Contract Review and Analysis Project

Why a Contract Review and Analysis Project are More Expensive and Harder to Complete?

When a business is contemplating a new contract review and analysis project, PRIOR TO ENGAGING A CONTRACT LIFECYCLE MANAGEMENT VENDOR, the question we often hear is, “How much will it cost, and how long will it take to complete the task?” The answer is usually “That depends.” Many factors can make a project or a contract review more or less expensive or harder to complete. Here are a few factors to keep in mind;

Target Timeline for Completion.

It is essential to set a start date and a deadline for any project; this will enable easy planning and flow of work. Time is critical in any area of practice and management is the key to any successfully completed project.

When the target timeline for completion by the client is immediate, this will mean we have to set aside other obligations (present projects and the contracts to be reviewed) to be able to meet the deadline set by you and fully concentrate on the task in hand, which will be more expensive and harder to complete because of the tight schedule.

This means that for effective work and compliance with the set deadlines, more finances will be required to even hire more employees to assist in the huge flow of work and projects.

Documents.

The type of document that we will be reviewing should also be considered and kept in mind. There are vast types of documents out there, just think of any situation or scenario and there is a document to use. The following is a generic/representative example that highlights some of the critical things that will affect our estimated effort for the review;

Up to 60% of the documents are all related to commercial contracts, which include but are not limited to services agreements, supply agreements, customer agreements, etc. Samples can be accessed through the following link; https://simply-docs.co.uk/Business-Documents/Legal-and-Commercial-Agreements. 

At least 10% are out-of-scope (i.e., duplicates, non-contracts)

Approx. 10% are children’s documents (i.e., amendment, schedule, addendum) for every master; at least 5% of these children’s documents do not have any provisions relevant for completing the protocol-based review fields.

Each document is at most one contract.

At least 20% are on your template without material negotiations

The documents are all in English if not, there is a need for translation of the documents to enable us to understand the content and be able to do the needed work which will cost some extra money.

Collection of Documents.

How the business will receive documents needed for the review will factor in how expensive the review will be.

There are several ways the documents can be collected from the clients. Assuming that all documents will be transferred to UnitedLex in advance of the project to enable the start of the project or the review is the lowest level of effort that UnitedLex will make, if UnitedLex is involved in efforts to collect the documents, the following are Some things that will drive the action:

1. The number and the type of databases/repositories that UnitedLex will have to access to obtain the documents, for example; global CLM systems, regional repositories, and local Shared Drives, etc.
2. Any expected reach outs that UnitedLex will have to complete to individuals’ groups to collect one-off/outlier documents that are not stored in a current database/repository, and
3. whether any documents are currently not in digital form, i.e., hard copies in a records room.
4. How many copies will be required?
5. Legibility of the documents.

Scope of the Review.

It is crucial to know what output you are looking for, which will also help us in being able to deliver the needed work without moving back and forth on further reviews and clarifications. An example of a result of the review and the documents reviewed to complete the output can be accessed by clicking this link https://gradcoach.com/wp-content/uploads/Sample-Document-Review.pdf which will help understand the work to be done and have a vision of what is needed. Below is a generic/representative scope for a basic diligence review;

Identification of out-of-scope documents

Complete up to eight basic fields to identify the in-scope documents (e.g., Agreement Title, Agreement Type, Counterparty Name, Your Affiliate/Sub Entity Name, Effective Date, End Date)

Create relationships between documents (i.e., identifying and mapping amendments/children documents to the master contract they relate to)

Complete up to five text extraction fields (e.g., change of control provision, assignment provision, termination for convenience provision, termination for cause provision, notice provision),

Complete up to four protocol-based review fields (e.g., Restriction on Assignment (Notice/Consent/Termination/None/Permitted), Restriction on CoC (Notice/Consent/Termination/None/Permitted))

Format of our Deliverable.

We all look forward to receiving the final products on orders or instructions that we have issued, and we strive to deliver according to the requirement and the standard you request.

The requested form of delivery will significantly impact the cost and hardness or easiness of the task. If the deliverable is bulky, requires to be exported into an excel file, create records in your Contract Lifecycle Management (CLM) system or other databases, or it will have to be worked on one at a time, or how many copies are needed; this will take more time and cost more.

This will significantly impact the output of the review, and for you to get the desired deliverable from us, the need for more finances will help achieve this.

Location of UnitedLex Review.

The location of any business is usually a significant factor in what is considered in the completion of the review and the costs that are charged.

There might be a need and requirement to use the services of a particular location that is not readily available, and expenses will be used/incurred in obtaining the said service; this will directly affect the monetary aspect of the project and the timeline set as it will be harder to complete the task without the necessary resources.

The clients might want a face-to-face discussion on what is needed and the necessary steps, but due to, let’s say, distance, this will be hard, and for us to be able to reach you in your specific area, time and expenses will be incurred, which will need to be refunded.

Other.

There are many factors to be considered on a case-to-case basis, and below is a list of other typical assumptions we would make about a review.

A final review protocol will be aligned with you in advance of the project

Your team will be available to manage escalations and resolve outliers throughout the project

UnitedLex will be provided with continuous access to any of your environments required to complete the project, with minimal delays caused by latency/system performance issues.

The complexity of the documents will require elaborations, and we will provide any needed further assistance.

The accuracy of Contract Review or Analysis is not always Perfect as we are humans. To err is human; for that reason, below is a Framework to Help your Exploration into AI and other Alternative Methods for Review.

If you are looking for something with lower quality levels and at a lower cost potentially, for example, less effort to bring something up to 97% efficiency than 99% efficiency, while AI is undoubtedly helpful, at this point, its results are not something that is often being entirely relied upon. Instead, after the AI models run to find the relevant text, some level of quality review or analysis is completed by humans.

The level of this review will depend on the project requirements and the client’s goals. A simplified example is shown below; –