Business transactions are rapidly approaching pre-pandemic levels, which is welcome news. However, corporations operating in EU countries are bound to comply with Schrems II – a significant verdict issued by the court of Justice of the European Union (EU), which governs the transfer personal information of EU citizens to Non-EU countries The court ordered compliance deadline is December 27, 2022, for Schrems II compliance.
– Invalidated EU-US data privacy shield (widely used mechanism for US companies to transfer and store EU personal data in the US);
– Introduced two new SCCs (Standard Contractual Clauses) that replace the privacy shield data transfer scheme. The first standard applies to transferring personal data to foreign countries (non-EU countries), and the later standard pertains to controllers and processors.
Download a five-step guide published by the European Data Protection Board (EDPB) to ensure a safe transfer of personal data to a foreign country (like the US).
The in-house legal team needs to review and remediate all existing contracts containing old SCCs (standard contract clauses). It may not a big challenge when you have a limited number of contracts and adequate staff, however, for large organizations where the number of affected contracts reaches into the thousands (or hundreds of thousands!) it can be a very challenging job. In addition, in-house resources are often limited, which creates further obstacles for effective contract management.
Relying upon technology from Knovos enhances your in-house ability to accomplish contract remediation well before the deadline of Schrems II (December 27, 2022). The Knovos contract management solution/technology can provide an efficient and effective workflow which will enable any organization to accomplish contract remediation.
Let’s look at the proposed workflow of the technology-backed contract remediation process!
1: Host Contracts
1.1. Collect all contracts along with metadata.
1.2. Upload them to Knovos Rooms’ centralized repository
1.3. The system automatically categorizes the contracts based on the metadata, clauses, and type of risks associated with them.
2: Execute Contract Remediation
2.1. Identify contracts that have old SCCs using clause filter or paragraph search feature (ML-powered contract analytics could also be helpful in identification)
2.2. Design an approval workflow and kick-start first-level review
2.3. Reviewers update contracts with new SCCs clauses and other required details as per the Schrems II requirements (Reviewers can leverage the in-browser editor for viewing and editing contracts.)
2.4. System moves updated contract drafts for approval (to a senior member as per the approval workflow)
2.5. If the contract is up to the mark, a senior member can apply eSignature (if required) and change the status to “approved,” and if contracts require some edits, senior members can make edits using the in-app editor or can add comments, highlight some points that require amendments
2.6. The system sends all the contracts back to reviewers for making necessary edits or refinement (suggested by a senior), and the flow repeats until final approval
3: Tracking and Analytics
3.1. The system tracks the progress of remediation work and displays it in a visually appealing manner on the dashboard. Set a personalized dashboard as per your roles and priority
3.2. Reviewer’s productivity report will be generated automatically. It shows the time spent on various contracts
3.3. At any point in time, you can track how many contracts are “non-compliant” for Schrems II.
A paradigm shift in the recent past is evident for the corporate law department as most organizations are adopting new in-house technologies. Corporations are exploring technologies which directly impact their team’s productivity and efficacy more, than ever before. Corporations are actively seeking cost-efficient solutions that can create increased productivity. It is worth noting that Gartner’s 2021 legal stud projected that corporate legal departments will increase their legal technology spending threefold by 2025.
Explore best-in-class contract lifecycle management technology that plays a transformation role in the legal value chain.