Category: Artificial Intelligence

3 Things to Consider When Signing a Non-Disclosure Agreement

Posted on August 11, 2020 by - Artificial Intelligence, Business Process Management, Contract Lifecycle Management

Non-disclosure agreements (NDAs) establish a confidential relationship between parties who share sensitive information. A well-drafted NDA can protect sensitive information from being shared with others without your consent. Without NDAs, any information shared can be taken advantage of or publicly disclosed.

Following are some tips when creating and/or signing an NDA to ensure that you protect your best interests:

Q: What is the Scope of Confidentiality?

Make sure the purpose of the agreement is clearly understood and defined. Consider what the permitted use of information is and how long you are expected to keep it secret. Otherwise, the other party could use your information for their own benefit, or you could be expected to keep the information private for years, etc.

Q: What is the Definition of Confidentiality?

It is important to specify the kinds of information you want to protect or exclude from protection under this agreement and make sure to include that in your definition of confidentiality. If you don’t get specific, your discussions may not be legally protected or you may risk accidentally breaching the agreement.

Q: What Happens if There is a Breach of the Agreement?

Pay attention to the consequences of breaching the agreement and avoid any extreme penalties, such as liquidated damages or indemnities. Otherwise you may be facing an expensive legal bill.

Being informed empowers you to make smarter legal decisions now and in the future.

Review your next NDA agreement with ReviewAI. Try out the Confidentiality Skillset to find core issues quickly when protecting your confidential information, and further your understanding and obligations of confidentiality.

 

The NDA FAQ: Ask These 6 Questions Before Signing that Nondisclosure Agreement

Posted on July 31, 2020 by - Artificial Intelligence, Contract Lifecycle Management

If you work in an office environment, chances are you’ve signed or sent a nondisclosure agreement (NDA) — perhaps without reading through all of the terms and conditions. On both sides of the equation, the importance of a well-written NDA is often overlooked. A poorly written agreement can lead to some gnarly (yet very avoidable) headaches, such as accidentally waiving your rights to sue for intellectual property infringement, costly indemnities or information leaks.

Before you pick up that pen, ask these questions about the important legal clauses in an NDA to understand your obligations of confidentiality and save yourself and/or your company future trouble.

Q: What is an NDA?

It’s important to first examine what a non-disclosure agreement is and is not. NDAs are used to protect sensitive information from being shared with others and to build trust between parties who have sensitive discussions. Without NDAs, any information shared can be taken advantage of or publicly disclosed, resulting in good ideas being stolen.

Q: What is the Purpose of the Agreement?

When you sign an NDA, you agree to share information for only a specific, stated purpose. This purpose needs to be thoroughly and clearly provided in the confidentiality agreement so that either party can easily identify incorrect usage of the information, if necessary, down the road. If the purpose(s) provided is vague, it can become a lot harder to prove or disprove that a party broke the terms of the NDA.

Q: What Information Falls under the Definition of Confidentiality?

NDAs are all about protecting confidential information, so it will be important for you and the other party to understand what kinds of information you both consider to be “confidential” and what information is excluded. State the type of information you want to protect or exclude from protection under this agreement (i.e., financial information, specific sets of data, unique processes, etc.) and include in your definition of confidentiality.

Q: What are the Remedies for Breach of Confidentiality?

The damage caused by breaching the agreement can vary by the kind of information involved and how serious the breach is. Equitable remedies — special legal help from a court — focus on preventing irreparable harm caused by the breach. It is important to state the kinds of equitable remedies you want to be able to access in case things go wrong, including specific performance, injunction and restitution.

Q: What is the Duration of Confidentiality?

Keeping a secret can be hard; keeping a secret for a long time can be even harder! This clause sets out the length of time you have to keep information confidential. It is important to know how long you need to protect information under this agreement so that you can set up business practices appropriately.

Q: What Happens When Confidential Discussions End?

What will you do with confidential information once discussions are over and the agreement has ended? What do you want the other person to do with your information? It is generally good practice to include in the agreement the obligation to return or destroy confidential information. The less information you hang onto, the less likely you are to accidentally disclose the information!

Being informed about the various legal clauses in an NDA empowers you to make smarter legal decisions now and in the future.

To learn about artificial intelligence helps you quickly draft, review, redline and edit all types of contract, visit here.

5 Areas of Law and Contract Management Becoming More Relevant in the Age of COVID-19

Posted on July 17, 2020 by - Artificial Intelligence, Contract Lifecycle Management

No matter what industry you’re in, there’s no doubt that COVID-19 is changing both the way work gets done and how workers spend their time in the legal sphere — especially in the contract management arena. The pandemic has impacted the global economy, our healthcare systems, insurance claims, the prevalence of remote work and more.

