In a world driven by contracts, businesses face the Herculean task of managing thousands of agreements, each filled with complex clauses and vital information. Yet despite being so essential to an organization, strategies for reviewing and analyzing the data locked within those agreements have traditionally been limited to manual, time-consuming processes. Not anymore.
During the Relativity Fest 2023 session “Relativity Contracts 101,” Relativity’s director of product management, Charlie Connor, was joined by PwC UK’s senior manager, Rachael Hunter, to provide a high-level overview of the contract review process and the game-changing solution to this challenge provided by Relativity Contracts.
The Purpose of Contract Review
At its core, the contract review process helps organizations mitigate risk and maximize revenue (check out our previous article to learn more about the value of contract review). One of the main ways it does this is by providing answers to key questions that organizations need to be able to investigate on the fly:
- Which contracts are approaching their renewal dates in the next 3-6 months?
- Which contracts require adjustments to ensure compliance with new privacy regulations?
- Where do we have uncapped liabilities? What are our rights to terminate or renegotiate?
- Are we being billed correctly, and are we making the most of our pricing entitlements?
The questions above are just a few examples that Charlie shared, but they’re not just formalities—they are critical for ensuring a company’s financial health, regulatory compliance, and operational efficiency.
The Pain Points of Contract Review
Navigating the landscape of contract review is no small feat, and Charlie and Rachael shared common challenges associated with this type of project.
First is overall volume. Not only can contracts span dozens or even hundreds of pages, but large corporations also often have to juggle tens of thousands of active agreements at once. The task of reviewing these contracts becomes even more formidable when you factor in that not all agreements are the same—clauses can be in different spots within a document and can use varying verbiage.
Next comes the challenge of extracting this data. Most key data points are locked in PDFs that often aren’t OCRed, so even if you find the right clause, there’s no easy way to get it into a format that is useable.
Finally, there is the issue of scale. We already talked about the number of agreements that can be called into question, but think about it: each time a corporation needs to answer just one business-critical question, someone needs to access the right document(s), find and interpret the relevant information, and analyze and calculate the essential data. It is not scalable to perform this task on an ad hoc basis. But, unfortunately, that’s how many organizations are performing this type of review today: divvying up PDFs among attorneys in their office, manually typing language from the agreement into Excel, combining the rows when everyone’s done, and then hitting Control-F to find the data they’re looking for. This is just an error-prone and inefficient workflow that will ultimately yield low-quality outputs.
To really drive this point home, Charlie shared this great analogy. If a CFO wanted to determine a company’s revenue for the past quarter by product line, the finance department wouldn't print out thousands of invoices and grab a calculator, right? So, if the same CFO wanted to know potential revenue impact from force majeure provisions, would we expect the legal department to manually pull and start combing through thousands of contracts? In any other context, not having critical business data readily available is simply unthinkable.
The Process of Contract Review
At the end of the day, Charlie pointed out, contract review is a lot like standard document review for litigation and follows the same general workflow:
- Understanding Client Needs: Grasping the specific requirements and objectives of the client.
- Document Collection: Gathering the pertinent contracts from various sources.
- Processing: Importing these documents into a dedicated review platform.
- Analysis: Employing automated analysis tools to extract key data and insights.
- Quality Check: Carefully reviewing and validating the results.
- Client Review: Publishing the results for the client's evaluation.
Though these steps may appear straightforward, they can rapidly become cumbersome and time-consuming without the right tools and methodologies.
The Solution: Relativity Contracts
This session did a good job of reminding everyone in the audience what a headache contract review is—but is there a better way? Enter Relativity Contracts, a new, innovative solution that transforms the contract review process by addressing the aforementioned pain points and getting you to insights faster. Here's how it works:
- Structured Data: Relativity Contracts transforms complex agreements into structured data, making crucial information readily accessible and actionable.
- Intuitive Viewer: It boasts a best-in-class viewer designed specifically for contract review, offering an intuitive and user-friendly interface.
- Efficient Workflows: Leveraging proven document review workflows streamlines the entire review process.
- Model Flexibility: Whether you opt for pre-built models or create custom ones to align with specific agreement types or language, Relativity Contracts offers flexibility.
- Accelerated Review: It has the power to reduce review times by an astonishing 40 percent right off the bat.
Relativity Contracts will help improve existing solutions or open the door to new business offerings like corporate transaction, regulatory response, and contract data management services—all while making the most of your investment in RelativityOne.
But don’t just take our word for it.
Customer Spotlight: Real-World Success
During the live session, Rachael Hunter from PwC UK shared a compelling case study, shedding light on the real-world impact of Relativity Contracts. The project centered on a client grappling with a colossal contract conundrum:
- Starting Point: The client initially had a staggering 40,000 contracts on their hands and had enlisted contractors for the review work. However, this approach led to inconsistencies and a lack of transparency across the vast data set.
- PwC's Intervention: PwC was brought in to assist, and they leveraged Relativity Contracts immediately.
- High-Level Overview: With the power of Relativity Contracts, PwC swiftly provided the client with a high-level overview, helping identify irrelevant document types that could be omitted from the review.
- Precision Searching: Armed with the knowledge of the specific clauses and vendors they were seeking, PwC used Relativity Contracts to prioritize searches based on clause type and vendor.
- Uncovering Hidden Contracts: Importantly, they also identified additional vendor contracts that contained the same crucial clauses in need of remediation. These would have gone unnoticed without the in-depth analysis made possible by Relativity Contracts.
- Dramatic Reduction: Through this data-driven approach, the data set was streamlined from a daunting 40,000 agreements down to a manageable 200 that required remediation.
This year’s Contacts session at Relativity Fest illuminated the path toward efficient, accurate, and transformative contract review—no matter the complexity or intricacies involved.
By harnessing the power of Relativity Contracts, organizations can turn the burdensome process of contract review and analysis into a strategic advantage. It's a shift from treating contracts as mere legal documents to recognizing them as invaluable assets that can drive compliance, financial optimization, and business growth.
Graphics for this article were created by Kael Rose.