World Commerce and Contracting (WorldCC) estimated that the cost of reviewing everyday low-value contracts comes in at a whopping £5,000 to complete, and figures also show that the average time to review a contract is over 30 days.
Ultimately, higher-volume but lower-value contracts cost your legal team time and take them away from bigger, more interesting and more complex projects. It also costs the business a heck of a lot of money, too!
‘Lower-value’ doesn’t always mean ‘lower-risk’, but there are a number of factors at play in deciding how to deal with contracts. We manage high volume contracts on your behalf, streamlining the entire process so it’s more efficient and cost-effective whilst also ensuring contracts are handled safely.
In this article, we will explore the challenges associated with high volume contracts and provide practical insights on how we can help you to maximise efficiency and minimise risk.
Contracts matter. Without contract management, businesses would have no revenue or access to services.
But the high-volume contracts that take up much of the time of in-house teams still need negotiation. They need to be handled efficiently, safely, and scalably, but putting in place standard processes and automation requires time and expertise that in-house teams often struggle to find.
In-house legal teams are already swamped. The time and effort that goes into lower-value contracts is probably a major factor in adding stress on your team while preventing them from focusing on strategic work. There are knock-on effects for the business too - not only the experience for sales and procurement team members as they wait for help, but also the broader business impact on revenue growth and business agility.
We can turn around contracts in just half a day, create a great experience for your business (our customer satisfaction is 4.6/5), and deliver automation and continuous improvement as part of the service. If you can’t square meeting these standards internally for high-volume contracts while also supporting strategic work, it’s time to consider using an external supplier (or contacting us). That way, your in-house team can focus on the important, more interesting stuff that can’t be outsourced, you can keep the cost at a predictable minimum, and you can demonstrate even more business value.
Risk is a major factor in contract negotiations. However, not all contracts are equally risky. You need solutions for the different categories of contracts that recognise their different value and risk, and handle them appropriately. You need any outsourced provider to be rigorous and follow your preferred positions, but before turning to outsourcing, it is worth considering whether some types of low-risk contracts need negotiation support at all.
Thresholds can be set through policies, and your team (or a managed legal service provider) can perform triage to ensure that each contract is being handled in the optimal way, which may be for the low-risk contracts, the business taking responsibility or non-negotiable standard terms being used.
This optimisation ensures that legal is not getting bogged down in reviewing contracts that will probably never cause you any trouble. Legal’s limited resources (whether internal or external) need to be directed to what matters, so heading off the lowest-risk contracts at the initiation stage is key.
We are often asked by clients to implement a risk-based triage as part of a managed intake process to ensure that the contract needs support, and if so, apply the client’s rules to who will support it internally or externally.
Triage can be supported by an approval process that ensures the relevant departments and managers sign off their part of the agreement and any material risks and a signing policy that ensures that the person with the appropriate seniority signs the agreement, based on the level of risk.
When triaging your contracts, aspects to consider might be:
Once you’ve ensured that legal is focussing on the right contracts, there will still be many that need to be negotiated. And this is where we can also add value by delivering streamlined support for contract management of higher-volume contracts, reducing your costs and allowing your team to focus on the critical deals.
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We wrote the book on streamlining contract management, which has a three stage methodology:
The book has a comprehensive list of steps to follow to improve your contracting, but let’s be honest - it’s hard to find the time to do all these steps, especially if your team is swamped by urgent work. It’s also hard to change behaviours, and legal team members may be more inspired by doing strategic work rather than climbing a cultural change mountain.
Radiant exists to help teams solve this conundrum by implementing our methodology for your high-volume, lower value contracts, allowing your legal team to focus on what they do best: solving your organisation’s most important issues working closely with the business.
So how do we implement for you the three stage methodology to streamline your contract management?
“If you can’t describe what you are doing as a process, you don’t know what you’re doing.” - W. Edwards Deming
Too often, companies’ contract processes are ad hoc rather than standardised, with everyone working in their own preferred way.
This causes multiple issues:
The first thing we do when we work with our clients is look to standardise the basics quickly:
The result is you get the benefit of processes and tools that have been improved through our support of tens of thousands of contracts, we can get going quickly without adding even more work to your team, and your business users get a seamless transition that immediately starts to add value.
Technology is terrific, and there are lots of ways that we use legal tech to help our clients improve their contracting. But alas, there are no silver bullets that solve everything, including generative AI or contract lifecycle management.
So while we use and build legal tech where it can help, we provide tech-enabled services, rather than just technology. This means that you get the best of judgement calls and a human, friendly experience, along with the efficiency and accuracy that tech offers in the right contexts.
Once we have the repeatable process in place, we will provide a range of automations as part of our fixed-price service, with no need for you to find technology budgets or run complex integration projects.
Here are just some examples of what we bring within our fixed charges:
And yes, we do use AI. But only where it helps, and only where it is safe. We made your contracting process fast and consistent in the Repeatable stage - this is not the time to introduce random word generators!
We’ve done this quite a few times now for new clients, so the first two stages can be done in a couple of weeks as we get going with a managed legal service. The trick is the third stage: refinement.
Radiant is built around continuous improvement, meaning that every quarter we will deliver multiple improvement projects as part of the base cost of the service. It’s this refinement stage where the magic really happens. We meet with you each quarter to review what was completed and most importantly agree with you on the priorities for the next quarter, based on your business imperatives.
Through continuous improvement, we are able to deliver the most important business value: accelerated revenue or a more agile business, depending on whether we are supporting your sales or procurement contracts.
With many clients the focus becomes one of reducing time to close, while ensuring that your contracts handle the risks you care about.
With all the tools and processes we put in place as part of the repeatability and robots stages, we will turn more and more of your contracts in half a day (as in drafting a contract, or handling a red-line).
But to get the real business value of accelerating sales and procurement, the goal needs to include removing the need for multiple turns of the contract - because however fast we are, the other side tends to take much longer.
Getting rid of the need to send drafts back and forth so many times is an art and science. Some of the approaches we bring are:
Although speed is critical for the legal team to demonstrate that it is adding business value, we never lose sight of risk management.
The speed of the service will delight your business team (hence our 4.6/5 customer satisfaction scores) but our job is to protect your company and make sure that risks are also handled appropriately. The steps we take to make your contracting more efficient also improve risk handling, for example:
Fundamentally, a standardised and optimised process delivers reliability as well as speed.
Outsourcing the management of high-volume contracts to a managed legal services provider, known for their extensive experience, dedication to efficiency, and focus on risk reduction, offers unparalleled benefits.
In-house legal teams face significant pressures, and the ad hoc approach to negotiating lower-value contracts adds to this. We have proven time and time again, via our data-driven approach, the significant time and cost savings that can be achieved using Radiant’s contracting methodology.
Our work in standardising processes, templates, playbooks and workflows increases efficiency, without increasing the risk. Plain language, simplification of terms and processes, and automation all play a part in improving outcomes. Meanwhile your junior team members can upskill, and more senior staff can be given the space and time to work on more interesting, strategic projects without the need for additional external law firm support. Our expertise is evidenced in a number of case studies, where organisations have successfully benefited from our continuous improvement approach.
If you’d like to see what we can do to free up your time by allowing us to manage your smaller contracts, please get in touch.
You might be wondering what your next steps should be. Let us guide you with three easy options:
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