation: it helps lawyers to automate their templates for contracts and contract-related workflow to speed up the contract lifecycle. Advanced contract automation tools go even further – they do the job which is almost impossible to perform without automation like drafting hundreds of NDA-s within seconds for different parties, sharing and a signing flow – all trackable at your desk stop.
Contract automation means that all your document templates for different use cases are built into one single questionnaire flow. In this flow, every answer creates the right clause in the contract and interdependencies with the following clauses. Ultimately you will get a tailored contract by making the choices in the questionnaire.
Different contract automation tools work differently depending on their core logic. Some systems help only with the first draft automation (point solutions), others like Avokaado help you with the entire contract lifecycle management: approval process, negotiations, signing and with “after-signature” document management (end to end contract management process).
In advanced systems, data is inserted only one time and all formatting is automatic. You can automate different positions in your employment contract or different jurisdictions into one template or do both. Of course, first you should check the capabilities of the system. As Avokaado is clause-based, you could go very deep with your automation work – like automating contracts for different jurisdictions into bundles or solutions. A clause-based nature of the system also allows cross-using the clauses in different contracts and creating easily even the most complicated decision trees for your contracts.
To understand the essence of contract automation better, we’ll take the Avokaado workspace and a standard non-disclosure agreement as examples to show in detail and with pictures how you can automate a contract.
How to automate an NDA template?
1. Choose your NDA template (Word document) and upload it to the Templates.
As lawyers never start drafting the document from scratch but rather finding the best suitable previous document(s) similar to the current case, find your latest NDA for uploading. You should not worry that it is not perfect yet – with Avokaado to start the automation, the template does not have to be perfect and ready but you could level it up on-the-go with all possible scenarios, tooltips and descriptions. Just make sure your NDA template is in the latest .docx version and the headings formatted as Heading 1 for the successful upload.
2. Check now if your NDA document template is divided correctly into blocks.
Once your template is uploaded, a machine learning component in the system detects the clauses itself and you will get the view of your template blocks – each block is a clause from the Word document. If something is incorrect, you could copy the text and add the correct clause manually – same goes when adding the blocks later for creating interdependencies for clauses or possible contract scenarios (e.g clause for arbitration or for the national/local court).
3. Start automating block by block (clause by clause): add questions, choices and relations to other clauses.
Your task now is to go block by block (clause by clause): add data and questions there. All variables are cross-usable, ensuring that the data should be inserted only once. The beauty of contract automation is that you are able to insert many choices and multiple options into one clause. For example, depending on if the disclosing party is a company or private person you will need to think of further data input that a future drafter would need to insert. All possible choices are in one clause and based on this choice the further text body and questionnaire will be adjusted. In Avokaado, it’s called a dynamic decision tree.
4. Get one questionnaire flow that includes all your knowledge and possible contract scenarios.
By automating clause by clause you will get the automated version for tailored contract drafting. Basically what you’ve done is a questionnaire for the future drafters (clients, other business units) or yourself that will include all your knowledge inserted into one master template under each clause and in the right flow.
5. Start collaborating on your template: sharing, negotiation, approval and signing stages.
This is already the next step and relates to workflow automation. It starts with sharing your document (in Avokaado it is called A-doc) to other parties or your team members for editing/viewing, commenting, approval and/or for signing. You may choose either they could only view or also edit the document. Editing means that the collaborator is allowed to answer the unanswered questions and add missing data or make the available choices. It is also possible to share the totally unanswered templates to your team members or to the customers.
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What do lawyers get with automated contracts?
Automated contract drafting enables lawyers to scale their legal knowledge, improve risk management and build a safety net that enables non-lawyers to take over the contracting process in a controlled environment. This speeds up the entire corporation contract processing enormously so that lawyers have all chances to become super-heros of contract workflow. Peace of mind, feeling of success and more time to come up with creative legal solutions opens up lawyers’ professional potential to the tops.
Contracts based on the pre-lawyered templates are:
- Machine precise: with no human errors and untraceable changes;
- Perfectly formatted: all styles, references and tables change in accordance with a drafter’s changes;
- Logical content: the structure of a document always stays in accordance with the template you’ve created and no one can change, remove or replace data;
- The best knowledge only: all choices and new clauses automatically go to the template and whenever someone starts drafting your template you will be sure they’re using the latest version;
- Always lawyer-reviewed.
Avokaado is a pioneer in digitizing legal services. Our team is an expert in building DIY, knowledge management and collaboration platforms. 👉 Request a demo and we’ll show how you can start delivering cutting-edge solutions today.
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