According to the 2021 EY Law Survey, two of the biggest challenges legal departments face are risk management and contract inefficiencies.
This post will look at why those challenges are occurring and what steps businesses need to overcome.
65% of respondents to EY’s Law Survey reported that they “do not have all the data and technology they need to respond to a data breach effectively.” Not having the right tech tools can give rise to risks related to both compliance and data privacy.
For example, in many businesses, it is the norm to send contracts via email. But employees sending documents with secure information via email can prove to be a massive liability for any company, even if it is within the organization.
Consider that 6.85 million email accounts are hacked each day. That builds up to over 2.5 billion accounts hacked in a year.
In addition to possible hacks, email communications can allow for things to fall between the cracks. One missed or deleted email, and a contract can be lost. And when a contract goes missing, it can create miscommunication between teams and disgruntled clients.
These potential problems are why we see so many companies turning to cloud-based platforms to store their contracts, which leads us to our subsequent key finding from EY.
EY’s second top challenge legal departments are facing is contract inefficiencies. 57% of business development leaders reported that inefficiencies in the contracting process are slowing their business’ revenue recognition. These inefficiencies are especially concerning when you account for the fact that 88% of General Counsel reported they are planning to reduce the overall cost of the legal function over the next three years.
And these inefficiencies add up. One study conducted by World Commerce & Contracting found that small-to-medium sized companies lose an average of 9.2% of annual revenue due to poorly managed contracts. For larger companies, that figure leaped to 15% of yearly revenue.
Even with storing contracts in cloud-based platforms, team members have to search through multiple clouds to find the documents they need. Once located, the next step is to analyze the document to find the clause that needs to be worked on. All of this is time wasted doing menial administrative work rather than re-negotiating contracts with clients and bringing in potential new clients, which makes the business money.
How can your business overcome these obstacles?
EY’s survey found that 59% of General Counsel reported that the best strategy for cost savings is to invest in greater use of technology. Cornelius Grossmann, EY Global Law Leader, stated, “Technology cannot only deliver cost savings, enhance compliance, and de-risk the legal function, but it can also help deliver on CEOs’ priorities around data-driven risk management and improving business enablement.”
But legal teams reported their companies spend too much time selecting technology, described the implementation of the tech as time-consuming, and said that their teams don’t fully use the technology once it’s implemented.
To solve these issues, companies must choose the most effective and efficient tech tools available.
Zendoc is the most effective and efficient tool
Zendoc is the AI-powered contract automation platform designed to help your team stay on top of their contracts. Our platform integrates into your company’s already existing cloud-based platforms and integrates them into one centralized place.
Zendoc’s sole purpose is to help your team improve compliance, reduce risk, and increase efficiency so they can focus on what matters most, growing your business.
Try Zendoc’s 14-day free trial today! It takes one minute to sign up to gain hours of time saved. Let us provide your organization with everything it needs to stay Zen.