Fourier IT Logo

In the realm of business agreements, technology has revolutionised the management process, accelerating contract timelines and enhancing visibility. However, numerous enterprise companies still grapple with the full realisation of digital transformation benefits, hampered by a lack of centralisation, automation, and other technological advancements. This challenge is particularly pronounced in the context of contract clause management.

A clause library, comprised of pre-approved contract clauses, offers employees an efficient means to select alternatives when the standard clause is deemed unsuitable by the other party. This approach significantly streamlines processes, sparing legal teams from routine contract modifications and saving valuable time.

A well-devised clause strategy facilitates swift progress in agreements, particularly in critical areas like payments and contract termination, mitigating risk exposure. Unfortunately, the current landscape often sees legal text dispersed across various platforms and spreadsheets, leading to disorganisation, outdated information, and inaccessibility. Such disarray exposes firms to contracting delays, inaccuracies, and non-compliance risks.

As part of our ongoing commitment to innovation and enhancing user experiences, we sought insights from enterprise companies regarding their clause management practices—ranging from drafting and approvals to revisions and storage. Discover the significant obstacles and challenges identified, along with insights into how a unified, automated clause library can serve as a valuable solution.

Principal Challenges in Clause Management

Efficiently updating a single clause often entails a series of steps and widespread approvals. In the realm of manual revisions and storage processes, this can swiftly consume valuable time and resources. According to research conducted by DocuSign, sizable clients consistently encounter three primary challenges when it comes to overseeing agreement language.

1. Absence of centralisation

Decentralised storage of clauses presents significant challenges for large organisations managing extensive contract portfolios, particularly when the need arises to locate and review specific sections of legal text. The dispersion of clauses across various systems and documents necessitates considerable time and effort from legal professionals in their search for specific clauses.

When organisations encounter the necessity to modify or delete a clause within widely used agreement templates, the process involves navigating through scattered documents to identify relevant contracts. While manageable when dealing with a limited number of agreements, the inefficiency becomes increasingly pronounced as the volume of contracts reaches into the thousands. This decentralised approach adversely impacts the speed and accuracy of the contracting process, making it challenging for each member of the legal team to track changes made by their colleagues to the clause content.

Moreover, the proliferation of agreements across numerous folders and spreadsheets can result in a lack of visibility into critical aspects of sales and procurement obligations, spanning vendor relationships, payment terms, and service agreements. A case in point is a large healthcare organisation managing multiple vendor agreements across diverse locations, where the decentralised storage approach contributed to heightened redundancies and increased costs due to a lack of oversight.

2. Lack of automation

Based on research conducted by DocuSign, a notable number of companies currently handle their agreements with minimal or no automation support. Specifically, these organisations lack the necessary tools for swiftly identifying legal language within their agreement portfolios and streamlining manual clause updates. When faced with the task of updating outdated clauses to align with new corporate responsibility policies, interest rates, payment or sales terms, state or federal laws, company policies, procurement updates, or other modifications, firms find themselves grappling with a prolonged revision process and an elevated risk of human error—particularly when these changes impact a substantial portion of their agreements.

In addition to the time-intensive nature of manual processes, the absence of automation heightens the potential for contract inconsistencies. A significant majority of research participants revealed the absence of a centralised library for managing blocks of legal text, compelling them to manually scrutinise clauses across various agreement types to detect errors. This manual approach poses a potential risk of compliance vulnerabilities. Even for those with access to a clause library, limited automation tools leave them with no alternative for updating legal text, necessitating manual intervention. This becomes particularly challenging when dealing with agreements in multiple languages or identifying non-compliant clauses buried within lengthy contracts.

3. Agreement complexity

Particularly for enterprises, intricate agreements and nuanced legal language pose significant challenges in expediting contract processes and mitigating risks. Many organisations grapple with the management of numerous contracts, often running into the complexity of dealing with various language variations. Depending on the geographical scope of a company’s operations, they may encounter clauses written in as many as four to five languages.

Navigating through the intricacies of extensive agreements, such as sales contracts with intricately negotiated terms, presents a formidable challenge in ensuring the comprehensive tracking of all contract obligations. Additionally, keeping clauses aligned with evolving regulations becomes increasingly demanding. For instance, the implementation of the California Privacy Rights Act (CPRA) in 2023 introduced new requirements concerning consumer data privacy. Adhering to these regulations necessitates active clause management and oversight—an intricate undertaking in the absence of a centralized clause library and automation support.

The Strength of Clause Libraries: Unifying and Streamlining the Agreement Process

In instances where disorganised and inaccurate clauses impede a business’s operational efficiency, tarnish its reputation, and jeopardise compliance, as well as vendor relationships, the implementation of a centralised, automated clause library emerges as a transformative solution. This marks the advent of a new era in contract organisation and ease. DocuSign CLM provides organisations with their own clause library, consolidating agreement language in a singular location, simplifying the processes of retrieval, revision, and standardisation of accurate and compliant clauses.

For organisations grappling with an incomplete digital transformation, burdened by manual tasks, scattered contracts, and frequent negotiations, DocuSign CLM’s integrated clause library empowers employees to manage agreements with enhanced efficiency and minimal legal risk. With the support of automation, companies can gain a comprehensive understanding of their existing contract obligations, create meticulously detailed agreements, and swiftly adapt clauses to align with evolving regulations, priorities, and offerings.

Let us contact you: