A change in tax code created an opportunity for huge tax savings, and a need for our client, a large oil and gas exploration company, to get a handle on managing several mostly paper-based legal contracts. The tax code change was potentially favorable, but like many large corporations, they had no corporate standard for storing and managing their legal documentation.
Even after our client decided that they needed to digitize over a million of its contracts in order to effectively organize and store them, it still faced many challenges:
- Growth by acquisition: Because the company had grown quickly by acquisition, there were multiple processes in place for contract organization and utilization.
- Various contract versions: Each department maintained their own filing system for contracts and license agreements – these legal documents were stored inconsistently in either paper or electronic format and often duplicate copies were stored across departments with each department potentially keeping different versions of the same legal document. As a result, it was difficult to identify the latest legal contract or agreement and who had the latest versions.
- Large volumes of paper-based contracts: There was a need for local resources to digitize, code and analyze paper-based documents.
- Industry-specific legal expertise was required: As analysis of certain legal clauses was required - and potential redrafting - the client needed lawyers with industry expertise.
- Lean legal team: Every step of the process, right through executing new documents for the client’s customers’ signatures, was a larger project than the in-house legal team could accomplish on its own.
Originally, Epiq was part of a team working on the project with other third-party project management and scanning vendors. Epiq would help them identify and code all legal documentation and store it in an enterprise document management platform. Epiq helped the client design the project workflow coding manuals and timetables to convert an extensive back-file of mostly paper-based documents. Eventually, Epiq assumed the project management role as well. We assembled a core team of 50 dedicated professionals which scaled to as many as 250 over the course of the project, many of which included lawyers and paralegals for detailed contract analysis.
There were 4 main execution stages:
- Stage 1: Data collection: Identifying the location of hard and soft copies of legal documents across all client business units.
- Stage 2: Scanning/processing: Scanning and using optimal character requisition (OCR) on all hard copies to provide a digital image and full text search capability.
- Stage 3: Objective and subjective attribute coding and analysis: Processing the electronic or native files and extracting the full text and metadata. Two different types of coding were completed during this stage – objective attribute coding and subjective attribute coding.
- Objective attribute coding ensures that all necessary fields are coded and facilitates the analysis of the legal documentation. This coding also provides the department-specific attributes necessary for inclusion in the document management system. Typical fields coded at this stage are name, organization, date, business unit, etc.
- Subjective attribute coding was an enterprise analysis completed by attorneys. Epiq built a separate repository for this phase using Relativity.
- Stage 4: Contract review and execution: Reviewing the contracts and license agreements and working with the client’s legal team to review and prioritize the impacted contracts. This stage also included the Epiq team redrafting impacted contracts and liaising with the client’s legal team and other parties involved to get contracts updated and addendums signed.
Epiq provided the client the following benefits:
- Improved access to up-to-date versions and properly attributed contracts with vendors, stored within a central and standard repository
- Centralized project management to lead this complex and critical engagement – releasing client resources to focus on their core business
- Scalable team of Epiq resources to effectively engage business unit leaders to identify and process their contracts and legal documents
- Technical expertise to review documentation using Relativity, an industry leading subjective review tool that effectively exports documentation back to the client’s document management system
- Document review and analysis expertise to support the client’s legal team in reviewing and prioritizing impacted contracts that need to be updated and executed
- Detailed quality control and reporting at the document level enabling real time tracking of progress of the engagement
- Ability to save millions of dollars through identifying and modifying contracts in line with updated tax codes