Contract data abstraction means extracting important data points which include clauses, dates, and meta-data from your contracts. Abstracting essential information from your contracts will help you manage and identify existing contractual commitments. Additionally, this will enable you to analyze risks, obligations, and opportunities to avoid potential legal disasters.

80% of corporate legal professionals say that they expect greater use of technology to improve their productivity

In this article, we will explore what contract data abstraction is and why it’s important and provide 4 signs to know if you need to implement contract data abstraction in your organization

Signs to know if you need it

• Working In silos

The larger the company, the more divisions, and the more these divisions work in silos. This can limit contract visibility and deepen silos that become a drag on growth. Having access to a centralized contract management system with extracted metadata for quick review can help overcome the problem.

Silos can cause various issues such as reduced visibility into contract data, resulting in missed deadlines, lack of collaboration, and duplication of effort. By implementing contract data abstraction, you can overcome these problems and gain visibility into your contracts across departments, enabling better collaboration and more informed decision-making

• Laborios Contract Review

If you have more than a few hundred contracts and need to abstract several different attributes, it demands planning, oversight, and lots of error checking. Doing it manually requires covering every word of every contract. Contract data abstraction can help automate this process and save valuable time and resources.

By leveraging legal tech solutions for contract data abstraction, you can improve the accuracy and efficiency of contract review. Automation can help you quickly extract relevant data points, reduce errors, and free up time for more strategic tasks.

• Missed Timelines

If your contract has expired, and you are unaware of it, you are vulnerable to compliance, audit, and many other legal risks. Being careful of what’s in your contracts allows you to renegotiate terms before they expire and safeguard you from any gaps or delays on your projects.

Contract data abstraction can help you stay on top of key contract deadlines, such as expiration and renewal dates. By automating the contract management process, you can ensure that you never miss a deadline again, and avoid legal risks associated with expired contracts

• Revenue Leakage

A sales representative spends a lot of time negotiating, reviewing, and obtaining approvals during the contract execution phase. There are chances that you might come across a few changes. Say, if a changed renewal or expiration term gets unnoticed by your sales team, it could lead to a loss of revenue or a valuable client.

By implementing contract data abstraction, you can improve revenue optimization and prevent leakage. By automating the contract management process, you can ensure that you never miss a critical term change or revenue opportunity again.

Schedule a demo to learn how you can accelerate your contract management processes with contract data abstraction services.