Extracting crucial data elements, specifically metadata, from contracts can be a complex and time-consuming task. Manual contract data extraction involves painstakingly opening each contract, searching for relevant language throughout the entire document, and copying and pasting the data into tools like Excel. To streamline this process, companies seek innovative solutions to effectively extract metadata from contracts.
What Is Metadata in Contracts?
Metadata refers to important structured information extracted from contracts or related documents. It consists of key fields and values that help organize contract data for reporting, compliance, and operational efficiency. The type and importance of metadata can vary depending on the nature of the contract.
Below are the most common meta-data attributes that are generally extracted along with the other contract-specific attributes:
Time and Effort in Manual Metadata Extraction
Time studies show that extracting just one attribute manually takes around 2 minutes. With an average of 30 metadata elements per contract, that’s about 1 hour per document.
Consider this:
-
10,000 contracts × 30 metadata fields = 5,000 person-hours
-
Include tasks like quality control, OCR scanning, document organization, etc., and the effort jumps to 8,000+ person-hours
If a team of 5 people works 7 hours a day, 19 days a month, this task alone would take them approximately 1 year.
Strategies to Extract Metadata from Contracts
There are three common approaches to extracting metadata:
1. Fully Manual Extraction
- Involves legal professionals or contract managers manually reviewing and abstracting data.
- Cons: High risk of human error, inconsistencies across team members, slow process.
2. Fully Automated Extraction
- Uses contract analysis or AI-driven software.
- Cons: Legal language is nuanced; software may miss context or misinterpret clauses. Requires installation, training, maintenance, and ongoing quality control.
3. Hybrid Extraction (Technology-Enabled Service)
- Combines automation with human review.
- Software extracts metadata, and a trained team validates the data.
- Pros: High accuracy, scalability, and faster turnaround.
- Bonus: One vendor provides both tech and service—”one throat to choke.”
Choosing the Right Approach
While automation sounds attractive, the quality and accuracy of extracted metadata can make or break your contract analytics. A hybrid solution provides the best of both worlds—speed from automation and accuracy from human expertise.
Before embarking on a metadata extraction project, evaluate:
- Volume and complexity of your contracts
- Required turnaround time
- Regulatory or compliance risks
- Availability of internal resources
Final Thoughts
Extracting metadata from contracts is a strategic task that can streamline contract management, improve visibility, and support business growth. A hybrid approach offers the most reliable, scalable, and cost-effective method.
Looking to extract metadata from contracts without the hassle? Reach out to us to learn how our technology-enabled services can help.