Cloud-based contract lifecycle management solutions firm Exari conducted a survey of 92 corporate counsel and compliance experts. The results indicate that the vast majority of general counsel find their department's contract management systems severely lacking. Only 11 per cent of surveyed GC rated their contract management systems higher than seven on a ten-point scale, while 39 per cent said they possessed little or no insight into the key contract terms and information needed to properly assess risk.

Paper Weights

Costly and clumsy contract management systems appeared to be the common denominator. While around 75 per cent of GC reportedly use 'cut-and-paste' style templates in Microsoft Word to draw up contracts, leading to inefficiencies in the drafting stages, only one in ten said that their department used document generation software to help streamline the process. Similar problems were identified in contract storage, with almost half of respondents (47 per cent) citing paper-based filing as their main mode of contract storage. While 64 per cent of respondents said they used network drives to store contracts, Exari warns that mass storage without a centralised archival system, whether hardcopy or digital, still leaves companies with an insufficient portrait of their contract risk profile.

High Risk

According to the survey, GC are paying a hefty price for failing to modernise contract management. When asked about various 'pain points' in the contract management process, almost 59 per cent reported slow approval processes for their contracts. Similarly, 27 per cent cited missing key contract milestones as an ongoing point of difficulty, while a quarter struggled with internal collaboration. Compliance also appeared to be a key issue, with 27 per cent reporting difficulties ensuring compliance with their client obligations and 13 per cent with their regulatory obligations.

The Foundation of Every Business

Exari's report warns that companies will lack a sufficient understanding of their risk profile unless they embrace new contract management technologies and platforms. Beyond exposing themselves to increased liability, legal departments may also miss out on the opportunity to be a productive part of their business and to support management through crucial developments such as acquisitions. 'Contracts are the foundation of every business', warned Exari chief executive Bill Hewitt, 'these survey results reinforce how ill-prepared many major enterprise-level organisations are when it comes to contract risk.' Source: Exari