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The excitement of contract analytics

June 28, 2017

Yes, I really do get excited by contract analytics! After more than 35 years working in a field where almost everything was based on opinion and personal judgment, I find the potential of working with facts truly amazing. Just take this chart as an example (click to view).

NDA Outline Analysis

The chart reflects system-based analysis of non-disclosure agreements from multiple companies. The columns to the right show commonality (where higher values reflect that a clause appears regularly) and consistency (where higher values indicate that the clause has similar principles). The clauses with a red circle are the most negotiated (common and variable), the clauses with a green circle are standard (common and consistent), and the clauses with a yellow circle are optional (less common in the set).

This type of analysis offers organizations the chance to benchmark, For example, building from this summary, it is of possible to extract ‘norms’ – in other words, what does a typical clause look like. Equally, an organization can see whether their experience of ‘most negotiated’ coincides with the experience of others.

NDAs are a fairly simple example of this form of analysis. With more complex agreements, the data becomes even more interesting and can assist organizations in understanding competitiveness, ease of doing business and – potentially – any link there may be between the contract terms and the success of the outcome.

For years, lawyers and contract managers have had to muse over their advice and decisions, having little substantive or objective data to draw from. The wealth of information that will now become available offers the chance to exert far greater influence and to deliver far more value to the business.

IACCM is working with a growing number of members to support this type of data extraction and provision and, in some cases, with groups of companies which provide contract samples, which are then anonymized before in-depth analysis.

 

One Comment
  1. Faisal Shah permalink

    Hi, would like to learn more about it and I think I’m able to provide some data as well. It would be great if I could find more details of the given info.

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