How to make contracts more human
Contracts - a word that often sounds scary, although we also know them as the cornerstone of closing business deals, the glue that binds partnerships, and the roadmap to success. Yet, in the labyrinth of legal jargon and convoluted clauses many individuals, including lawyers, find themselves frustrated by the complex language, cumbersome processes, and lengthy negotiations that contracts entail.
In fact, a study by IACCM revealed that a staggering 83% of people are dissatisfied with the contract process. It's time for a change, and today we will be learning how to make contracts more humane. By following these steps, you can improve the contract experience for all parties involved, streamline the negotiation process, and foster stronger business relationships. Let's dive in!
Embrace clarity
Legal documents have long been known for their convoluted language and excessive length. But simplicity and clarity should not be optional in the contract creation process. Lengthy contracts are often a turn-off for individuals who are asked to read and understand them. To avoid overwhelming your counterparts and make the process of signing easier, always try to make your contracts shorter and more straightforward.
While it may be challenging to avoid dense legal information entirely, complicated wording and standardized clauses can often be eliminated without sacrificing the effectiveness of the contract. By reducing the length and stating conditions in a more concise way, you can create contracts that are more reader-friendly and easier to comprehend.
One easy win is simply to make legal documents shorter. Of course, sometimes it’s impossible to avoid dense legal information, but more often than not, boilerplate wording and standardized clauses add no real value and denigrate the contract experience — Richard Mabey
Additionally, consider providing summaries or executive overviews of contracts to help people grasp the key obligations and rights outlined in the document. By condensing complex legal terms into clear and concise language, you can enhance the overall readability and hence speed of reviewing contracts.
Tailor templates for effective communication
Historically, contracts have been written by lawyers, for lawyers, often neglecting the needs and understanding of the individuals they’re meant to serve. To create truly effective contracts, it’s essential to consider the intended audience and tailor the content accordingly. Contracts should be useful and engaging instruments that express business relationships, rather than a way to confuse your potential partners.
For example, when drafting an employment contract for a candidate with no legal background, it's crucial to provide clear and straightforward information about their obligations and rights. Random references to legislation or complex legal terminology can hinder their understanding and create unnecessary confusion.
By adopting a more user-centric approach, you can create contracts that are accessible to individuals from various backgrounds and levels of legal knowledge. Consider using plain language, defining key terms, and organizing the content in a logical and user-friendly manner. This will empower all parties to understand and engage with the contract more effectively. Luckily, today business owners can make use of tools like Enty’s contract service, where they can get a quick contract summary, and even get a score of the effectiveness of a contract.
Continuously improve templates based on data insights
In many organizations, contract templates are created by external counsel, often using standard clauses that may not adequately address the specific needs of internal clients. To enhance the effectiveness of your templates and streamline negotiations, it's crucial to iterate on them over time. Data-driven insights can play a significant role in this process.
By analyzing contract data, such as frequently negotiated clauses and areas of contention, you can identify opportunities for improvement. You can then refine your templates and make them better aligned with your business needs. This will also reduce the time needed for review, and help in more effective negotiations. This approach ensures that your templates evolve to meet the changing demands of your organization and clients.
Foster collaboration in contract workflows
The back-and-forth between legal and business teams has long been a source of friction in the contract process. To ease the tension and build better working relationships, it's essential to foster collaboration throughout the contract workflow.
Transparency is key. By making contract data easily accessible to all stakeholders, you can provide visibility into the progress of contract negotiations and prevent unnecessary delays. Tools like Enty allow you to manage contract-related processes more efficiently, creating an inclusive and collaborative environment.
To further streamline collaboration, integrate contract templates with existing systems used by business teams. For example, if your organization utilizes Salesforce or Slack for internal communications, consider integrating contract workflows into these platforms. By aligning contract management with existing workflows, you can improve efficiency and ensure seamless collaboration between legal and business teams.
Harness the power of structured contract data
One of the biggest challenges in contract management is dealing with unstructured data. Contracts typically contain critical information such as party names, clauses, renewal dates, and more, but extracting and utilizing this data efficiently can be a daunting task.
