Are manual contract creation processes leaving your legal team buried in low-value admin work? Find out to streamline the process in this guide.
What is contract creation?
Contract creation describes the process used to either draft or generate legal agreements. It involves capturing the terms, conditions, rights, and obligations that each party agrees to abide by in a legally binding document.
The speed and efficiency of this process varies from business to business. For some, it's a fast and efficient cycle that enables teams to generate contracts on demand. For others, it's a waiting game, with different stakeholders blocking contracts and slowing growth as a result.
If you fall into the second category, don't stress. This guide will explore actionable steps you can take to speed up the contract creation process in 2024. But first, let's debrief on what a manual contract creation workflow looks like and why it can be painful.
The manual contract creation process
How businesses approach contract creation will vary depending on the tools they use, how many contracts they manage, and who owns the process. However, a typical contract creation process looks a bit like this:
1. Initiating the contract
This stage involves identifying the need for a contract, whether it's for a new business relationship, a sales agreement, an employment contract, or any other purpose. This is usually done by reaching out personally to the legal team, or by submitting a contract request form.
2. Understanding the requirements
Once the need for a contract is established, the stakeholders involved gather information and clarify their objectives, expectations, and any legal or regulatory requirements that need to be addressed in the contract.
3. Drafting the terms
During this stage, the contract's terms and conditions are drafted based on the requirements and objectives identified in the previous step. This involves defining rights, obligations, responsibilities, payment terms, deliverables, and any other relevant provisions.
Contract terms are typically drafted by in-house legal teams, or by repurposing existing contract templates, depending on the legal function's size and capacity.
4. Reviewing the agreement
The contract draft will then be reviewed internally to make sure it is robust and aligned with business objectives. This is often the case when commercial teams draft the contract themselves since the legal team needs to make sure the terms adhere to certain guardrails and are compliant.
5. Finalizing the contract
The necessary revisions and adjustments are then made based on the feedback received during the review process. This may involve incorporating changes, clarifications, and any additional terms agreed upon.
Why is contract creation painful for businesses in 2024?
Contract creation isn't always smooth sailing. It can often be painful for legal and business teams, particularly if they're managing large contract volumes and don't have a repeatable process in place to create and manage them.
Common pain points include:
- Concerns about template usage: legal teams worry about commercial teams using incorrect or outdated contract templates, risking legal loopholes and inconsistencies.
- Legal teams are buried in low-value admin: lawyers are forced to invest most of their time drafting and reviewing contracts, distracting them from higher-value tasks.
- Blockers in sales and hiring cycles: commercial teams face delays as they wait for legal teams to draft, review and finalize contracts, slowing down deal closures and hiring cycles as a result.
Fortunately, there are plenty of things businesses can do to create contracts faster, and more efficiently. Let's explore a few of these now.
How to create contracts faster and more efficiently
1. Automate contract drafting with AI
One way to create contracts faster is to automate the drafting process using contract AI. AI-enabled contract tools like Juro empower businesses to quickly generate contract terms that are consistent with their guardrails and playbooks. This functionality eliminates the need for manual drafting and enables teams to revise and refine clauses in seconds, unlocking faster and more efficient contract workflows.
2. Set up templates for routine contracts
Another way to speed up the contract creation process is to set up robust contract templates for contracts you create often. These templates serve as starting points for routine contracts like SLAs, NDAs and vendor agreements, eliminating the need to start from scratch each time need a new contract.
Automated contract templates are particularly useful for this as they allow template owners to set rules and conditions in contracts. This means that clauses are automatically added, changed or removed when certain conditions are met.
3. Connect contracts with the rest of your tech stack
Integrating your contract tools with other business systems can significantly reduce the time you spend creating contracts. Connecting your contract management platform with tools in your tech stack like Salesforce or HubSpot eliminates the need for manual data entry by automatically pulling relevant information from your CRM system into the contract template.
As a result, you can create contracts faster, reduce errors, and ensure accuracy in your agreements. You can also generate contracts in just a few clicks.
4. Implement a contract playbook
You can also streamline the contract creation process by implementing a comprehensive contract playbook that outlines best practices, guardrails, and approved processes for contract drafting and management.
By capturing this information in an accessible contract playbook, you enable commercial teams to self-serve confidently on contract creation, rather than waiting for legal teams to answer these queries on an ad hoc basis.
You can also reduce the time legal teams spend fixing errors and inconsistencies that legal teams during the review process by getting contract terms right first time.
Automate contract creation with Juro
Juro's AI-enabled contract management software enables businesses to do all of the above, and more. Juro users can generate watertight contracts in just a few clicks, either from their key business systems, or by filling out a simple Q&A form to populate the contract.
It takes the sales team four clicks to generate and approve a contract in Juro - Callum Hamlett, Senior Rev Ops Analyst, Paddle
Not only does this automate routine contract admin for busy legal teams, but it also enables commercial teams to self-serve on routine contracts with confidence, meaning fewer delays and more time to focus on higher-value projects.
Instead of waiting four days for legal follow-ups, the sales team often get same-day approval on contracts - Alicja Kwiatowski, Head of Legal, Iptor
To find out more about how Juro can transform the way you create and manage your contracts, fill in the form below to book a personalized demo.