Agreements today: 3 problems with 3 causes
There are three fundamental problems with contracting today:
- They cost a lot of money (lawyers, fulfillment, compliance).
- They take a lot of time (3–6 months to sign).
- They carry huge risks (litigation = ∞ time & money).
There are three main causes that underpin each of these problems equally:
- Limited trust in the market: The world is complex; there are many companies, and it is difficult to trust that people will do what they say. As a result, your lawyer adds more clauses to protect your rights, which takes more time, costs more, etc.
- A large back-office is needed to fulfil signed contracts: Some of the agreements Delos currently automates contain over 48 interconnected terms, fees, and conditions. Multiply that by 100 clients, then by 4–6 jobs per month, and you're looking at exponential back-office growth.
- Lack of visibility: Most people don't really know what's in the contracts they've signed.
Overall, if your company's sales doubled, you'd likely see your back-office grow by 1.7 to 2 times.
The Unacceptable Status Quo
This is what happens with contracts today at every company:
STEP 1: Negotiate and sign agreements (some software speeds this up, but too much time is still spent on the process).
STEP 2: Upload the same contract into various SaaS solutions to manage its fulfillment (on average, companies put one contract into nine different programs).
STEP 3: Still end up doing tons of manual work. Here's a scary truth: despite the countless Legal Tech tools available, the number one software for contract management today is… Excel.
Why It's Not Enough
The fundamental problem is that current approaches improve different parts of the contractual workflow but don't replace it. They offer patches to individual issues but not a cure for the underlying problem.
And the underlying problem is the contract process itself.