9.3 A workflow within contract assembly applications
A few contract assembly applications, such as the Weagree Wizard, contain a workflow. This is a very powerful functionality and invaluable in companies and notarial practices (as opposed to law firms).
Formalising procedures. A workflow keeps track of all kinds of procedures within a company and ensures that standard activities of employees are automated and handled in a well-defined, structured manner. As part of such procedures, business activities requiring a contractual basis are automatically passed on to the legal counsel.
Typical actions in relation to a workflow include:
initiating a business activity by assigning a job to a particular person (e.g. requiring a contract to be drafted in the contract assembly software by a business line manager);
review and approval of the assembled contract by the legal counsel (with automatic release of the document to the manager); and
if desired, further approval by or reporting to senior management.
In large organisations, such workflow-centred activity is picked up easily because employees would monitor their workflow application regularly. A basic workflow should be capable of covering the above actions. In addition, the span of this initial workflow can be extended beyond the creation of a first draft contract.
Contracts created by the business. The workflow functionality allows a legal department to introduce approval rights. This enables the legal department to expand access to the Wizard to business line managers. Is it responsible to allow business managers to create contracts? Yes, because everything a business manager can add or modify is controlled by the legal department. Moreover, the legal department may still require that the generated contract is only released after their legal review (or approval). Such expedited process encourages a business line manager to create a contract (instead of trying to avoid the involvement of the legal department). Accordingly, the workflow enables senior management to improve risk management and compliance by introducing contract approval rights.
Monitoring capabilities. A workflow also provides a real-time insight in the activities of operational units and individual employees, including their compliance with corporate contracting requirements. A workflow enables senior management to monitor business transactions by supervising the contract cycle.
Structuring contracting processes. The workflow in the Wizard enables general counsel to formalise contracting processes and enables senior management to further divide transactions into sub-stages, each of which may require separate approvals and the involvement of different persons. Simple, routine contracting processes can be handled efficiently when they are automated.
Management tool for organisational inefficiencies. With a workflow, senior management gains an actual insight in the performance and productivity of entire business units as well as individual employees. Standardisation by way of the workflow enhances the comparability of performance by business units or individual employees. On the basis of this insight, more effective guidance for improvement can be given. Because ‘cause’ and ‘effect’ can be analysed and linked adequately, bottlenecks can be dealt with effectively.
Monitoring and management control. A workflow functionality enables general counsel to monitor transactions and compliance with corporate contracting requirements. The workflow fosters compliance with contracting requirements; the extent to which individual business line managers or staff departments are ‘in control’ of their processes can be evaluated on the basis of workflow data. (The more contracts led through a workflow, the more transparent a business unit’s activity or legal counsel’s workload will be.)
Transparency and risk management. The monitoring capability does not only apply to the business operations but also to the performance of business units and individual legal counsel. A workflow makes their (contracting) activities transparent. When activities become visible, the lack of a contracting discipline can be remedied and the company’s risk management improves. Likewise, the workflow data also enable adequate compliance audits.
Periodic reporting. Legal counsel no longer need to prepare extensive periodical reports on their work: the workload becomes largely visible in the workflow. Equally, such periodic reporting can be reduced to meaningful explanations of other activities. Alternatively, such reports can be confirmed by information in the workflow.
Controlling the contract cycle. The span of a basic workflow can be extended beyond the creation of a first draft contract. Such extension of the workflow can cover contract-preceding approval rights (e.g. for making an investment or starting a project) and be followed by final internal approvals or even by post-transaction notifications (e.g. that a price revision is due or that claim rights expire). Accordingly, the entire contract cycle can be supervised and evaluated based on hard figures.
Flexibility. The workflow can be customised such that the entire lifecycle of a contract is captured and the relevant contract information is forwarded separately to a document-management system. (Metadata from the questionnaire can be transferred automatically to the DMS (document management system) together with the generated document.