Faster NDAs give private fund managers a competitive advantage

One way to bolster your competitive advantage as the market expects increased dealmaking is to streamline your firm’s NDA process. According to a survey by Ontra, conducted by Wakefield Research, 58% of respondents said their firm’s NDA process had hurt their ability to close a deal in the past year. Faster, more consistent NDAs enable you to dive into due diligence earlier, make decisions quicker, and close on winning assets.

Take a look at the disadvantages of relying on traditional, manual NDA negotiations vs. the advantages of implementing an AI-powered contract negotiation solution.

Common delays during manual NDA negotiations

High in-house workloads & task switching

When private fund managers handle NDAs and other high-volume contracts in-house, the work often falls on in-house counsel or business professionals. Both groups must task switch and oftentimes deprioritize strategic work to complete these agreements in a reasonable time.

According to Ontra’s survey, 65% of respondents said they spend an average of six or more hours per week on NDA negotiations. Because these professionals must find the time for NDAs between other tasks, they often inadvertently slow down the process.

Lack of predefined contract terms

Another reason for delay stems from firms lacking contract playbooks. In Ontra’s survey, 84% of respondents said their firm had developed guidelines or a playbook for negotiating NDAs, but only 33% strongly agreed with the statement, “My firm negotiates consistent positions on common terms across all of our NDAs.”

Without predetermined stances or abiding by the firm’s playbook, those handling NDA and other high-volume contracts might fully negotiate each agreement from scratch. This undefined process could lead to unnecessary negotiations —- particularly if the professional takes a strong, off-market stance — and inconsistent terms across NDAs.

Non-legal professionals negotiating these agreements may need to consult with counsel to determine how best to mark up these terms, requiring more time for escalations.

Off-market terms

Off-market terms are more likely to arise without carefully crafted contract playbooks or when playbooks are not easy to follow. Instead of negotiating from one reasonable position to another, one side must tackle an unreasonable request, which takes time and could even prematurely end a potential relationship.

Outside counsel

Some private fund managers send NDAs and other repetitive agreements to their outside counsel. While the law firms that typically work with private fund managers and investment banks have a wealth of expertise, low-level associates tend to handle high-volume contracts.

These junior associates likely face similar issues of having high workloads and no contract playbooks to use in negotiations. They might also not be skilled negotiators, leading them to take overly strong stances and, at times, demand off-market terms. Associates might delay NDAs with unnecessary negotiations instead of focusing on reasonable market terms and efficiency.

Tracking negotiation status

Team members also waste time trying to ascertain the status of a contract negotiation. With traditional contract workflows stuck in individual inboxes, they have to spend time searching for the latest email thread and following up with other colleagues or counsel to ensure they have the latest status.

7 ways Ontra streamlines contract workflows

Ontra’s AI-powered contract negotiation solutions enable private fund managers to finalize NDAs and other repetitive agreements faster, allowing them to get into due diligence and the meat of their deals sooner.

1. User-friendly interface

Ontra provides an intuitive platform designed specifically for private markets contract workflows. The central dashboard allows users to see and manage the status of ongoing contract negotiations in one place, drastically improving visibility across teams. Users can easily search for and retrieve documents, reference precedent and playbook materials, and generate contract summaries.

2. Digital playbooks

Ontra enables managers to upload a digital contract playbook that includes preferred terms, fallback terms, and other negotiation notes, such as unacceptable and preferred language. Playbooks enable organizations to rely on a single source of truth and drive strong, consistent negotiation outcomes.

For customers who choose to rely on Ontra’s contract negotiation services, the digital playbooks ensure Ontra’s global Legal Network members can quickly mark up contract drafts and move negotiations forward. The customers’ defined positions significantly limit the back-and-forth necessary to finalize an agreement.

3. Similar Documents

Ontra’s proprietary algorithm surfaces similar agreements also digitized in the platform. The solution can organize multiple versions of agreements, search across your saved agreements, and automatically generate redlines exportable to Word.

4. Market terms

Ontra can provide private fund managers with visibility into current, on-market terms. Ontra’s global Legal Network has processed approximately 1.5 million documents for more than 800 financial services clients. Given Ontra’s extensive experience and insight into private equity NDAs, we can guide our customers in recognizing off-market terms and correcting positions that would likely delay negotiations.

Firms that choose to utilize Ontra’s global Legal Network often rely on Ontra’s hyper-efficient standard NDA playbook. In this playbook, Ontra leverages its expertise to determine on-market preferred and fallback terms. As a result of our off-the-shelf playbook, many of our Contract Automation customers finalize NDAs within a few quick rounds of negotiations rather than days or weeks of back-and-forth.

5. AI suggested edits

Ontra’s Markup Builder feature surfaces contract precedent information quickly and suggests markups based on the firm’s historical documents and contract playbook. Users can edit markups directly in the platform or export the suggestions in seconds.

6. 24-hour review time

Customers who rely on Ontra’s contract negotiation services in addition to the technology solution benefit from a standard 24-hour turnaround time — or same-day processing upon request — on markups of the agreement. Such immediate attention to a new contract ensures negotiations get started and move forward without delay.

7. Electronic signatures

Ontra’s Contract Automation platform includes a DocuSign integration, which can be added for Accord users. While many parties already rely on some form of electronic signatures, the DocuSign integration enables Ontra’s customers and outside parties to efficiently execute finalized agreements through the platform on any device.

Your choice: insource or outsource contracts

Ontra has established a global Legal Network of independent legal professionals to represent Ontra’s customers in NDA and other contract negotiations. Many of Ontra’s Legal Network members have in-depth experience in private funds, enabling managers to avoid stretching their in-house teams too thin or paying outside counsel’s significant fees. Ontra vets and trains its Legal Network members to provide the best possible representation to private fund managers and investment banks in all major jurisdictions.

However, outsourcing isn’t right for every fund manager. Our customers can choose to leverage Accord. AI-powered contract negotiation solutions allow our customers to streamline contract workflows in-house, rely on the Legal Network for negotiations, or both.

Faster NDAs, faster deals

Private equity NDAs are a necessary part of the fund lifecycle. Yet they can delay essential due diligence during a high-stakes time. By leveraging Ontra’s AI-powered Contract Automation or Accord solutions, private fund managers benefit from more efficient contract workflows and shorter NDA turnaround times.

To learn more about Accord, request a demo today.