For generations, businesses have used non-disclosure agreements (NDAs) to protect confidential information that they need to share with employees, outside consultants or potential partners. Over those same generations, the process of creating NDAs has been – let’s be kind and just call it – messy. It often devolves into a circus of dueling versions, lost paperwork, confusion over where the paperwork is and uncertainty over which NDAs are still in force.
Enter blockchain technology with its promise of greater ease and security. So, how does this promise tame the chaotic process of creating and maintaining NDAs?
The problems with traditional NDAs
Creating traditional, paper NDAs is a time-consuming process subject to many errors. Traditional, paper-based templates are prone to accidental or unauthorized changes. This requires careful review of even standardized portions of each NDA.
Getting all stakeholders to review, approve and sign the NDA follows a circuitous path through multiple individuals and/or departments, requiring multiple deliveries of paper documents by courier. This wastes paper, time, fuel and money, and can take weeks or months to complete.
Different versions can develop as multiple attorneys review and revise a single document independently. Moreover, the NDA can pick up human errors that threaten its enforceability, as hasty readers miss blanks that need to be filled, or make signing or dating errors.
Once in force, paper NDAs are hard to maintain. With multiple departments storing them, finding a specific one to confirm it exists can be challenging. Furthermore, tracking expiration dates and changing conditions that may challenge the efficacy of all those paper NDAs is almost impossible. Thus, personnel often end up working under expired NDAs.
All this exposes the company to unnecessary risks, consumes an inordinate amount of the legal staff’s time and proves confusing and frustrating to all involved.
A better solution
Using blockchain for NDAs eliminates paper, time and costs. It creates better quality NDAs that are accessible to all stakeholders and are dynamic, taking changing conditions into account so the agreement continues to protect the company’s interests as long as necessary.
NDAs drafted from standardized forms and pre-approved phrase libraries reduce need for legal review. With strong change protection on standardized wording, intensive review is needed only for wording specific to each NDA. They free legal staff for more productive work.
Blockchain eliminates the need to send paper documents by courier, too. Since it resides on the blockchain, it is easy for any stakeholder to review, approve and sign digitally. New NDAs can be activated in hours rather than days or weeks.
By nature, NDAs on the blockchain are distributed across multiple locations to ensure security and resiliency, and yet, this approach effectively centralizes recordkeeping. Rather than siloing NDAs in multiple departments, any authorized stakeholder can access it at any time from any location.
Blockchain also reduces the risks inherent to paper NDAs like expiration dates passing unnoticed. Blockchain-based NDAs are designed to automatically trigger reviews under specified conditions, so they continue to protect even when conditions change.
NDAs will always be needed, but the convoluted process of traditional NDAs is not–at least, not when blockchain offers a streamlined and safer way to create and maintain them. Blockchain offers a far more effective way of establishing confidentiality agreements. It’s time that businesses make the switch to this time-saving – and cost-saving – tool.