It might be the best-adopted solution in the entire legal industry. But how do you bridge Word's product gaps when it comes to contracts?
Pretty much every business relies on contracts - even startups. From the first employee hired through every deal made, contracts are an integral part of the growth and revenue. Although Word is the universal format for documents, it wasn’t built for contracts. But despite Word’s limitations, the platform ‘hosts’ the majority of contracts currently in existence worldwide.
Here we explore Word’s advantages and limitations when it comes to legal documents. Use the menu below to navigate this resource.
Why use Word to manage contracts?
More than one billion devices worldwide run Microsoft Word, making it the global currency for documents in general. When used to manage contracts, Word offers several advantages:
- Since nearly everyone can use and understand Word, it makes sense to attempt to use it for contracts.
- There’s almost no chance that a contract recipient won’t know how to open a Word document.
- Word documents are just as portable as PDFs, making them easy to send via email or messaging services.
Word is also extremely lawyer-friendly. According to Lawyerist.com, Word is “possibly the most used tool in a lawyer’s toolbox. From drafting depositions to collaborating with teams outside your firm, it’s an amazing tool chock-full of features to help you run your business.”
Creating contracts in Word
Despite its popularity, Word was intended to be an all-purpose word processing tool, not a platform to build and manage contracts. Most contracts created in Word – particularly those for businesses that generate them at scale – aren’t produced from scratch using the text editor.
Instead, they’re made by copying and pasting from existing Word documents, or templates completed manually. These situations can create a disconnect between what is assumed to be in a contract and what is actually there, potentially resulting in severe implications for one or both parties.
Low-complexity or common contracts are often templated, using a contract automation platform, in order to make sure that terms don’t change when team members generate new contracts as they need them.
Take a look at some common templates here:
Negotiating contracts with Word
Negotiating contracts in Word has some advantages. The Word document’s status as a static file isn’t always a disadvantage during negotiations, since one side makes its changes in isolation, sharing them with the other side only when they’re ready to so.
This workflow sometimes makes Word preferable to Google docs when it comes to contracts. Parties (especially lawyers) are often uncomfortable that the other party can see them making changes to an agreement in real-time.
The redlining experience in Word, however, can be challenging because:
- Users often forget to actually *turn on* tracked changes
- Tracked changes can be messy and hard to manage
- Tracked changes only work if they remain securely tied to a specific version
These issues often require parties to chase versions around email chains and via phone calls - a colossal waste of time, particularly for small legal teams with limited time and a laundry list of things to do.
Changes can also be missed or rolled back, and the audit trail of who did what when can be difficult to follow. Worse, when a contract created in Word is saved as a PDF, all negotiation data is gone. Permanently.
Signing contracts in Word
The ability to insert an electronic signature in Word exists, although it’s relatively basic. Here’s how it works: With the cursor where you want your signature to appear, from the ‘Insert’ tab, choose ‘Text, then ‘Signature List,’ then finally ‘Microsoft Office Signature Line.’
At this point, you can set up the signature by entering the signing party’s name. If you’re receiving this document and want to sign it, you can right-click the signature line and click ‘Sign’ to insert your signature. There is a level of certification behind the digital signature you see in Microsoft Word.
Post-signature, contracts created in Word are static files without metadata. At best, they are saved to a shared device; at worst, they reside on a local drive. Once saved, a contract review tool may be necessary to read contracts created in Word, and obligation management can be tricky, as Word does not generate renewal reminders, contract negotiation data, and so on.
This means that alongside Word, to make a robust contract workflow a reality, you’ll likely also need to pay for an eSignature solution, a storage solution, and an obligation management solution. This can quickly get extremely expensive - particularly for scaleups and enterprise businesses.
Pros and cons of Word for contract management
The advantages of Microsoft Word rest primarily with its broad availability and ease of use. Word is the most widely adopted text editor in the world, and users can safely assume that it will be available to anyone they are sharing documents with, even those halfway around the world. Word arguably has the best text editor available, at least judging by how many people use it. Word is so commonly accepted that every other text editor that strays from its principles – think Pages by Apple or Apache’s OpenOffice Writer – feels strange, uncomfortable, and unintuitive by comparison.
Although virtually everyone can use Word, that doesn’t mean it’s ideal for every type of document. Much of Word’s functionality aims to reproduce the hard-copy experience in a digital format with static files. Because of this, contracts, in particular, face several challenges concerning Word:
- Word documents are uncollaborative. Suppose the parties want to change the content of the contract during negotiations. In that case, they have to redline it using tracked changes, which leads to multiple versions, version control issues, confusion, and friction.
- Word documents are static files. Like PDFs, Word documents are difficult to search within and integrate with other systems as part of a data pipeline.
- Word documents lack most of the broader features needed for contracts. Approval workflows, negotiation, mass actions, analytics, and frictionless eSigning are generally not Word options.
Document creation using templates is often highly labor-intensive. While it is possible to transfer values from a spreadsheet into the defined fields of a Word table, this process often proves to be too complex for most users. While effective for word processing, the Word editor’s functionality is limited to simple text. If you want to embed multimedia or responsive images, Word’s page-based structure will have trouble coping.
Another issue with using Word for contract creation is version control. This problem, which occurs at every stage of the contract lifecycle, persists because Word documents are static files rather than dynamic, in-browser documents built from structured data that update in real-time.
How to manage contracts with Juro
If you want the rich editing features of Word but need more robust and expansive features to handle the specific needs of contracts, Juro offers an in-browser editor custom-built for contracts.
Although Juro’s text editor doesn’t have the depth of word processing features that Word offers, it does provide comprehensive formatting, font, and layout options. Instead of an editor for basic documents that can also be used for contracts, Juro offers an editor built on a JSON layer that was purpose-built for contracts. Its editing functionality enables actions like:
- Tagging certain areas of the contract as ‘smart fields’ (metadata containers)
- Commenting in the sidebar to highlight areas that merit discussion, need approval, or require negotiation
- Creating conditional logic to build fallback positions and variations into the contract
- Contract locking to prevent certain users from changing certain portions of text.
- A timeline that enables users to scroll back through previous versions with one click.
Instead of a copy/paste process, Juro users go through a Q&A flow to populate the smart fields in the contract. This procedure gives them the ability to quickly enter essential values without the risk of changing something that should remain standard in every contract derived from that template, enabling non-legal users to work with contract language safely. Juro is an entirely cloud-based solution, with documents built from structured data and accessible in-browser. Version control isn’t an issue because parallel versions don’t need to be created and saved locally.
Finally, electronic signature is a breeze on any device, thanks to Juro’s native eSignature:
Time to switch from Word to a more robust option?
Are you ready to move your contracts from Word to Juro’s browser-based collaborative platform? Find out what contract automation can do for your business today by hitting the big green button below.