According to Fulbright & Jarowski’s Annual litigation surveys in recent years, the majority of company litigations are related to contract disputes. Contract Management continues to be among the top 3 focus priorities for General Counsels according to IPQC.
Why do contracts continue to be a major contributor to the threat of potential risk litigation?
One major reason is there are many types of contracts in use, residing in various departments within an organization, for example:
- The Sales department has their customer and partner contracts
- Marketing has PR and Event Management contracts
- Facilities Management has their Building and Service related contracts
- Procurement has their sourcing vendor contracts
- Human Resources has their employee contracts
- IT and R&D have their contractor contracts
Even medium sized organizations can easily have thousands of these types of contracts, resident in various physical locations, on various types of media, and in various types of formats. Given this kind of environment how can anyone possibly know what risks of potential ligation may exist due to unfilled obligations or non-compliance with legislation or regulation?
There is a need to locate all existing contracts and then extract all the key information from them, to assess obligations and potential compliance risks. Once it is clearly understand where contract risks lie, a contracts management solution may be deployed to manage the contract lifecycle processes.
Seal Software not only offers Contract Management Solutions which address these critical issues, but also a model which embodies these solutions with Contract Management Best Practices: The Seal Contracts Management Maturity Model, consisting of the following key steps:
Step1: Discovery, Collection and Classification (Targeted results: 1 week)
Seal believe what is most critical to an organization at the outset, is getting the existing contracts under control. The first step in doing this is in understanding potential contract exposures and risks. This is the essence of what Seal Contract Discovery and Analytics (cDiscovery) is designed to address.
Step 2: Governance and Foundation (Targeted results: 1 month)
It is imperative that an organization’s governance policy be formally adopted into the Seal solution. If a governance policy for contracts does not exist, Seal will help an organization create a tailored governance policy applying contract management best practices. Seal recommends within Step 2 of its Maturity Model that an organization focus on the critical processes and solution elements which will provide quick user adoption and a faster Return on Investment (ROI).
Step 3: Enterprise Class Capabilities (Targeted results: 2-4 months depending on number of features deployed)
Only when an organization has successfully implemented Steps 1 and 2 of the Seal Maturity Model should it begin to consider adopting more advanced features. Steps 1 and 2 are fundamental to an effective contracts management model and will serve most organizations’ contract management requirements. Seal offers a number of “Enterprise Class” extensions that allow an organization to further tailor the Seal solution to their strategic and operational requirements.
The Seal solution and best practices contained in Step1: Discovery, Collection and Classification of the Seal Contracts Management Maturity Model deploys out of the box in one day. It requires no user training. Its unique and innovative methodology and technology is designed to discover thousands of contracts and extract metadata quickly and accurately. It has a comprehensive rules engine which allows precise search and extraction of key contract clauses, and reports on the results. This is a quick, automated, and proven practice for understanding the potential litigation and compliance risks contained within existing contracts. Steps 2 and 3 apply Seal’s market leading experience in providing contracts management solutions.