How CLM Software Simplifies Data Privacy Compliance

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GDPR, CCPA, CAATSA — if the alphabet soup of various data privacy regulations isn’t challenging enough, there’s also the difficulty of keeping up with swift regulatory changes, and by extension, their impact on contract management.

While most teams have their own method for tracking emerging laws, keeping an eye on regulatory changes is only half the battle. You also need to ask yourself, “Who does this apply to, and how will it affect our contracts?”

Below we highlight four regulations with the biggest impact on contracts and how CLM software can help:

First, What Data Privacy Regulations Need Our Attention?

  • General Data Protection Regulation (GDPR): While the European Union’s GDPR isn’t new, it’s feared by many because it’s so far-reaching and known to be the toughest privacy and security law in the world. The regulation applies to any business that processes the personal data of EU citizens or residents — even if the business operates outside the EU.
    • What this means for contracts: First, you need to understand which of your clients have GDPR provisions so you can follow proper incident notification procedures in the event of a breach. You may also need to incorporate model clauses and a data processing agreement (DPA) into your contracts — and if so, don’t forget to make sure proper DPAs are in place with your sub-processing vendors.
  • California Consumer Protection Act (CCPA): The CCPA, which follows the lead of the EU’s GDPR, is the United States’ first clearly defined set of data privacy laws. The landmark law was passed in 2018 and “gives consumers more control over the personal information that businesses collect about them,” including how their personal information is collected, used, and shared. Similar to the GDPR, companies have adjusted to the CCPA since it went into full effect in 2020 but are facing another challenge: Copycat laws. Dozens of states have introduced their own version of consumer privacy and data protection laws, and the ones that don’t are rolling them out slowly.
    • What this means for contracts: Make sure you include a privacy addendum in your MSA and confirm that your vendors are complying with CCPA guidelines, too.
  • Setting an American Framework to Ensure Data Access Transparency and Accountability (SAFE DATA Act): In addition to state data privacy laws, general counsel and compliance experts should keep an eye on potential federal regulations like the SAFE DATA Act, which would take precedence over state laws. Much like the GDPR, this law would provide users rights to transparency, access, deletion, correction, and portability and require consent before processing or transferring personal data.
    • What this means for contracts: Third-party vendors and contractors need to have language addressing their obligations for privacy controls, further contracting, and the ability to delete, correct, or provide the information they have collected on individuals. Tracking and reporting on these contractual elements will be as important as they are with GDPR and CCPA.

How Can AI-Based CLM Software Ease Regulatory Compliance?

Pinpoint Contracts at Risk

AI-based CLM software streamlines and stores contracts so that as soon as the law goes into effect, you can quickly pinpoint who this law applies to and issue an addendum to these individuals. And with the ability to mark attributes and train machine learning models to recognize attributes, it’s much easier to stay ahead of your contractual obligations to your clients.

With these intelligent CLM platforms, you can search for specific vendors, agreement types, provisions, clauses, or even specific key terms to know which contracts are at risk.

For example: If a client requires you to gain their consent before hiring a new vendor or outsourcing work, you can mark that attribute in existing contracts and train models to recognize these obligations. Unlike manual methods of contract management, you can locate and review your affected contracts within minutes — and in turn, make it easier to stay on top of emerging laws.

Automatically Generate Addendums and Streamline Signatures

In the old days of contract management, issuing an addendum meant sifting through filing systems, pulling hard files, typing up an addendum, snail mailing copies of the document, and hoping to avoid redlines that would slow the process down further. Now, AI-based CLM software uses contract wizards to automate this weeks-long process.

Instead of manually typing up an addendum, you can generate an addendum by answering a series of questions, and the answers will automatically be entered into the document.

For example: if the SAFE DATA Act is finalized and requires anyone who provides personal information (PI) to take a certain action, you can immediately filter all the clients that provide personal information and, within moments, issue addendums using the contract wizard. Then, third parties can securely e-sign contracts from any device, all within the platform — no other tools required.

Faster, More Organized Reporting

If a compliance investigator comes calling, you need to show them the data privacy policies you have in place — and the contractual language in your agreements pertaining to these policies — then illustrate how it maps back to regulations and compliance requirements.

And you need to be able to do it fast.

Luckily, AI-based CLM platforms make reporting a breeze by organizing contracts in a more accessible way. For example, when you upload agreements, the platform can request information such as:

  • Who is the owner of this information (or, in other words, who’s on point for this)?
  • Does this document contain any PI? Or, for healthcare organizations, does this document contain patient health information (PHI)?
  • Does this document contain trade secrets or confidential information?

You can check all the boxes that apply, then if there’s a data breach, instantly search for these criteria and print a report that tells you who you’re legally obligated to notify — and within what timeframe.

Outdated software and manual contract management methods are unsustainable in today’s regulatory landscape. Schedule a demo to learn how IntelAgree can help you keep pace with regulatory changes and streamline your contract workflows.


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