Navigating the journey to a signed contract can be time-consuming and complex. With multiple stages, from drafting to final approval, the process often encounters delays. For executives, SMEs, startups, and legal departments, finding ways to sign contracts faster is fundamental. Imagine drastically reducing the tedious back-and-forth of negotiations and replacing time-consuming manual reviews with intelligent automation. This is what AI contract review software offers. In this guide, we’ll cover how AI contract review software can streamline the process, helping you sign contracts quickly and efficiently.
Understanding the contract signing process
Contract signing starts with a clear understanding of each stage involved and estimated timelines.
Stages of the signing process:
Drafting. The drafting phase is the foundation of any contract. This step includes creating the initial document and outlining terms, conditions, and clauses that will govern the agreement. The quality of the initial draft impacts the subsequent stages, making it essential to be thorough from the outset.
Reviewing. In the review phase, the draft is meticulously examined for accuracy, compliance, and mutual agreement. This step often requires input from multiple stakeholders. Using AI contract review software can dramatically cut down the time spent on manual reviews with a traditional attorney.
Negotiating. Contract negotiation is where parties fine-tune the contract terms. This phase can be time-intensive, depending on the contract’s complexity and the number of stakeholders. Effective negotiation tactics, like pre-negotiated clauses and collaborative tools, can streamline this stage.
Approving. Approval entails getting the necessary endorsements from all relevant parties. This stage can be slowed down by inefficient approval workflows and manual processes. Implementing a streamlined approval process with digital signatures and parallel approvals expedites this phase.
Signing. The final stage is signing, where all parties formally agree to the contract terms. This stage is relatively quick if all previous stages have been handled efficiently. Digital signature solutions not only ensure a secure and prompt signing process but also provide audit trails and authentication.
Typical times for contracts:
Simple NDAs. 1-3 days. Non-Disclosure Agreements (NDAs) are typically straightforward and quick to finalize, with minimal terms and conditions. The simplicity of these business agreements allows for a turnaround time of 1-3 days, assuming there are no major revisions required, of course.
Vendor contracts. 1-2 weeks. Vendor contracts can be more detailed and may require additional review and negotiation, especially if they outline in detail specific terms regarding service levels, pricing, and delivery schedules. On average, these agreements take about 1-2 weeks to complete.
Complex partnership agreements. 1 month+. Partnership agreements include more intricate details and higher stakes, often necessitating extensive negotiations and multiple rounds of review. These contracts can take a month or more to complete, depending on the complexity and the number of parties.
Challenges in the contract signing process
Navigating the contract signing process involves several obstacles that can delay finalization and impact business operations. Understanding these roadblocks helps in devising strategies to overcome them.
Common Roadblocks
Miscommunication. Miscommunication between parties leads to misunderstandings and incorrect assumptions, causing delays. Lack of clarity can result in conflicting interpretations of contract terms, prolonged negotiations, and revisions.
To avoid this, you want to establish clear communication channels and protocols, and consider using collaborative platforms that track changes and comments in real time.
Lengthy review cycles. Prolonged review periods often occur because multiple stakeholders need to examine the document. Each round of review adds time, especially if manual processes are used. You can mitigate this by using AI contract review software to accelerate the process. Automating the review phase reduces the dependency on human input, speeding up the identification of contract issues.
Inefficient approval processes. Approval workflows that rely on manual processes or outdated systems can cause significant delays. Bottlenecks occur when approvals are sequential rather than parallel, or when decision-makers are unavailable. Streamlining approval processes with digital tools can help overcome this.
Inefficient approval processes. Approval workflows that rely on outdated systems or manual steps frequently cause delays. Bottlenecks are common when approvals are sequential rather than parallel, or when key decision-makers are unavailable. Streamlining approval processes with digital tools, such as automated notifications and parallel approval systems, maintain momentum and avoid waiting periods.
Manual errors. Human error is a frequent issue in contract management. Mistakes in drafting, reviewing, or approving can lead to costly revisions and delays. Typographical errors, misinterpretations, and oversight of critical clauses are common problems. Implementing AI-driven tools to assist in these stages enhances accuracy, minimizes errors, and reduces the need for time-consuming corrections.
