At Nimble, we use a contract management system to create, negotiate, execute, and manage contracts for our clients (and ourselves!). We offer this as part of our Contract Review Managed Service. Automation and data are two of the great benefits provided by a contract management system.
Impediments to Execution
When I was a General Counsel, our internal clients dreaded how long it took for contracts to be reviewed, negotiated, and signed. There are many impediments to getting a contract signed including:
The draft sits in someone’s email inbox for days/weeks;
Unrealistic positioning by either side;
A one-sided initial draft;
A one-sided marked up draft returned;
An unwillingness to compromise; or
A multi-step internal review and signature approval process.
Transparency and Value
In a manual contract review process there is not much transparency to highlight the bottlenecks. A contract management system creates that transparency. It provides users with data to improve the contract review process. Ad that data helps lawyers show the value of legal service delivery. One way we show value to our clients is to show them the average Execution Cycle Time for contracts.
Data from the NDA Review Process
We thought it would be interesting to look at the average Execution Cycle Times for Non-Disclosure Agreements (“NDAs”) since we launched Nimble in September of 2016. We review a lot of NDAs as part of a Managed Service for our clients. To calculate average Execution Cycle Times, we measure the amount of time (in days) from a request to create or review an NDA until it has been executed by all parties.
Average Execution Cycle Time for NDAs: 4.1 days
We then dug into the data to see what is the average length of the term of an NDA (in months). In the population of NDAs sampled, the term ranged from 2 months all the way to 144 months. We tossed out any NDAs that had a perpetual term as those are outliers.
Average Term for NDAs: 57.3 months
What’s your law firm’s or law department’s average Execution Cycle Time for NDAs? How long is the average Term for NDAs?
If you found this post interesting, take a look at some past posts from below.
4 Tips to Picking Your Next Legal Services Partner http://nimbleconsultingservices.com/blog/2017/10/9/4-tips-to-picking-your-next-legal-services-partner
The 19 Metrics That Matter in Delivering Legal Service http://nimbleconsultingservices.com/blog/2017/8/24/metrics-that-matter-in-delivering-legal-service
The 7 Features You Need in a Contract Management System http://nimbleconsultingservices.com/blog/2017/4/5/the-7-features-you-need-in-a-contract-management-system