5 signs it’s time to automate your private equity NDAs

AI-powered contract automation is an effective way to free up internal resources to push toward your more strategic goals.

When NDAs, joinders, non-reliance letters, and other repetitive contracts are streamlined and optimized, your team can focus their time and attention on what matters most: closing deals, generating superior-risk adjusted returns, and preparing for potential regulatory changes under the new federal administration.

5 signs you should implement NDA automation

1. NDAs consume too much time

In-house lawyers and deal professionals should be able to dedicate their working hours to valuable strategic tasks that bring the firm closer to its business goals. Yet, these professionals often complain manual tasks like negotiating private equity NDAs take time away from what matters most.

Ontra and Wakefield Research surveyed over 400 professionals across private equity, private credit, real estate, and infrastructure. We found 65% of respondents spent 6 or more hours on NDAs each week. Scarily, 17% of respondents spent 10 or more hours per week on NDAs.

The results get worse when asked if the person agreed that the firm’s NDA process negatively impacted their ability to close a deal in the previous year. Fifty-eight percent agreed in total, including 23% who strongly agreed.

It’s unnecessary for repetitive contract negotiations to take up so much of private equity and investment banking professionals’ time. AI and large language models (LLMs) advanced significantly in recent years, providing the private markets with purpose-built, AI contract negotiation solutions that free their time for strategic and creative work.

2. Non-legal professionals negotiate NDAs

Private fund managers and investment banks may have junior investment professionals or other team members negotiate NDAs and other routine agreements. However, given these professionals’ lack of legal education and experience, there’s inherent risk in relying on them to negotiate contracts on behalf of the firm.

Non-legal professionals might delay the contract turnaround time with unnecessary negotiations, agree to off-market or inconsistent terms across agreements, or in the worst-case scenario, damage a potential business relationship before it gets off the ground.

NDA management also isn’t the best use of investment professionals’ time. Analysts, associates, and VPs are better off focusing on their core tasks, including sourcing and evaluating target deals, closing new deals, and managing portfolio investments. Tasks outside their wheelhouse distract them from activities that create value and impact returns.

3. The firm relies on expensive outside counsel

Nothing will ever replace the value of experienced outside legal counsel — this relationship is vital for complex transactions. However, too many private equity and IB firms still outsource NDAs and other repetitive agreements to their traditional law firms. Typically, the firm assigns this work to associates who manually handle the agreements, which can lead to inconsistencies, long contract turnaround times, and a high price tag.

Repetitive, low-risk contracts aren’t the best use of outside counsel’s time, particularly when considering the hourly fees. By shifting to an AI-powered contract negotiation solution, firms and their outside counsel can focus their relationship on high-priority tasks, potentially lowering the law firm’s invoices.

4. The firm’s deal volume rises

While the industry is wary of the macroeconomic environment and geopolitical issues, there’s plenty of optimism headed into 2025. If interest rates lower and inflation improves, firms will likely see a higher deal volume and, as a result, a higher NDA volume. Firms that anticipate the market changes and embrace NDA automation will be better prepared to evaluate and close new deals faster than their competition.

5. The firm lacks a negotiation playbook

Without an NDA negotiation playbook defining the firm’s preferred and fallback terms, teams might agree to inconsistent and off-market terms. Not only can a lack of a contract playbook lead to drawn-out negotiations, it also can result in more complex compliance efforts. When a firm’s NDAs create a jigsaw of obligations, legal and compliance teams may have a harder time keeping track of requirements and complying with and enforcing each agreement.

Benefit from streamlined & optimized contract negotiations

In recent years, legal outsourcing has evolved into legal automation because of advances in AI and LLMs. Now, leading private fund managers and investment banks are focused on adopting AI legal tech with or without an outsourcing component. Some invest in a comprehensive solution with independent lawyers, such as Ontra’s Legal Network. Others adopt and leverage AI tools in-house to speed up their contract turnaround times no matter who handles negotiations.

Ontra’s AI-powered private market technology platform offers contract automation solutions purpose built for private fund managers, asset managers, and investment banks. We’ve combined the power of LLMs, our proprietary machine learning models, industry-specific data, and our global Legal Network to provide an end-to-end contract negotiation solution.

With Ontra’s AI-powered contract negotiation solution, firms benefit from:

• Accelerated negotiations: Incorporate AI-enabled data insights and workflow tools to negotiate from a position of strength and move contracts forward faster.
• High-quality and consistent terms: Leverage digital playbooks and historical contract information to ensure the same approach to negotiations every time.
• Lower costs: Finalize agreements with fewer internal resources, less external spending, and predictable expenses.
• Increased transparency: Gain peace of mind and never question where a contract stands with insights into negotiation statuses, contract trends, and document details.
• A scalable end-to-end solution: As contract volumes rise, confidently delegate repetitive, low-risk legal agreements according to deal volume and negotiation preferences.

An added benefit: structured contract data

Negotiation assistance alone doesn’t solve all the issues surrounding high-volume NDA management. Ontra’s AI-powered contract automation solutions give you access to structured data from your agreements. You can analyze data and pull actionable insights from the contracts you often take for granted.

In Contract Automation by Ontra, firms can immediately pull up several reports. For instance, a dynamic report provides firms with an overview of their precedent. GCs, CCOs, and investment professionals can easily explore contract provisions like non-solicitation clauses, standstills, and contract duration to both facilitate compliance and determine whether the terms they typically agree to are changing over time.

Ready for NDA automation?

If you’re ready to speed up negotiations, achieve more consistent contract terms, and lower costs, schedule a demo with Ontra today.