Impact on businesses
Delayed revenue. Delays in the contract signing process can postpone the start of projects or the delivery of services, directly affecting revenue. The time taken to finalize contracts inevitably has an impact on a company’s cash flow and the overall ability to meet financial targets. Efficient contract management is essential to maintain steady revenue streams and avoid financial shortfalls.
Increased costs. Lengthy contract cycles and inefficiencies inflate operational costs. The longer it takes to finalize a contract, the more money and resources are expended. Legal fees, administrative costs, and the opportunity cost of tying up personnel in prolonged negotiations all contribute to increased expenses. That’s why streamlining the process is so important to help reduce these unnecessary costs.
Missed opportunities. Delays in contract signing often result in missed business opportunities. Competitors who finalize agreements more quickly are more likely to secure deals. In fast-paced industries, the ability to move swiftly from negotiation to signing is a significant competitive advantage. Speed and efficiency in contract management enable businesses to capitalize on opportunities promptly.
Best ways to sign a contract quickly
Accelerating the contract signing process involves leveraging technology and refining workflows. Here are some of the most effective strategies:
Implement AI contract review software
AI contract review software transforms the review stage by automating the detection of errors, inconsistencies, and compliance issues. This software accelerates the review process by instantly highlighting problematic clauses and suggesting revisions.
The precision of AI reduces the risk of overlooking critical details, making contracts thorough and precise. Efficiency is boosted as the software can handle large volumes of contracts simultaneously, allowing legal teams to focus on higher-value tasks.
Streamline review process
Contract review checklist. Having a comprehensive checklist ensures that all necessary elements of a contract are reviewed systematically. This minimizes the risk of missing crucial points and keeps the review process organized. A standardized checklist tailored to your needs can reduce review time.
Automated workflows. Automating workflows helps move contracts through the review process without unnecessary delays. Automated systems can send reminders, track progress, and route contracts to the appropriate stakeholders for approval, ensuring that no step is overlooked.
Clear guidelines. Establishing clear guidelines for contract review sets expectations for all parties. These guidelines should outline the responsibilities of each stakeholder, the criteria for review, and the timeline for completion. Clear expectations avoid confusion and align everyone towards the same goals.
Enhance negotiation tactics
Tips for contract negotiation. Effective negotiation is key to finalizing contracts quickly. Tips for success include understanding the other party’s needs, being prepared to make concessions, and maintaining clear communication. Building a rapport with the other party can also facilitate smoother negotiations.
Collaborative platforms. Using collaborative platforms allows all parties to work on the contract simultaneously, making real-time changes and reducing the negotiations’ back-and-forth . These platforms provide a shared space where edits, comments, and approvals can be managed efficiently.
Pre-negotiated clauses. Incorporating pre-negotiated clauses into contracts saves time. These clauses are standard terms that have been agreed upon in advance, eliminating the need for lengthy discussions on commonly disputes. This approach streamlines negotiations and expedites the signing process.
Enhance your negotiation tactics with these tips for successful contract negotiation.
Optimize approval procedures
Refine your approval process. An optimized approval process ensures that contracts move swiftly through the necessary endorsements. This involves setting up clear approval hierarchies, using digital tools to track progress, and reducing unnecessary steps. Streamlining the process eliminates delays caused by waiting for approvals and keeps the contract moving forward.
Digital signatures. Digital signatures offer a fast and secure way to sign contracts. They eliminate the need for physical presence, allowing contracts to be signed from anywhere, at any time. Digital signatures also provide a clear audit trail, making sure that all signatures are authenticated and documented.
Parallel approvals. Implementing parallel approvals allows multiple stakeholders to approve a contract simultaneously rather than sequentially. This significantly reduces the time taken to get all necessary endorsements, speeding up the overall process.
Adopting these strategies helps reduce the time it takes to sign contracts, enhancing efficiency and ensuring that your business operations run smoothly.