Contract Tech May Still Be Negotiating Its Future Post-Pandemic
While contract negotiation tools may have seen a bump in consumer interest during the pandemic, could those gains be challenged as employees slowly return to offices and are able to resume face-to-face negotiations?
May 27, 2020 at 03:17 PM
4 minute read
Many areas of corporate legal life have gone online during the pandemic—staff meetings, courtrooms, e-discovery—and some may even stay that way after lawyers and other company employees are permitted to return to a physical workspace. However even with a wide array of technologies at their fingertips, attorneys may find that the state of contract negotiations won't look too different than they did prior to COVID-19.
Ronald Prague, executive vice president, chief legal officer and corporate secretary at Synchronoss Technologies Inc., theorized during last week's Corporate Counsel webinar series "Legal Operations In a Time of Disruption" that many companies may choose to permanently shutter select office locations in an effort to drive greater cost savings and allow employees to work from home. But one aspect of the in-house legal experience that Prague did not expect to remain in a virtual forum is negotiations.
"What we've missed is the in-person negotiation, and I think that's just not the same when you are on Zoom or [a] Microsoft product. That I think is just something that I think will come back where you really are going to be more productive getting everybody in the same room," Prague said.
However, products that can help automate and expedite the contract negotiations process at a distance continue to receive interest from investors. For instance, contract review platform LexCheck announced earlier this month that it had secured $3 million during a recent series A seed round. LawGeex, a contract review platform that automizes redlining and other core processes, also completed a $20 million financing round this month.
While other contract review platforms may not have opened any financing rounds this month, they may be seeing a boost in clients who are adapting to remote working conditions under COVID-19. Martin Rand, CEO of Pactum, indicated that the artificial intelligence-powered negotiation tool has seen a "surge" in interest since the pandemic hit.
Pactum uses AI and data pertaining to client-specific negotiation priorities to help companies make or renegotiate basic vendor or service contracts. Because many of those deals are often negotiated on a massive scale, Rand doesn't expect the company to lose any of the gains it made once working conditions return to normal.
"We believe that tools like Pactum will continue to be used broadly once everyone is working face to face again. Pactum handles negotiations on a massive scale and many of these negotiations never even took place because they were too time-consuming for humans," Rand said in an email.
However, it's not just time that corporations may be looking to save in the face of a COVID-19 economy. Instead, companies might be paying more attention to how contract clauses are leveraged across the organization in order to drive cost cuts.
BlackBoiler, for instance, is a contract negotiations platform that includes a bespoke library of standard negotiation clauses that is specific to each client. Founder and CEO Dan Broderick noted that the company has seen an uptick in consumer interest during the pandemic as companies look to drive both efficiency and a faster return on investment.
Still, he believes that it's still too early to tell whether or not that interest will sustain in a post-COVID world. The outcome will likely depend on how much longer people are forced to work remotely or virtually.
"I think if we can get to a point where it's not just interest but interest to adoption to widespread use within an organization and you get embedded, then there's no going back," Broderick said. "But if everything kind of returns to normal in the next month or two I don't know that it will have that long-term impact that everybody is saying it will."
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