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How to automate a Non-Disclosure Agreement (NDA)

Jeremy Huitson, 7 April 2020

NDAs are some of the most common contracts in the business world. They should be easy to negotiate and sign, but that's usually not the case. How can automation reshape the end-to-end process?

In a Non-Disclosure Agreement (NDA), the parties agree on confidential material they’d like to share with each other, but prevent from being shared with third parties. NDAs enable confidentiality and privacy when it comes to sensitive or proprietary information, like commercial terms, product information or trade secrets. NDAs are amongst the most common contracts in the business world, with applications everywhere from sales to employment or publishing.

Let’s explore the reach and the impact of NDA workflows within a company, both pre- and post-automation. Use the navigation menu below to find out more.

Without automation: who's involved? | What's the process? | What are the pain points?

With automation: who owns the templates? | Who creates the contracts? | Who are the approvers? | Who are the authorized signatories? | Useful features | Integrations you'll find useful | Benefits of automation | Achievable time savings | Manage NDAs with Juro

  

The old world: without automation

Who is involved?

Due to their ubiquity, NDAs affect numerous teams, and in different ways.

  • Multiple personas might need to send out NDAs, including but not limited to salespeople, legal counsel, HR teams, finance, operations and procurement. Anyone who needs legal certainty around confidentiality is a potential user

  • Legal counsel typically own the NDA template, and usually have the approval rights too (although a particularly sensitive NDA may require the approval of someone specific in the leadership team)

  • Authorized signatories internally will then need to sign

 

What’s the process?

A painful process around the creation and management of NDAs is one of the most common complaints we hear from business users hoping to automate their contract workflow. At its worst, the process looks something like this.

A user in the business emails a member of the legal team and says “I need an NDA.” The legal counsel, likely buried in work, suggests that the user finds it themselves on the shared drive; she might eventually relent and email one across. Somehow, the user finds a template (not necessarily the most current version), fills in various fields in square brackets and emails it to the legal team to review. Legal corrects various details and returns it to the user.

The user then sends the NDA to the counterparty, who may comment and mark up the document in Word, emailing it back. Eventually agreement is reached and both parties sign, either with a wet signature and a sign/scan/send process, or an eSignature provider.

Once signed, the NDA will hopefully be emailed to the relevant parties and stakeholders (legal, sales and so on), and hopefully saved on a shared drive.

What are the pain points?

When we ask new legal customers or prospects what the biggest pain they face is regarding contracts, it’s rare for them to get through the first sentence of their response without sighing the letters ‘N’, ‘D’ and ‘A’. Pain points include, but aren’t limited to the following:

  • Low-value work: “I’m the General Counsel, responsible for the company’s legal affairs, and yet I spend significant portions of my time telling business colleagues where they can find a document on a shared drive over and over again”

  • Version control risks: “As a salesperson I never know which the most up-to-date template is - are these the right terms?”

  • Incorrect templates: “Do I need the unilateral NDA or a mutual version?”

  • Unprofessional: “Our NDAs vary so much and aren’t standardized - as well as being risky, this looks amateurish”

  • Wasted time: “Negotiations on these NDAs are getting lost in my emails”

  • Lost metadata: “I don’t have visibility post-signature of our NDAs - I’m uncertain as to which of our commercial relationships are governed by confidentiality”

 

The new world: with automation

Who owns the templates?

Legal counsel should still be the owner of the NDA template, or templates, in an automated workflow. They can define terms and enable business users to generate their own contracts.

Who creates the contracts?

At Juro we see business users of all kinds self-serving NDAs from templates. Typically the highest volumes come from sales teams, who send NDAs along with MSAs and order forms to new prospects. However, people teams might send NDAs to new employees or contractors; or in the media industry, journalists and editors might send NDAs to ensure exclusivity for a story.

Users will use the Q&A flow to enter key data in smartfields, like counterparty name, counterparty email address, effective date, and so on. This data will autopopulate the generated contract, and be searchable afterwards.

It’s important to communicate widely as to who can generate NDAs, to meet the business’ demands; some companies even use automation to allow the generation of an NDA through a bot, following a specific command in Slack. This kind of approach depends on risk appetite.

juro-NDA-screenshot

 

Who are the approvers?

Although NDAs have many applications, and are comparatively low-risk, it’s important that legal teams retain control and oversight of terms. NDAs are seldom heavily negotiated, but it can happen, and the decision-makers as to those negotiations still need to be legal personas.

Who are the authorized signatories?

Authorized signatories for NDAs won’t vary too much from other kinds of contracts - they could range from sales managers to CEOs depending on the size and structure of the company.

Useful features

  • Self-serve contract generation: by using a Q&A flow to create documents from locked templates, business users can generate legally compliant contracts in seconds, without needing legal input

  • Approval workflows: defined roles for legal approvers are necessary to ensure that NDAs can move quickly between stakeholders

  • Internal commenting: if standard terms are to be varied, it’s useful for internal stakeholders to be able to collaborate in real time on the document, without needing to worry about audit trails and version control

  • External redlining: similarly, although negotiation isn’t common, counterparties need to be able to negotiate the NDA without having to move into Word, losing audit trails and data

  • eSignature: given the volume and velocity of NDAs, particularly in a high-growth business, eSignature is particularly important to make sure the workflow is frictionless

 

Integrations you’ll find useful

  • Salesforce: if sales documentation lives primarily in CRM, then it’s useful for NDAs to be live-synced between the two systems. Sales teams also achieve velocity by creating NDAs directly from Salesforce

  • Companies House: the best contract automation solutions allow UK users to use the Companies House API to make sure data, such as a company’s legal name or registered address, is accurate

  • Slack: high-growth tech companies often live on Slack and send high volumes of NDAs. This means it’s useful for contract automation to integrate with Slack, for transparency between teams

 

What benefits do automators report?

The automation of the NDA workflow is often the first place that Juro customers start, and the benefits can be realised immediately. They include:

  • The correct NDA version is used: if teams generate NDAs from a defined template that legal owns, the risk of the wrong version being used is mitigated

  • NDAs are agreed faster: as a low-negotiation document, there’s no reason why NDAs should take much time at all to agree. Automation can make this a reality by removing bottlenecks from the process

  • Legal gets their lives back: without a constant stream of NDA queries, lawyers are empowered and enabled to do the actual work they trained to do, and be strategic partners to the business

 

Achievable time savings

NDAs can be so straightforward and standardized that an automated process from creation to signature can realistically take place within a few minutes - perhaps the biggest bang for your buck in contract automation. Moving from the labour-intensive Word > comment > email > print > sign > scan process to an automated workflow described above typically saves Juro users up to 99 per cent of time on NDAs.

Manage NDAs with Juro

“It takes 90 seconds to generate and sign NDAs in Juro”

- Legal counsel, Tooploox (read more)

Join the fast-paced legal teams streamlining the end-to-end contract process and getting NDAs signed within seconds instead of days in Juro. Get in touch to find out more, or explore our case studies with Habito, Eton Shirts and Shieldpay.

Don't forget to download our eBook, 'Contract automation: start small, win big' to explore the quickest wins in document automation.

Topics: Contract magic

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