Business contract automation

Contract Templates vs Automation: Which is More Efficient?

If you're a business owner, you're no stranger to the importance of efficiency. Finding ways to streamline your operations is crucial, and that includes your contracts. Contract templates and automation are both popular options for making your contract process more efficient, but which one is better? In this article, we'll explore the pros and cons of both options and help you decide which one makes the most sense for your business. Let's dive in.

Advantages of Contract Templates

Saves Time

Contract templates save time in the following ways:

  1. Eliminate the need to create a contract from scratch, saving hours of work
  2. Provide a consistent format and structure, reducing the time spent on formatting
  3. Include standard terms and clauses, avoiding the need to write them out each time
  4. Allow for quick and easy customization by filling in the necessary details
  5. Can be easily replicated and used for similar contracts, saving even more time.

Cost effective

Contract templates are cost-effective in the following ways:

  1. No need for legal personnel: With contract templates, fewer attorneys or paralegals are required as the work can be done by anyone with a basic understanding of legal terms and concepts.
  2. Time-saving: Contract templates eliminate the need to start drafting from scratch, thereby saving time, effort, and resources.
  3. Reduced outsourcing costs: If a company has a significant number of contracts that require drafting, outsourcing costs can quickly add up. Contract templates save money by avoiding the need to outsource.
  4. Standardization: Standardization of contracts ensures consistency in language, structure and formatting, reducing the time required for reviews and revisions.
  5. Reduced errors: With standardization, it is easier to identify and correct errors, reducing the need for legal redrafting and associated costs.

Overall, the cost-effectiveness of contract templates can be an attractive option for companies of all sizes looking for an efficient way to manage legal documentation.

Consistent Results

Consistent results in contract templates refer to creating standardized documents that ensure uniformity in language, formatting, and structure across all contracts. Here are some key points to explain this concept further:

  • By using a template, businesses can ensure that their contracts abide by legal requirements and include all necessary terms and conditions.
  • Templates also allow businesses to set their own predetermined rules and clauses, which leads to more consistency in their contracts.
  • Consistent results make it easier for parties signing the contract to understand the document and avoid any confusion or misunderstandings that may arise from inconsistencies.
  • Templates can also ensure consistency between contracts created in-house and those created by external lawyers or contractors.
  • By reducing human intervention in drafting contracts, templates reduce the risk of errors, discrepancies, and emissions.

Disadvantages of Contract Templates

Limited Flexibility

When it comes to contract templates, they can be restrictive in terms of flexibility. In other words, they may not be able to cater to every single need or particular situation. This means that you may have to make some compromises when using a contract template. For example, you may find that a contract template doesn't allow for certain clauses or provisions that you think are crucial to your particular situation.

Additionally, contract templates are often one-size-fits-all, which means they may not be applicable to every jurisdiction or industry. This can lead to potentially disastrous mistakes in terms of legality or compliance.

Overall, while the use of contract templates can be beneficial in many ways, it's important to understand their limitations, especially in terms of flexibility. It's up to each individual to weigh the pros and cons and decide whether a contract template will work for their particular needs.

Restrictive Use

Restrictive use refers to the limited scope of usability of contract templates. While these templates offer quick drafting and standardized clauses, they may not be amended or personalized. This can result in overlooking the unique aspects that may be integral to a particular agreement. The use of the template may not consider specific laws, regulations, or practices applicable to an industry. Therefore, the output may not always suit the intended purpose.

Similarly, templates may not accommodate the specific needs of different parties that may be bound by the terms of the contract.

As a result, it is important to carefully review a contract template and ensure that it is tailored to the particular needs of the parties involved before it is executed.

Lack of Personalization

Contract templates offer convenience and speed in creating legal documents, but they come with limitations in terms of personalization. This means that pre-written templates may not fully reflect the unique needs and details of a specific contract or agreement. The templates may not include specific clauses or terms that are specific to a particular industry or company. This can result in important details being left out, which can lead to legal disputes and misunderstandings.

Additionally, using templates does not allow for the incorporation of personal preferences or negotiations between parties. When contracts are not personalized, they can lack the attention to detail that is necessary for them to be effective. This, in turn, can result in a lack of trust between parties.

Overall, lack of personalization can be a disadvantage of using contract templates, especially when it comes to complex agreements with important details.

Advantages of Automation

Time-saving Efficiency

Time-saving efficiency is one of the main advantages of automation in contract creation. It refers to the ability to create contracts quickly and accurately, with minimal human intervention. Here's how automation achieves time-saving efficiency:

  1. Fast and accurate processing: Automation software can process large volumes of contracts in a short period of time while ensuring accuracy and consistency.
  2. Customization: Templates can personalize contracts based on specific requirements such as names, addresses, and dates, saving time and effort.
  3. Automated reminders: The software can automatically send reminders to parties involved in the contract, alerting them of deadlines or upcoming milestones, reducing the need for follow-ups.
  4. Auto-populate provisions: Predefined provisions can be automatically filled in the contract by the software, helping avoid errors and saving time.
  5. Streamlined processes: Automatic access to previously negotiated terms, contract history, and insights removes guesswork from maintaining contracts and speeds up the process.

Time-saving efficiency is an essential feature because it allows businesses to focus on their core business activities while still managing their contracts effectively.


