When legal teams begin to talk about their challenges with contract management, the same statements tend to come up again and again.
“Our contracts are everywhere, there’s no single location.”
“I don’t even know how many contracts we have.”
“It would take forever to sort through all these files.”
“We don’t have money to hire someone to make sense of years or decades of legacy contracts.”
And yet, these same legal teams have wish lists a mile long of what they want to do with a CLM if they just put all their contracts into it.
“We want to run reports to analyze historic and current contracts.”
“We want to know how our terms have changed over time.”
“We want to catch exceptions to best practices and areas of potential risk that might be hidden in our contracts.”
Many CLMs promise these capabilities, but rely on the customer to provide clean data. “Garbage in, garbage out,” we’ve all heard a million times. This is where the breakdown happens.
Lots of companies skip tidying their data before starting big projects. But jumping ahead without cleaning up first backfires! Three common myths make these companies and their staff impatient, so they end up installing fancy new systems just as disorganized as the old ones. Rather than saving time and money in the long-run, all that clutter costs them later!
This is why Cleanse is so vital that it’s the cornerstone of everything else we do at Pramata. In this three-part series, I’m going to bust the most common myths about clean contract data and explain how Pramata takes the time, expense, and headaches out of getting it.
Myth 1: It’s literally impossible to get clean contract data
In a world where cars can drive themselves and artificial intelligence can hold meaningful conversations with humans, it’s still common for people to believe that they simply cannot, and will not ever, achieve a state of clean data when it comes to their contracts.
Though mistaken, this belief is understandable. Our 17+ years of experience show that most organizations have no idea how many contracts they have and often drastically underestimate the number when asked. Without a clear grasp of how many contracts you have, and where they’re stored, it does seem impossible to proceed in sorting through them for the sake of data cleansing.
But believing it’s impossible to achieve clean data is more a reflection of past limitations than current realities. I like to draw a parallel to something everyone can relate to, even if you’re not well versed in contract management technology.
Let’s talk about music.
Take a trip with me down memory lane to when Apple released the first iPod and changed the course of digital music forever.
If you were an early adopter of the iPod or another MP3 player, you may remember the time-consuming and manual process of ingesting your beloved CD collection into digital form.
It went something like this:
- Find all your CDs: this may include searching through closets, boxes, under the bed, in the attic, your car, your friend’s car, your parents’ car… you get the idea. Unless you were one of the rare few who meticulously organized your music, your CDs were probably all over the place.
- Import one CD at a time: By sliding a single disc into your computer’s CD drive, you could magically capture the songs from it and add them to your new digital collection. Sometimes, you’d even get the song title, artist, album name, and other pertinent information. But not always. Particularly, if the CD you were importing was burned from a friend or otherwise “unofficial.” But it’s OK because you can add all that information in later.
- Organize your digital music library: After hours, possibly even days or weeks of importing one CD after another, you’ve got a vast music collection that you need to organize. This is when you may want to create playlists by genre or group all songs by a particular artist. First though, you have to make sure every track has an artist, song title, album title, etc. And, if you were a big fan of a certain group, it’s highly likely that your library contains multiple versions of the same song. Maybe you start to label them with titles like “My favorite version” just to keep it all straight.
If you’re starting to see the similarities between this and your organization’s collection of contracts, that’s the idea.
Now, think of how we listen to and organize digital music today. Take Spotify, for example. In one single location, anyone in the world can access the same digital music library. You and your friend can be listening to the same song from the same album at the same time – across the world from one another – but you can’t rename the song to something you like better. Nor can you permanently delete a song from Spotify’s collection (not even by accident!).
The idea of Spotify’s library as a “single source of truth” allows each user to organize and sort their music the way they prefer but not in a way that would cause duplicates and confusion to the master collection.
The clean state of Spotify’s entire music library is how its technology can take it a step further and do all the amazing things we’ve come to expect, like introduce us to music we should like based on our listening history or make a playlist of our favorite songs of the year.
Now, back to contracts.
Just like the idea of Spotify would have sounded unbelievable to us in 2004, some still believe a clean collection made up of decades of contracts is impossible to achieve in 2024.
Not only is this false – it’s entirely possible to get your contracts cleaned up and deduplicated. Plus, it’s mandatory to cleanse your contracts before you can do all the sophisticated things you want to do with your contracts later. How can you analyze your commitments and obligations if you don’t have a clean body of work to start with?
Only with a clean contract repository can you use the information within your contracts to achieve business goals. Everything from cutting down the time it takes to find the active master agreement for a customer to mere seconds, all the way to answering contract-related questions within minutes.
Far from being impossible, Pramata Cleanse achieves this result with very little effort on your part.
We can do this because:
- Cleanse uses our advanced technology comprised of various AI capabilities and Optical Character Recognition (OCR) which can take any type of document from any source and digitize it with unparalleled accuracy. Not only have we been perfecting this technology for over 17 years, but it’s smart enough to flag for human review any documents with a level of uncertainty, rather than making a “best guess” about the content. In those cases, our Expert Assist Team (made up of lawyers and contract specialists) does the work to ensure the document is captured accurately.
- Cleanse automatically recognizes duplicates, even if they have different document titles or are of different document types. These duplicates are flagged as such and moved “out of scope” so they never make it into your repository. This also happens on an ongoing basis, even years down the road, if someone uploads a duplicate into your repository.
- Cleanse extracts the most important metadata from each digitized document, including Signature Status, Document Title, Document Type, Effective Date, Contract Entities, and Account. The result is Scoping Data that allows you to easily filter documents and remove them from your repository in large batches.
With myth No. 1 busted, it’s time to tackle the second pervasive belief about clean contract data.
Contact us to discover how Pramata can help you get clean contract data and more!
