A common problem plagues private investment firms: Too many NDAs and not enough time or resources to turn them around quickly.
In an increasingly complex environment where deal teams review dozens of target companies to identify and win attractive investment opportunities, firms are battling an ever-growing volume of contracts like NDAs during the investment process.
Private markets firms need to move through their NDAs quickly, yet these agreements often become a bottleneck, slowing down deals and financing opportunities.
Ontra’s AI-powered Legal Operating System for Private Markets has helped automate mission-critical legal processes across the full fund lifecycle for hundreds of investment firms. These firms use Contract Automation to negotiate and execute NDAs quickly and gain a competitive edge in dealmaking.
Take a look at how three Ontra customers, Blackstone, Sentinel Capital Partners, and Fir Tree Partners, cut their NDA processing time and freed up valuable time and bandwidth for their teams to focus on dealmaking.
Challenge #1: Lack of bandwidth for NDAs
In-house legal and deal professionals don’t have enough time to negotiate NDAs and complete higher-value work (at least without working late nights and weekends). They need to focus on their core strategic work but keep getting pulled away to deal with routine contracts, especially when they become a fire drill. It’s called task switching, and it can cost someone hours of productivity each week.
Private equity firm Sentinel Capital Partners typically handles up to 1,000 NDAs per year — each of which can take multiple hours to manually review and negotiate. Despite the growing volume of contracts, it has a lean legal team of only three in-house lawyers. To compensate for legal’s lack of bandwidth, Sentinel’s entry-level investment professionals marked up NDAs, relying on a loose playbook drafted by an external law firm.
“[Sentinel’s NDA process] wasn’t something I could take over myself,” said GC and CCO Vincent Taurassi, who joined in 2015. “I’m only one person, and we review too many NDAs. So, I revamped our playbook and instituted a more robust training program for the associates,” he recalled.
However, the training and review program still required a significant time investment from Taurassi and was unsustainable. Not to mention, the repetitive NDA reviews were time-consuming and took investment professionals away from deal work for the firm.
Blackstone’s Growth Equity Investor Hannah Kim faced a similar challenge as her team worked to source attractive investment opportunities. Executing an NDA is the gating activity to receiving key business information about a potential target and initiating the diligence process.
Challenge #2: Inconsistent NDA terms
As a global asset manager, Blackstone has various departments processing NDAs, so it was crucial to ensure that different teams within the company were aligned on standard negotiating parameters.
However, demanding consistency across teams delayed the execution of NDAs and placed a significant burden on in-house teams. The inefficient NDA process could drag on for weeks, delaying the growth team’s ability to begin diligence on a potential investment.
Challenge #3: Slow turnaround times with outside counsel
In an attempt to free up internal bandwidth, many firms send NDAs to outside counsel. Unfortunately, for firms like Fir Tree Partners, relying on law firms is inefficient and expensive.
Traditionally, Fir Tree’s legal team handled routine contracts in-house or sent overflow to their law firm. Despite charging high hourly rates, outside counsel moved too slowly for high-volume legal documents that called for fast turnaround.
Fir Tree wanted to reduce resource burn associated with NDA negotiations and leverage data analytics to empower better decisions. They needed a software platform and a service provider that could standardize the contracting process and own the negotiation process so its internal team could focus on higher-value work.
How Blackstone, Sentinel Capital, & Fir Tree slashed NDA times & unlocked bandwidth
Many firms looking for an alternative to insourcing NDAs or outsourcing to outside counsel have discovered Ontra’s Contract Automation can help them solve their most pressing challenges quickly and cost-effectively.
Ontra’s Contract Automation solution offers a comprehensive solution of AI-powered software, a global Legal Network, and customized digital playbooks. Contract Automation is powered by OpenAI’s GPT-4, Ontra’s proprietary machine learning models, and industry-specific data to accelerate workflows while reducing cost and risk.
Blackstone
Hannah Kim of Blackstone was thrilled with Ontra’s standardized and simple onboarding process, which helped her team get up to speed quickly. Even more important than easy onboarding was the degree of fidelity that allowed Blackstone to rely on Contract Automation to complete NDA negotiations quickly, thoroughly, and with the right expertise.
A large firm like Blackstone needs to ensure that all the NDA terms it accepts remain relatively uniform across a high volume of contracts. Because Contract Automation provides a summary table of all key terms in each NDA, it’s easy to spot nuances across agreements. This visibility into its contract data allows Blackstone to achieve consistency without straining its investment professionals’ bandwidth.
