First-of-its-Kind Report from Ironclad Explores Trends in Collaboration, Hiring
The report shares trends that can be derived from contract data and can be used as a benchmark, finds collaboration and hiring on the upswing, contract cycle times on the downswing, and more
Ironclad, the leading digital contracting platform, released its inaugural Digital Contracting Data Trends Report. The report used aggregated and anonymized contract data within Ironclad to identify trends in contracting, collaboration, hiring, and more. This first-of-its-kind report highlights trends that can be derived from contract data, and that companies can use for benchmarking against.
“Every business decision requires a contract, and, because of that, contract data can give businesses a holistic view of not only their legal obligations, but also their operations,” said Jason Boehmig, CEO and co-founder of Ironclad. “This allows companies to create a data layer that reveals insights around how teams are operating, how quickly deals are closing, how much spend companies are committed to, and much more.”
The report, which features four chapters, analyzes data across more than one billion contracts within Ironclad. The analysis comprises a unique proprietary mix of process data around the contracting process, and data inside contracts (known as “metadata”), to gain insight into trends across a wide range of areas in business.
The analysis found that across Ironclad’s diverse customer base, spanning industries, locations, and sizes, companies are:
- Moving faster, with more agility, to navigate the pandemic. Contract cycle times steadily decreased after 2019, dropping from a pre-pandemic average by 10 days (60%) in 2022. As companies were pushed to compete on speed and scale, they became more reliant on online digital agreements that can be accepted instantly, also known as clickwrap agreements. Measured against pre-pandemic levels, the report found clickwrap contract volume increased by 274% in 2020, and 443% in 2021.
- Embracing new, digital ways to collaborate internally and externally. Teams are increasingly embracing browser-based collaboration for their contracts, demonstrated by a 262% increase YoY in usage of Ironclad’s browser-based contracts editor, and a 150% quarter-over-quarter increase in browser-based negotiation.
- Turning to contracts as shock absorbers during times of volatility, including the pandemic. Scrutiny of contracts is at an all-time high as companies seek to gain greater control and visibility into their obligations within contracts. With companies seeking to control risks lurking in their contractual obligations in 2020, the number of contract search volume queries rose by 470% compared to pre-pandemic levels, with 2021 levels increasing by 335%.
- When COVID initially began peaking across the United States in April 2020, there were record high levels of companies searching for “force majeure” clauses in their contracts. With Delta and Omicron, the report found a 181% and 32% quarter-over-quarter spike, respectively, for the same search term.
- Severance and termination peaked in 2020, with offer letters hitting an all time high in 2021. In 2020, offer letter contracts saw a 42% increase from the 2019 pre-pandemic baseline levels, while also seeing a 247% increase in severance and termination agreements. In 2021, offer letters increased 177% from 2019 levels, and severance and termination levels grew 97%. These findings demonstrate that signs of the Great Reshuffling can be seen through contract data.
- More hiring of consultants and services than ever before. Ironclad data showed a massive uptick in partnerships and consulting agreements, growing by nearly 80% in 2020, and by 119% in 2021, compared to 2019 levels. In a similar vein, procurement agreements (commonly used for software and other services) grew by 250% in 2020, and 220% in 2021, compared to pre-pandemic levels.
“By providing a platform that can not only extract metadata from existing contracts, but also generate unique insights about the actual contracting process, we’re able to paint a much more holistic picture of the business world through contract data,” said Boehmig. “This report is a true testament to the power of contract data, and serves as a glimpse into the future of business analytics. We’re excited to be part of this journey, and to be helping build that future.”