A new survey of how companies handle post-signature contract renewals and other key milestones has found that 15% of people in inhouse legal teams use Post-it notes, and 12% said they would write reminders ‘on their hand’, (see table A below).
The data, gathered from UK companies ranging from £100,000 to £500m+ in revenue, is a stark reminder of the challenges faced when it comes to leveraging contract data. It also underlines the potential for CLM software companies to add real value.
The survey by ContractWorks also found that 34% used their phones to set contract reminders, and 20% still used a paper diary.
The survey also found that overall, most businesses do not focus on managing contract information and obligations once those documents have been signed. 71% of those surveyed said they either agreed, or strongly agreed, that their business didn’t focus enough on these issues (see table B).
Only 2% of those surveyed said they strongly disagree with the idea their company didn’t track contract obligations properly….and that is a real ‘Wow’ moment.
ContractWorks MD, Mark Rhodes, said: ‘This new data suggests that unwanted contract renewals are costing UK businesses more than a billion pounds* a year, and shines a light on the costly practice of ‘file and forget’ once agreements have been signed.
‘But missed renewals are only one consequence of losing visibility of live agreements. Failure to stay on top of contract obligations can result in non-compliance, with consequences including financial penalties, lost customers, reputational damage and even formal disputes.’
So, there you go. The next time someone mentions contract data consider just how far behind the market is in terms of actually implementing tools that can help them in this area.
(* The average value of a contract that was automatically renewed was £29,807 – so if extrapolated across all large companies in the UK you get a ginormous total figure.)
For ContractWorks, Censuswide surveyed 100 In-house lawyers, Legal Operations professionals, Heads of Legal, Chief Legal Officers, Legal Directors, Legal Officers, Company Secretaries, Legal Managers, Legal Counsel / Senior Legal Counsel and General Counsels.