When we talk about "accuracy" in the context of automation, we are essentially referring to the ability of the system to carry out tasks without making any mistakes. Automated systems can consistently produce the same accurate results, often faster and with less human error compared to manual processes.

For example, when an automated system is used to produce a contract, it is programmed to input the required data in the proper format, eliminating the risk of typos or missing information. In addition, automated systems can cross-check data with other sources and flag inconsistencies or errors, ensuring the accuracy of the final document.

Overall, the accuracy provided by automated systems is a valuable feature for businesses looking to streamline processes, reduce errors and improve efficiency. It gives organizations confidence that their documents and data are accurate and error-free, reducing the need for manual corrections that can slow down work and lead to costly mistakes.

Increased Productivity

Automation can lead to increased productivity by streamlining repetitive tasks and reducing human error. By using specialized software tools, businesses can automate tasks such as data entry, document creation, and email notifications. This frees up employees to focus on more complex tasks that require their expertise. Automation can also run 24/7, allowing businesses to work around the clock and meet tight deadlines. In short, automation can help businesses do more in less time, increasing their output and ultimately their profitability.

Disadvantages of Automation

High Initial Costs

High initial costs refer to the significant amount of money required to invest in an automation system. This can include purchasing the software, hardware, and additional equipment necessary to implement the system. While the benefits of automation may seem appealing, the cost of acquiring and setting up the system can be daunting. Companies must decide if the long-term benefits of automation outweigh the upfront costs.

Additionally, there may be ongoing maintenance costs, training fees, and other expenses associated with using an automated system. Ultimately, businesses must weigh the financial impact of adopting automation against the potential gains in productivity and time savings.

Learning Curve

The term "learning curve" refers to the time and effort required to learn a new skill or process. In other words, it is the time it takes for an individual or team to become proficient at using a new technology or system.

This curve can be gradual or steep depending on the complexity of the technology or system being learned. A steep curve means that it takes a longer period of time for someone to learn how to effectively use the system, whereas a gradual curve means that it can be mastered relatively quickly.

There are various factors that can impact the learning curve, including the level of support provided during the learning process and the individual's aptitude and attitude towards learning.

Additionally, the learning curve is not always a linear process, and there may be dips in performance as the individual or team navigates through new challenges and roadblocks.

Overall, the learning curve is an important consideration when evaluating new systems or technologies and should be factored into any decision-making process.

Risk of Errors

Automated contract creation carries a risk of errors due to several factors related to the technology itself or human error. Here are a few reasons why there might be a risk of errors:

  1. System glitches: The automation system may have a glitch, leading to unintended consequences, such as incorrect data entry or inapplicable clauses in a contract.
  2. Incomplete data entry: Incomplete or inaccurate data entry can lead to incorrect clauses in the contract, or missed terms that might be crucial to the agreement.
  3. Overreliance on technology: Relying exclusively on automated systems can make it easy to miss errors that can only be caught by a human. For instance, grammatical mistakes or inconsistencies may slip through the cracks of the system.
  4. Failure to input a critical clause: The automated contract creation system is programmed for specific instructions, which can cause important clauses to be missed or not included.
  5. Lack of human judgment: Automated systems cannot substitute human judgment entirely, and even with the best programming, some nuances might go unnoticed.

It is vital to consider these risks when weighing the benefits of automation in contract creation, as human judgment creates a crucial layer of oversight that can catch unintended consequences and errors.

Which is More Efficient?

When it comes to choosing between contract templates and automation for creating and managing contracts, the question arises - which one is more efficient? While both have their pros and cons, the answer will depend on your business needs, contract volume, and budget.

Contract templates are ideal for businesses that have a set of standard terms and conditions that they use frequently. They can save time and effort by avoiding the need to create a new contract from scratch each time. Contract templates are cost-effective as they can be created in-house easily, and they provide consistent results. However, templates are limiting in terms of flexibility and customization. They don't allow for personalization, and there is a risk of important details being missed.

On the other hand, automation software can provide accurate and efficient creation and management of contracts, especially for businesses with a high volume of contracts. It saves time, increases productivity and eliminates errors. However, it comes with a high initial cost and a learning curve, and the risk of errors is not completely eliminated. Moreover, automation software will not be of use for small businesses with a low contract volume.

So, the answer to which is more efficient depends on your unique business needs and the volume of contracts you have. For small businesses with a low contract volume, a contract template would suffice. For businesses with a high number of contracts, automation would be a better option in terms of time, cost, and accuracy. Ultimately, the best solution is to find a way to automate the contract creation process while leveraging the use of templates to provide flexibility and personalization.

Over to you

Contract templates and automation are two popular approaches to streamline contract management processes. Contract templates provide a standardized starting point, while automation automates contract generation and management tasks. Both have their advantages and drawbacks, and determining which is more efficient will depend on factors such as the size of the organization, the complexity of contracts, and the level of customization required.

However, in general, the use of automation can resultin increased efficiency, reduced errors, and minimized risks associated with contract management. Nevertheless, contract templates can also be a useful tool, especially for organizations who deal with relatively simple contracts or have limited contract management needs. Ultimately, the best approach will depend on the unique needs of the organization.