What are legacy contracts?
Legacy contracts are legally binding agreements that are either active or have matured. Sometimes, these contracts can be decades old, making them hard to find or process. While technology has made life easier in terms of actually preparing and navigating contracts, the use of too many tools can often add layers of complexity to fairly straightforward tasks. This complexity with regard to legacy contracts can come from using multiple storage formats – such as Word, PDF, or even paper – as well as multiple storage locations – such as internal networks, external networks, personal storage devices, personal computers, file sharing software, paper filing cabinets, and others.
What is contract migration?
Migrating contracts is the task of entering all data and metadata from contracts into a central contract lifecycle management (CLM) system so that all of a company’s contracts are in the same place and in a consistent format.
The migration process can be quite labor-intensive, requiring a combination of software and people for the most accurate results. Paper documents and digital files are put through optical character recognition software to convert typed, handwritten, and printed text into machine-encoded text.
A number of data fields are extracted from the contracts, based on the standard or customized requirements. It is good practice to decide on what fields will be extracted beforehand so as to help with accurate and value-based reporting.
All the documents and extracted fields are then uploaded into the CLM system, making it easier for users to find and retrieve information from what is now a structured database.
Why do legacy contracts need to be migrated?
There are numerous benefits to migrating legacy contracts. First of all, legacy contracts are important as they contain a significant amount of information regarding past decisions that could offer the framework for future negotiations and company strategy.
Migrating contracts to a CLM system makes sure that companies have access to all pertinent information from the contracts quickly should they need it for future reference. It allows for critical information to be reported in time so that there is minimal scope for breach of contract or missing obligations. Migration can also help companies safeguard against compliance violations by easily tracking clauses that may be impacted by any regulatory changes.
This process can go a long way in helping companies bring down their overall costs and make more accurate forecasts about company performance.
Contract migration services
There are a few ways for companies to fulfil their contract migration needs. For companies that already have a CLM system, they can work with external service providers for extraction and migration. The service provider works with the company to decide on the fields that need to be extracted and then uploads all the data on to the company’s CLM system.
Some CLM providers themselves offer these services, allowing companies to opt for a fully integrated solution that includes extraction and migration. The CLM provider either uses an internal team or a third-party specialist for these tasks.
At Cenza, we offer these services directly to companies as well as CLM providers. We have partnerships with leading digital contract management platforms, including ContractWorks and Ironclad. Cenza’s team comprises skilled lawyers who ensure highly accurate contract migration and extraction results to our clients.