Lawyers are busier than ever in this “new normal;” however, the kinds of legal contract reviews they are conducting are shifting.

Here are five practice areas that are becoming even more relevant in the wake of the coronavirus outbreak.

Bankruptcy/Restructuring

Recent headlines have been filled with news of Chapter 11 bankruptcies, including J.C. Penney, Neiman Marcus, J. Crew, 24 Hour Fitness and many more. According to Epiq Systems Inc., Chapter 11 business bankruptcy filings increased 26% in the first half of this year, and U.S. courts recorded a total of 3,604 business filings for Chapter 11 protection, an unfortunate side effect of the pandemic. Lawyers are doing more work with debtors, creditors, equity interest holders and other entities that may be interested in a business (such as a prospective acquirer) that is confronting financial difficulties.

Health Law  

This varied area of legal practice encompasses a range of transactional and regulatory matters, including mergers and acquisitions and joint ventures for healthcare entities. Other work may include litigation concerning healthcare clients, enforcing governmental health and FDA regulations, conducting internal investigations and assisting with technology transactions, IP and data privacy. Digital health practices are constantly changing, and lawyers are keeping pace with the many legal changes that accompany the technological advances and regulatory updates the healthcare industry is experiencing during this pandemic and beyond.

Insurance

While the safety of employees and customers is on the forefront of company’s minds, mitigating financial losses that have come with COVID-19 so that they can continue to operate is another huge priority. Risk managers, in-house counsel and internal crisis management teams continue to pore over their insurance policies (i.e., first-party property insurance, cancellation insurance, etc.) to determine whether there is existing coverage to offset losses and liabilities. Legal teams are pulled into the mix when litigation is needed to resolve a dispute over coverage terms.

Employment

Lawyers in the employment arena represent companies or individuals in labor and employment disputes, draft policies and procedures, advise on union issues including unfair labor practice and discrimination charges, review employment and separation contracts, etc. Legal topics that are coming up more than ever before as the world grapples with coronavirus include issues of confidentiality, disability-related inquiries, health coverage, paid sick leave, reduction in force and more.

Privacy and Data Security  

This certainly isn’t a new area of law; the 2018 introduction of the GDPR in the European Union has affected the way companies do business globally. As both private companies and governments explore different ways to combat and prevent the spread of COVID-19, data collection and analysis of health and location information have become key tools. However, there is a balance that must be maintained between personal privacy rights and public well-being, a prime subject of newly proposed federal privacy legislation. While this legislation is being drafted, companies are taking steps to ensure that they are minimizing the collection of employee data to only what is reasonably necessary as well as utilize cybersecurity solutions to protect their employee and client data

Artificial Intelligence and Contract Management

As the M&A work, insurance disputes, employee settlements, new privacy policies, etc., pile up on lawyers’ desks, there is more pressure than ever before to be efficient and mitigate risk to the company.

That’s why more legal teams are using contract management solutions powered by legal AI to get their work done, including ReviewAI, our contract management tool.

ReviewAI is a Microsoft Word Add-in that enables lawyers to be 51.5% more productive. This contract management system provides more consistency in the contract review process by alerting the user when language and legal clauses don’t match corporate standards. Users can also leverage any of our immediately available contract review templates created by subject matter experts in areas such as employment, dispute settlement, confidentiality, data privacy and more. Learn how ReviewAI can transform your contract management lifecycle here.

8 Crucial Items for Your Procurement ReviewAI Checklist

Posted on July 1, 2020 by - Artificial Intelligence, Business Process Management

No matter what company you work for or which industry you’re part of, procurement contract review is likely part of your daily life as a member of the legal team. Whether it’s ordering basic office supplies to keep your workplace running or more complicated like buying raw materials in bulk for multiple products, you should have a procurement process in place to make the purchasing process move smoothly.

Procurement is an important element of a company’s overall corporate strategy as it directly relates to the bottom line. Given the required collaboration between multiple departments, it’s important to have a procurement contract review checklist available to make sure the legal document’s terms are in line with corporate standards, helping avoid any delays or rejection of procurement.

Here are the top 8 things you should look for when redlining a procurement contract.

