Unexpected risks occur during negotiations when your lawyers' points of view or subjectivities diverge. However, combining their input into a single window would significantly improve things. Missing some remarks could have disastrous effects.
Enter contract negotiation software.
AI-powered contract negotiation software allows you to seamlessly collaborate. It extends an opportunity to learn and strategize from your past negotiations. In this blog, we'll see what happens when you pick a CLM over other general-purpose software for contract negotiations.
What is contract negotiation?
Contract negotiation is the technique of arriving at agreeable and beneficial terms. It sets the tone for the upcoming business(s) or commercial relationship(s). The parties involved reflect on the contract terms and define each one's rights and obligations.
Once the contract gets drafted and reviewed, it gets shipped for negotiation. As part of the negotiation process, business partners consider and weigh the contract content and reach clear and mutual goals.
In simple words, contract negotiation ensures that your needs get met. It is one of the most consequential stages of the contract lifecycle. Note that unfair or muddled negotiations can cost more and negatively affect your business.
What is contract negotiation software?
Initially, contracts were getting negotiated, and terms were redlined manually and sent via Fax or through posts or couriers. With the advent of digital technology, contracts got marked up online using Google Docs, Word, or similar software and shared via email.
These techniques have been around the corner for so long without any innovation. Even though they solved some problems the users faced initially, they also landed you in trouble with toggling between multiple software platforms, various versions of contracts, and countless threads of email communication.
But, now, contract negotiation software provides the much-needed flexibility and breakthrough. The software has delivered outstanding results in slashing redline rates while not exposing the contract owner to risks.
Furthermore, it furnishes you with more capabilities than you could imagine and streamlines the entire contrac within a single platform.
Hurdles in the existing contract negotiation process
It is common for business teams to stumble in many ways due to manual contract negotiations or while using software not designed for contract negotiations. Without dedicated contract negotiation software, history tracking, activity log, and security become troublesome.
Finding insights from the prior rounds of negotiations is not feasible. Additionally, manual contract negotiations are prone to human errors, which may turn out to be costly in the long run. Some common bottlenecks teams face include:
Bizarre version control
Tracking every revision becomes tedious in the absence of legal contract negotiation software. Due to the possibility of seeing numerous agreements as email attachments, you can miss the most recent contract version. Without a proper activity feed, you could barely learn who changed what.
Collaboration becomes a nightmare.
While negotiating contracts, communication is crucial. Without real-time collaboration, you can’t ensure that all the participants are on the same page. Teams also face logistical problems in synthesizing every stakeholder's input and feedback.
Discussing terms in emails and communication tools like Slack or Teams can very well jeopardize you. Visible internal comments to your counterparties will take your bargaining power away.
By losing sight of intricate comments on specific clauses, you increase the uncertainty, and signing off the contract gets delayed. In addition, back-and-forth telephone and in-person communications are overlooked, resulting in silos of contract data.
For scaling businesses, keeping high-volume contracts reliable is often a mammoth task. With an ever-changing regulatory landscape, contract compliance is becoming more challenging.
Giving counterparty access to the shared cloud storage of your business may be particularly risky for security. Poorly negotiated contracts may result in monetary risk, contract failures, and legal repercussions. Other consequences include information leaks and neglected obligations.
Contract negotiation software vs. Other tools for Negotiations
Here's what happens on a regular day when you negotiate with & without contract negotiation software.
Benefits of contract negotiation software
Contract negotiation software has evolved beyond the horizon in recent years. Consequently, it replaces the need for multiple platforms like MS Word, Docs, Adobe PDF, and other email tools. All the arduous work gets done within a single browser. And all the conversation threads get housed within a single legal contract negotiation software.
Some apparent benefits are listed below:
Improved collaboration across teams
General communication tools are not enough for the high-level collaboration needed for present-day contract negotiations. CLMs solve this puzzle intrinsically. They solidify your negotiations by enabling real-time contract collaboration.
During negotiations, you get input from different team members. A contract negotiation software helps you achieve transparency. You may not worry about overlooking any revision request. You could quickly leave notes for yourself, internal comments for your team members, and external comments for all counterparties.
Getting smarter with digital redlining
Conducting negotiations digitally or electronically helps you save time and ensures accuracy. Every revision, comment, or change gets tracked, and you are pretty sure who did what at any point. You could refer to the entire redlining history for making critical decisions down the lane.
CLM platforms, like SpotDraft, help you get everything done correctly without leaving the platform - redline, accept or reject changes, and get signatures all at once.
Here’s an example.
Let’s say you forgot to follow through with stakeholders to switch on track change, and they did not. No worries. Auto-redlining in SpotDraft automatically records every minute change and instantly spots those changes.
Better control over contracts
Several copies of your valuable contract aren't dispersed among devices and cloud storage, so you won't likely lose it. Further, deep email integration is a feature of contract negotiation software, which allows you to forgo uploading the contract after you receive it from the counter-party.
Teams benefit from increased productivity and efficiency by automating contract negotiation workflows. SpotDraft offers conditional approval workflows that ensure the contract gets routed to the right members. You always get a grip of your agreement - whether that’s in the redlining phase or already executed.
Analytical insights from past negotiations
Negotiation-based insights help teams in evaluating and redefining their strategies. SpotDraft provides valuable insights with the help of its robust SpotInsights feature. You could find which agreements went through a maximum or minimum negotiation cycle and fine-tune the templates afterwards.
Even during negotiations, you will have the advantage because you will have specific information from previously intensely negotiated provisions to help you bargain more effectively. You could understand the history with a customer and decide on positions accordingly, which in turn helps in speedy contract closures.
Negotiating contracts with SpotDraft
Something notable about SpotDraft is the ability to download a clean version of the agreement with just the external or counterparty comments - this may save you ample time. Participants can be sure that they will be working on the latest contract anytime as each redline becomes a new version. Other prominent features of SpotDraft include -
- Approval workflows
It is more than a compact contract repository - you could set approval workflows. For instance, you could set approval from the CEO as a standard for contracts with a value of more than 1Mn. These approval matrices and negotiation playbooks are found only within contract negotiation software such as SpotDraft.
- Digital redlining
AI-assisted review and automated redlining are some of the superpowers of SpotDraft. From contract drafting to negotiation to execution, our platform helps simplify each phase incredibly. A third-party customer paper can be easily uploaded and reviewed fast with its definition display and error check feature. You could smartly catch inconsistencies within contracts.
- Audit Trails & Clause Library
With a detailed activity feed, you could dive deep into every amendment your organization did or counterparties accomplished. Also, you could add various renditions of clauses or fallback positions to the library for precise usage later.
Contract negotiations today are complex, which is why the Contract Lifecycle Management platforms are gaining massive popularity. SpotDraft is the #1 CLM for fast-growing companies. You can try a free demo here.