Redlining’s meaning varies depending on the context, but for the purpose of contracts, redlining is the process of making changes and revisions to legal documents. Each party makes their ‘redlines’ as part of the negotiation process, and decides which to accept or reject.
Once agreement is reached on the redlines, the parties are ready to move forward and sign the contract.
There’s a different meaning to redlining in the context of historical discriminatory practices - read more about that here. In the legal context, redlines are called redlines because they used to be made in red on the physical document. This is the kind of redlining we’re concerned with, and which can now be done in-browser with contract automation software.
Digital redlining
Just as electronic signature has replaced wet signature for modern businesses, so the redlining and negotiation process has changed to reflect digital collaboration between teams.
Redlining on the same physical document is obviously unsuitable for modern businesses, regardless of the enforced remote working encouraged by the COVID-19 pandemic. It’s inefficient and risky to have to physically work on the same pieces of paper.
But the replacement workflow for redlining takes place largely in Microsoft Word, which is also unsuitable for modern businesses, particularly if contract volumes increase. Microsoft Word does provide some helpful features - its tracked changes appear as red lines in the user interface - but as a tool built on static files, it lacks collaborative features.
It might not be a physical document, but contract users collaborating on redlines in Word still need to swap the same file between them. This creates problems, because users have to:
Send files via email: this introduces delay
Navigate version control: this creates confusion as different versions persist
Find a way to sign: Word isn’t a contract platform, and it lacks functionality for the rest of the contract lifecycle.
Google docs is a browser-based digital document format that offers some advantages over Word, but is ultimately unsuitable for contracts too. Collaboration in Google docs is limited, and unless parties select the right options for tracked changes, it can be difficult to keep up with edits and negotiations.
Find out more about how to redline in Google docs, and its limitations when it comes to collaboration between legal teams.
With these two formats unsuitable for collaborative redlining in-browser, at scale, legal teams are increasingly turning to dedicated software for redlining contracts. If you'd like to try it for yourself, hit the button below. Otherwise read on to find out more.
Contract automation software is designed specifically for legal workflows, which means it offers certain features that word processing tools - however collaborative - don’t. Here’s an illustration of how redlining software works in Juro.
1. The user shares the contract with the counterparty
When a contract is ready, from its owner's point of view, they hit 'Share' and send the draft link to their counterparty. This link can be used to preview, share or negotiate the contract before it's ready to sign.
2. The counterparty starts redlining
In this case, the counterparty has challenged a couple of points in the contract. The user is notified that contract data has changed, and refreshes to see that:
They changed the termination period from 30 to 90 days; and
They made a comment about the renewal period.
The change to the termination period reflects as a green addition below, with the previous text surrounded by red (it's a redline, after all).
If we look in the sidebar, we can see the termination redline appearing as a suggestion. We can also see the substance of the renewal period comment - the counterparty is asking if the contract will auto-renew.
3. The user accept or rejects redlines
To accept the termination period change, the user just ticks 'Accept':
... and for the comment, they can either reply to the thread and have a conversation in the sidebar, or just resolve the comment if it's been discussed offline:
There might be dozens of redlines in the document, so if the user wants to navigate from the redline in the sidebar to the relevant point in the document, they just click the link next to the comment and they'll be taken to the right place in the contract:
The benefits of redlining software
Using dedicated software to redline contracts rather than a mixture of Word or Google docs and emails has various advantages:
Version control: by working on a digital document, rather than a static file made of unstructured data, version control is no longer an issue. Instead of hopping between files, you can just scroll back through the timeline to see changes.
Negotiation data: the contract automation platform creates and keeps a full audit trail of which changes were made, by whom and when. With a static file, this data is lost for good when you convert it to PDF for signing.
Approval workflows: some stakeholders don’t need to be in the detail of the negotiation, but need to approve final contracts before they’re signed. A contracts platform like Juro allows you to assign the right roles to the right people.
A truly digital contracting solution creates a contract data pipeline, so redlining data can flow in and out of other systems of record, like Salesforce or Workday. If key functions like sales and HR are digital-first and browser-based, then contracts should be too.
Other contract negotiation considerations
A frictionless redlining experience in-browser isn’t the only way to speed up contract negotiations.
Simplifying your contracts and optimising them for signature is a quick win that should reduce the end-to-end time it takes for you to close contracts. Here are some tactics you can try:
Soften your terms: if a certain clause is always negotiated, and you almost always concede, can you just change it to make deals happen faster?
Make your contracts readable: remove excess legal jargon, think about information design and use visual elements to make your contracts more attractive
Mobile eSignature: make sure your counterparties can sign on any device by choosing a platform with mobile-responsive, secure electronic signature
Redlining software: where to start
If you’ve reached the limitations of what’s possible in Google docs, it might be time to explore free redlining software. Juro accounts start from free - and the solution is regularly highlighted as the easiest to use in its category, making adoption fast and seamless (read reviews here).
If you think your redlining software needs extend beyond a small deployment, it might be worth talking to a specialist to find out about a larger-scale solution. If that’s you, fill in the form below to find out more now.
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Redlining’s meaning varies depending on the context, but for the purpose of contracts, redlining is the process of making changes and revisions to legal documents. Each party makes their ‘redlines’ as part of the negotiation process, and decides which to accept or reject.
Once agreement is reached on the redlines, the parties are ready to move forward and sign the contract.
There’s a different meaning to redlining in the context of historical discriminatory practices - read more about that here. In the legal context, redlines are called redlines because they used to be made in red on the physical document. This is the kind of redlining we’re concerned with, and which can now be done in-browser with contract automation software.
Digital redlining
Just as electronic signature has replaced wet signature for modern businesses, so the redlining and negotiation process has changed to reflect digital collaboration between teams.
Redlining on the same physical document is obviously unsuitable for modern businesses, regardless of the enforced remote working encouraged by the COVID-19 pandemic. It’s inefficient and risky to have to physically work on the same pieces of paper.
But the replacement workflow for redlining takes place largely in Microsoft Word, which is also unsuitable for modern businesses, particularly if contract volumes increase. Microsoft Word does provide some helpful features - its tracked changes appear as red lines in the user interface - but as a tool built on static files, it lacks collaborative features.
It might not be a physical document, but contract users collaborating on redlines in Word still need to swap the same file between them. This creates problems, because users have to:
Send files via email: this introduces delay
Navigate version control: this creates confusion as different versions persist
Find a way to sign: Word isn’t a contract platform, and it lacks functionality for the rest of the contract lifecycle.
Google docs is a browser-based digital document format that offers some advantages over Word, but is ultimately unsuitable for contracts too. Collaboration in Google docs is limited, and unless parties select the right options for tracked changes, it can be difficult to keep up with edits and negotiations.
Find out more about how to redline in Google docs, and its limitations when it comes to collaboration between legal teams.
With these two formats unsuitable for collaborative redlining in-browser, at scale, legal teams are increasingly turning to dedicated software for redlining contracts. If you'd like to try it for yourself, hit the button below. Otherwise read on to find out more.
Contract automation software is designed specifically for legal workflows, which means it offers certain features that word processing tools - however collaborative - don’t. Here’s an illustration of how redlining software works in Juro.
1. The user shares the contract with the counterparty
When a contract is ready, from its owner's point of view, they hit 'Share' and send the draft link to their counterparty. This link can be used to preview, share or negotiate the contract before it's ready to sign.
2. The counterparty starts redlining
In this case, the counterparty has challenged a couple of points in the contract. The user is notified that contract data has changed, and refreshes to see that:
They changed the termination period from 30 to 90 days; and
They made a comment about the renewal period.
The change to the termination period reflects as a green addition below, with the previous text surrounded by red (it's a redline, after all).
If we look in the sidebar, we can see the termination redline appearing as a suggestion. We can also see the substance of the renewal period comment - the counterparty is asking if the contract will auto-renew.
3. The user accept or rejects redlines
To accept the termination period change, the user just ticks 'Accept':
... and for the comment, they can either reply to the thread and have a conversation in the sidebar, or just resolve the comment if it's been discussed offline:
There might be dozens of redlines in the document, so if the user wants to navigate from the redline in the sidebar to the relevant point in the document, they just click the link next to the comment and they'll be taken to the right place in the contract:
The benefits of redlining software
Using dedicated software to redline contracts rather than a mixture of Word or Google docs and emails has various advantages:
Version control: by working on a digital document, rather than a static file made of unstructured data, version control is no longer an issue. Instead of hopping between files, you can just scroll back through the timeline to see changes.
Negotiation data: the contract automation platform creates and keeps a full audit trail of which changes were made, by whom and when. With a static file, this data is lost for good when you convert it to PDF for signing.
Approval workflows: some stakeholders don’t need to be in the detail of the negotiation, but need to approve final contracts before they’re signed. A contracts platform like Juro allows you to assign the right roles to the right people.
A truly digital contracting solution creates a contract data pipeline, so redlining data can flow in and out of other systems of record, like Salesforce or Workday. If key functions like sales and HR are digital-first and browser-based, then contracts should be too.
Other contract negotiation considerations
A frictionless redlining experience in-browser isn’t the only way to speed up contract negotiations.
Simplifying your contracts and optimising them for signature is a quick win that should reduce the end-to-end time it takes for you to close contracts. Here are some tactics you can try:
Soften your terms: if a certain clause is always negotiated, and you almost always concede, can you just change it to make deals happen faster?
Make your contracts readable: remove excess legal jargon, think about information design and use visual elements to make your contracts more attractive
Mobile eSignature: make sure your counterparties can sign on any device by choosing a platform with mobile-responsive, secure electronic signature
Redlining software: where to start
If you’ve reached the limitations of what’s possible in Google docs, it might be time to explore free redlining software. Juro accounts start from free - and the solution is regularly highlighted as the easiest to use in its category, making adoption fast and seamless (read reviews here).
If you think your redlining software needs extend beyond a small deployment, it might be worth talking to a specialist to find out about a larger-scale solution. If that’s you, fill in the form below to find out more now.
Redline contracts in your browser.
No more time wasted chasing tracked changes around Word.
When it comes to contracts, legal teams want to be enablers, not blockers. How can you tell if your contract process is broken, and how do you fix it so legal and business teams can get to revenue faster by collaborating effectively?
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