  1. Determine the level of delegated authority. Nail down who is responsible in your organization for routine purchases, who controls the acquisition of all the company’s requirements, etc.
  2. Define cost restraints. Establish the types of commitment and pre-set financial limits that staff are permitted to enter into so it’s clear for the legal team reviewing.
  3. Doublecheck the basics. It’s easy to get bogged down in the minutiae of the contract, but don’t forget about the nuts and bolts: parties’ names, price and dates/deadlines.
  4. Look for automatic renewals. Get familiar with the steps your company will need to take if you do not want the procurement contract to renew, and any associated penalties. If you do make the call to let the contract auto-renew, verify that the terms are favorable for your organization and are fair to both parties.
  5. Put safety and quality first. Part of your job is to ensure that only reputable suppliers are used. Make sure to include contractual obligations such as compliance with local health and safety laws and require updates regarding safety information for substances and industrial products directly in purchasing documents.
  6. Search for how changes will be processed. Requiring advance written notice for processing changes in purchase orders to the organization is always advisable.
  7. Verify the duration of the contract. Determining your corporate standards for the duration of contract is an important legal detail. Whether it be 12 months or 36 months, make sure the entire legal team is aware and on the lookout for the duration clause during the legal contract review process.
  8. Implementing a procurement contract checklist in your contract review workflow can help avoid costly mistakes. However, the best way to ensure that no stone (or legal clause) is left unturned is to supplement the human lawyer’s efforts with legal automation technology.

There are many types of contracts that are related to the procurement and supply chain world. ReviewAI now supports the following:

  • Purchase and Supply Review: Quickly check for common key issues when reviewing purchase and supply agreements such as payment terms, warranties and termination rights.
  • Statement of Work: Save time reviewing statements of work by being alerted to common issues, such as termination, liability and dispute resolution procedures.
  • Letters of Engagement: Use this review to quickly check for key issues in engagement letters, including scope of service, payment terms and warranties. In addition, the new procurement skillset automatically takes you to the key issues when engaging in procurement-focused contracts and helps you understand your contractual obligations. You can use this skillset to build reviews to evaluate your supply chain, risk exposure and contract management lifecycle.

As you start defining your internal contract review process, be sure to arm yourself with the best legal technology and knowledge to improve efficiency, decrease risk and promote effective procurement. Learn how ReviewAI can help.

How to Automate ReviewAI for Increased Legal Team Efficiency

Posted on June 24, 2020 by - Artificial Intelligence, Contract Lifecycle Management

It’s no secret that legal teams are notoriously slow in adopting new technologies like contract automation. The work is far from digitalized — most lawyers print, read and annotate hard copies of legal documents (hence the origins of the phrase “redlining contracts”) — and make their final edits within Microsoft Word as the only electronic step in the process.

Without effective contract management tools, the contract review process remains slow, requires enormous attention to detail and is prone to costly errors.

Consider the case of a junior professional reviewing a contract that requires more than a few changes.

While reviewing modifications that seem reasonable, but do not fit the corporate standards, the contract professional needs to send the revised agreement to a more senior lawyer for legal review and approval. While this is happening, the line of business manager is emailing the contract team, asking for a status update. Countless emails are sent back and forth while multiple business days are lost.

This bottleneck directly impacts a company’s ability to reach favorable contract outcomes, and ultimately impacts the bottom line.

Many new positions within legal departments are created to handle contracts and legal compliance, yet most legal departments still confront a persistent headcount shortage. Instead of continuing to hire more and more lawyers, legal departments need a new AI solution that delivers significant productivity gains, allowing lawyers to utilize their skills, experience and talent on higher-value business objectives.

Enter a Word Add-in and legal document automation software that allows lawyers to dramatically streamline many activities typical of legal work, such as redlining contracts, comparing clauses to corporate standards, and ensuring that fine details comply with corporate policy.

In a comprehensive study, Onit examined the impact of its legal AI assistant, ReviewAI, on the productivity of in-house lawyers during routine contract review and compliance activities.

The study required lawyers to review contracts across three contract types – supply, service and confidentiality – and perform five tasks – summary, analysis, comparison, repapering and drafting. Together, these tasks reflect the day-to-day activities of compliance checking, standard reviews and contract drafting, all of which are typical of the contract management role.

For each contract, participants had to validate 285 items against corporate standards as accurately and quickly as possible. The participants performed the exercise manually for half of the study, referring to the company clause bank precedents as needed. For the other half of the study, participants were required to install, learn and use ReviewAI to enable contract automation.

The impact of legal AI on the contract management lifecycle included:

  • Lawyers who were new users were 51.5% more productive when using ReviewAI than when working manually, and that productivity increased the more proficient they became with the contract management tool.
  • It took 34% less time for lawyers to perform their day-to-day work. That translates to a team of 19 lawyers being able to do the work of 28, reducing cost to process each contract from $592 to $395.50 on average.
  • The manager of the contracts team, a senior lawyer with significant legal and business experience, was able to reallocate 15% of his time to higher-value activities.

For a typical legal department, utilizing ReviewAI enables lower costs, increased knowledge retention and improved contract quality, delivering an estimated 45x multiple on the cost of the ReviewAI investment.

To see ReviewAI in action and learn more about the return on investment it can bring to your legal team, book a demo and we’ll show you the ropes.

You can also read the full-length whitepaper for more info on our study.