Onit

Oct 17, 2014

How Ad Hoc Turns NDAs into Nightmares

There are times when ad hoc can be a wonderful thing: when groups come together as a committee for a special event, or when an urgent and isolated situation calls for a creative solution. However, when it comes to a critical business activity such as administering Non-Disclosure Agreements (NDAs), ad hoc solutions can be a disaster. Merriam-Webster’s very definition of ad hoc is “for the particular case at hand without consideration of wider application,” and when companies go ad hoc with NDAs, inconsistency and non-compliance become the norm.

Many organizations have tried standardizing their NDA process from start to finish, beginning with word processing templates. But the problem with document templates is that they, too, develop into ad hoc solutions as users customize the NDAs for their particular situations, recycle previously modified NDAs, and change provisions until the document sent to the other party is very different than what the company intended.

The next step in the NDA process is sending the document to the other party, getting confirmation of receipt and then tracking whether or not the NDA was countersigned. If your NDA process is ad hoc, no one keeps track of whether or not the document was signed by both parties, nor does anyone know if, and where, the signed NDA is filed. Considering our dependence on electronic communication, if the signed NDA is received by the originating party, then it is likely left to languish in an inbox or email folder. While most of the time this isn’t an issue, sticky situations can arise if dealings with the other party go awry, and the company cannot find the signed NDA.

Many companies have tried to standardize tracking with another ad hoc solution, the spreadsheet. Someone in the legal department inputs when NDAs are sent out, if the NDA needs to be renewed, and whether or not it was received. However, this approach doesn’t take into account NDAs being created and sent on the fly. It also depends on human input at every stage and doesn’t give you real-time visibility into the process. Additionally, the spreadsheet may be buried on someone’s hard drive or in a folder on the server, which may cause problems down the road if the employee has left his/her position.

With one ad hoc solution piled on top of another, it’s no wonder that what should be a simple agreement between two parties to kick off a business relationship turns into something that can leave a gaping hole in your legal state of affairs. Ad hoc is the enemy of repeatability, efficiency, and risk management. It undermines all attempts to standardize processes and is not a long-term solution for an ongoing business need. Ad hoc is the problem, not the solution.

The answer to ad hoc is something that can standardize the process and bring its lifecycle full circle: Onit’s NDA App. The right solution is an App that integrates into document management repositories, allows users to track status, provides users with the ability to create standard NDAs, and routes non-standard NDAs to the appropriate person for review. It manages renewal and termination dates and non-standard terms. The end result is a closed-loop process that helps the company comply with internal policy requirements and external legal obligations, all while keeping the NDA process efficient so that your work can commence.

Need to eliminate ad hoc from your critical business processes? Learn more about Onit’s NDA App in this white paper.

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