“Ontra has really helped us unlock numerous efficiencies and gives the deal team a lot of leverage so we can focus on what really matters,” said Kim. “That includes doing needed diligence and building deeper relationships with the management team and founders so we can be a trusted advisor and partner in the next leg of their journey.”
Sentinel Capital Partners
Sentinel Capital’s onboarding was seamless: Ontra translated its existing NDA playbook into a standardized format and worked with the firm’s legal team to understand its needs and workflows. Routine check-ins with their Ontra account team ensure the playbook stays up to date and adapts to market changes.
Contract Automation streamlines Sentinel’s NDA process, and the quality of the work done by Ontra’s Legal Network meets Taurassi’s high standards. The vast majority of Sentinel’s NDAs require zero intervention from Taurassi’s team. The remaining few that need in-house legal review are flagged automatically via timely, custom email notifications and require just 15-30 minutes of someone’s time.
Ultimately, Sentinel Capital automated 600+ NDAs each year, reducing time spent on NDAs by 80% and saving 1,200 hours each year.
“When you’re an in-house lawyer, there’s a ton of workflow — things you don’t anticipate that come in on a day-to-day basis that need to be turned around quickly,” Taurassi shared. “Ontra cuts down on that ‘underbrush’ work that takes me away from strategic thinking and executing on bigger decisions.”
Fir Tree Partners
The Fir Tree legal team partnered with lawyers in Ontra’s global Legal Network to create custom contract playbooks for NDAs, NRLs, joinders, and vendor contracts to standardize negotiations across the organization. After successfully leveraging Ontra for NDAs, Fir Tree transferred ownership of vendor contract negotiation.
Fir Tree Partners outsources 100% of its NDAs to Ontra and has experienced a 50% reduction in NDA turnaround time.
Additionally, Fir Tree utilizes automated reporting on the Ontra platform, enabling the legal team to maintain meaningful oversight over the entire contracting process. Fir Tree now has access to instant insights from all contracts and can easily extract key data points and provisions when called upon.
“Since partnering with Ontra to process routine legal contracts, we’ve saved an extraordinary amount of time and resources,” shared John Ringwood, Deputy General Counsel at Fir Tree Partners. “Our team can now focus on higher-value work and strategic initiatives. The legal department is seen as a strategic advisor to the business, rather than a hurdle to clear.”
AI-powered Contract Automation: Your firm’s path to efficiency & success
Hundreds of the world’s leading private markets firms use Ontra’s Contract Automation platform to accelerate the speed and reduce the costs and risks of repetitive contract negotiation. Most firms now wrap up their NDAs in a matter of a few days.
Key benefits of working with Ontra:
- One-stop-shop: Ontra provides AI-powered software solutions and access to a global network of legal professionals so firms can scale to meet their business needs. Ontra’s human-in-the-loop model with hundreds of lawyers in our network gives firms the best of both worlds.
- Powerful AI capabilities: Ontra has been adding machine learning and AI capabilities to Contract Automation since 2016. Now, our AI engine, Synapse, includes both proprietary and commercial AI. In 2023, we integrated OpenAI’s GPT-4, the leading commercial LLM on the market, into Ontra’s solutions.
- Round-the-clock service: NDAs can come in at any point of the week, and firms can quickly send an NDA to Ontra’s experienced legal professionals. First reviews are turned around in 24 hours, with faster processing available.
- Levels of customization: Our Standard, Advanced, and Premier tiers mean Ontra can match a wide range of budgets and needs. For instance, we offer a standard NDA playbook based on market-appropriate terms for firms that don’t need customized provisions while also offering unlimited customization in Advanced and Primer tiers for firms with unique needs and negotiation preferences.
- Simple onboarding process: Implementation is often a sticking point for firms considering a new NDA solution. Ontra has an efficient and quick implementation process to get firms started ASAP.
- Predictable, low costs: Ontra offers competitive rates and a tiered structure to match a firm’s needs and budget. Firms benefit from a usage-based, fixed-fee pricing model as well as the ability to allocate fees as fund expenses efficiently.
Ready to reclaim your time? Streamline NDAs with Contract Automation
If your firm struggles with a high volume of NDAs, LP transfers, and other contracts, you and your teams can reclaim valuable time that you could spend on strategic and high-value initiatives.
Sign up for a Contract Automation demo today.
