In the context of a large corporate enterprise, data is the lifeblood of the company. It is arguably the most precious resource owned by an organization. Often, how it is leveraged and understood can be the difference between success and failure. We are in an era of massive data creation that is being accelerated by technology innovation and inexpensive storage. To add fuel to the fire, rapid global economic expansion is made more complicated by a proliferation of regulatory requirements covering the domains of health care, financial records and reporting, human resources, privacy and security.
Technology, specifically how we handle our data, is fundamentally changing the way we live, work, shop, interact and make decisions. From a corporate perspective, the question is “what are you doing to embrace that change and to put your organization in a better position tomorrow than it is in today”? To answer this question, organizations need a fast, comprehensive and accurate understanding of their obligations and risks, for both daily operational efficiencies and due diligence in businesses combination endeavors.
We’ve seen a significant increase in inquiries from our corporate clients about technology enhanced solutions to reduce the time, expense and inaccuracies surrounding identifying and addressing these obligations. Daily, they face information management scenarios in M&A due diligence, bankruptcy proceedings, regulatory compliance, GDPR, cyber breach notification requirements, breach of contract litigation, etc.
The following case study illustrates a traditional approach to a contract review project which turned out to be costly, burdensome, time consuming and relied on teams of lawyers performing the review and analysis through hardcopy review with less sophisticated tools.
Several months ago, we met with a large insurer who had been struggling with many contract provision issues. Their team had just wrapped up a project with a population of approximately 40,000 contracts. They had identified a handful of problematic provisions within those contracts and needed to get a better understanding of their company’s exposure. After some internal discussions regarding the best approach, they decided to hire 40 temp attorneys to review the contracts and manually compile the information needed. Each attorney was assigned a batch of 1,000 contracts, with direction for specific provisions to identify. When they came across these provisions, they would manually enter or cut and paste the actual verbiage into Excel spreadsheets, adding their own work product to the files. It took the contract attorneys almost a month to complete the review. Mission accomplished! It had been a long and stressful few weeks for the client, but they had the work product they needed and were able to assess their risks and make the appropriate decisions to modify the documents.
A conservative budget estimate for this engagement was $200,000 for a month of 40 contract attorney labor. When asked if the budget estimate was over or under the actual cost, the client laughed and said “under”! She then asked how we would have approached the project differently.
Utilizing Exego Intelligence, we demonstrated how clients research and compare changes in contract language across documents, pinpoint specific differences between document text– (down to the character) and locate similar paragraphs or clauses across those documents. With time for up front consulting to understand the documents and what in fact the goal was, it would likely be just a few days to complete this project. We then proceeded to demonstrate that once she identified the relevant contractual provisions, our platform could essentially generate the same Excel spreadsheet it in a matter of seconds. This all could be accomplished at a cost significantly less than the $200,000 plus that they spent. Clearly, their team was impressed as we could have saved them a substantial amount of time and money, while delivering a more accurate assessment of the identified provisions. The most frequent comment we hear when demonstrating the Exego Intelligence platform is, “I wish I had this on my last project.”
Leveraging the right technology to gain a comprehensive understanding of your contracts will have a measurable impact on business decisions and initiatives in the coming years.
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