To overcome this challenge, organizations can leverage automation tools to extract data from existing contracts. These will usually use machine learning algorithms to identify and categorize important data points. Alternatively, contract management software like Enty allows you to structure and extract data as contracts are created. This shift from manual processing to automated, data-driven processes enables organizations to optimize contract management and ensure a more efficient and transparent experience for all parties involved.
Leverage AI for contract creation and review
Artificial intelligence (AI) can play a significant role in making contract creation and review more efficient and accurate.
Enty utilizes AI to review and even generate contracts, although you can also benefit from 10s of templates that we created together with professional lawyers. By leveraging the new technology, organizations can expedite the contract creation process, reduce errors, and ensure consistency across various contracts. Additionally, AI-powered contract review tools can analyze contracts for potential risks, inconsistencies, and compliance issues, saving time and resources for legal teams.
By incorporating AI into the contract management workflow, you can streamline processes, improve accuracy, and enhance the overall contract experience for all stakeholders.
Develop standardized contract workflows
Standardizing contract workflows is essential to ensure consistent processes and minimize errors or bottlenecks. By defining clear steps, roles, and responsibilities within the contract management process, organizations can streamline operations and improve efficiency.
Consider creating standardized workflows that outline the necessary steps from contract creation to signature and beyond. This can include stages such as contract drafting, internal reviews, external negotiations, and final approval. By establishing clear guidelines and automating workflow steps, organizations can reduce delays, improve collaboration, and increase overall productivity.
Invest in user-friendly contract management software
To fully optimize the contract management process, organizations should invest in quality software that helps to manage the contract process. Platforms like Enty offer a range of features and functionalities designed to simplify and streamline contract-related activities. For instance, you can even find out what contract is needed for your business, and create it in a few clicks.
Enty contract management service provides intuitive interfaces, customizable templates, and robust reporting capabilities. Don’t forget to ensure that the software you choose integrates seamlessly with other essential business tools, such as CRM systems or project management platforms. This integration allows for a more cohesive and efficient workflow, reducing the need for manual data entry and improving data accuracy.
Prioritize security and compliance
When working with contracts, security and compliance should always be top priorities. Ensure that your contract management software adheres to industry-standard security protocols and follows best practices for data protection. This includes features such as data encryption, secure storage, and user access controls.
Furthermore, stay up to date with relevant regulations and compliance requirements in your industry. By proactively addressing legal and regulatory obligations, organizations can mitigate risks and ensure that their contract processes align with applicable laws and guidelines.
Offer training sessions or workshops to familiarize users with contract management software, standard workflows, and best practices. Provide ongoing support and resources to address any questions or issues that may arise. By empowering users with the necessary knowledge and tools, you can ensure a smooth and successful contract management experience.
Continuously evolve and adapt
The contract management landscape is constantly evolving, driven by technological advancements and changing business needs. To stay ahead of the curve, organizations must continuously evolve and adapt their contract management processes.
Regularly review and assess your contract workflows, templates, and software solutions. Embrace feedback from users and leverage data insights to identify areas for improvement. By embracing a culture of continuous improvement, organizations can enhance their contract management practices and deliver a better experience to all stakeholders involved.
Fostering a human-centered contract culture
Ultimately, creating human-friendly contracts is not just about optimizing processes or leveraging technology—it's about fostering a human-centered contract culture. This involves recognizing the importance of contracts as crucial touchpoints in business relationships and prioritizing the needs and experiences of all parties involved.
By adopting a user-centric approach, simplifying language, and embracing transparency and collaboration, organizations can create contracts that enhance understanding, build trust, and foster stronger business relationships. Remember, contracts are not just legal documents—they are powerful tools for effective communication and relationship management.
Last thoughts
Creating human-friendly legal contracts is essential to improve the contract experience for all parties involved. By embracing brevity and clarity, tailoring templates for effective communication, and employing other strategies described in this article, you can transform an organization's contract management processes in no time.
Streamline the contract process, enhance collaboration, reduce risks, and build stronger, more productive relationships with clients, suppliers, and employees. It's time to revolutionize the way contracts are created and managed - Enty has everything it takes to make more effective contracts a reality!
