Contracts are a critical element in the operations of legal departments as they allow them to effectively manage relationships while ensuring legal compliance & minimizing possibilities of risk.
Legal operations depend heavily on contracts as they are the foundation of legal relationships between individuals & businesses. Lawyers use contracts to establish legal rights & obligations between parties. They draft & execute contracts on a daily basis & they serve as fundamental tools for effective legal operations.
Effective contract lifecycle management is essential for legal teams to operate efficiently, & technology can improve contract management processes for them. Gartner predicts that 50% of legal tasks related to significant business transactions will be automated by 2024.
As contracts are fundamental to the day-to-day functioning of legal departments, automating them through legal contract management software will become highly beneficial for legal teams.
Traditional Contract Management Systems – A Major Roadblock for Legal Teams
Lawyers & legal advisors relying on standard contract management have to make do with paper-based systems & manual processes for managing contracts. These include manually drafting contracts, tracking critical dates & obligations in spreadsheets or paper calendars, storing contracts in filing cabinets, & manually monitoring contractual compliance.
Traditional methods of managing contracts come with several drawbacks. They are time-consuming & error-prone, often leading to inefficiencies & increased risks, especially for businesses.
Manual contract management can hinder legal teams for several reasons:
- Inefficient Processes: Manual contract management creates bottlenecks in legal operations. It is challenging for legal departments to scale manual documentation processes to keep up with the business’s growth & evolving market requirements.
- Slow-Paced Operations: Legal teams often spend a significant amount of their time drafting contracts from scratch, ensuring contract compliance, tracking key dates, etc. These processes slow legal operations, especially when hundreds of contracts need to be managed.
- Limited Visibility: Legal team members have to work hard to identify contractual risks, growth opportunities & trends. It hampers the ability of legal professionals to offer strategic business insights & on-time advice.
- High Inaccuracy Rate: Errors & inconsistencies are more likely to happen when legal teams manage contracts manually. These mistakes can sometimes lead to costly legal disputes, lost opportunities & often damage the business’s reputation.
- Poor Collaboration: Often, manual contract management restricts collaboration between multiple teams & third parties involved in the contracting process. This leads to communication interruptions which then delay contract execution.
Overcoming Contract Inefficiencies With Legal Contract Management Software
Legal teams can streamline their operations & improve the effectiveness of their contracts by using Contract Lifecycle Management Solutions or CLM for their contract workflows. Adopting legal contract software enables these teams to focus on strategic planning & helps their business gain a competitive edge.
CLM streamlines contract management activities for legal teams & automate them from end to end. Legal contract agreement management becomes simpler & more efficient when teams adopt Legal Contract Management software into their workflows.
Some of the features of contract management software that are beneficial for legal teams are:
- Smart Drafting: Using wizard-based drafting tool, contract clause libraries & ready-to-use templates, legal teams can instantly generate any type of contract in just under a few minutes.
- Digital Negotiations: CLM software allows legal teams & contract stakeholders to collaborate efficiently through online negotiation. They can also enable non-negotiable clause locking, which helps lawyers significantly shorten contract negotiation cycles.
- Digital Document Execution: Electronic signature integration in CLM software simplifies & speeds up contract implementation multifold. Legal teams can get contracts signed electronically by all the stakeholders to expedite their execution.
- Automated Reminders: They help legal teams stay on top of critical contract events, & also reduce the risk of legal disputes & penalties by simplifying compliance. CLM software sends reminders for events like contract renewals, re-negotiations & terminations to ensure that contract deadlines are met.
- Status Tracking: Contract status tracking provides legal teams with a clear & up-to-date overview of the current status of all their contracts. This facility allows them to manage their workload & prioritize their tasks smartly.
- Centralized Storage: A central digital contract repository provided by the CLM tool enables legal teams to manage their contracts more efficiently. It improves visibility & accessibility to the hundreds of contracts they work on.
- Analytics & Milestone Management: Teams can leverage smart contract analytics & risk algorithms to track contract performance & glean insights. Additionally, milestones are set, tracked & managed in real-time to make operations swift & friction-free.
Why Should Legal Teams Adopt CLM Into Their Workflows?
Legal teams & corporate legal departments rely primarily on contracts to establish & manage legal relationships with individuals & business entities. They are responsible for preparing, evaluating & negotiating contracts. CLM helps streamline & simplify these tasks for legal teams.
A smart legal contract management solution is designed to benefit legal teams in several ways. It improves contract process efficiency & reduces the amount of human effort needed for many standardized legal documentation activities.
With CLM software, legal professionals can automate contract management & manage their document-related tasks more efficiently. They can organize high volumes of legal documents in a single, accessible platform that offers improved document visibility & secure storage.
Furthermore, CLM enables legal teams to make data-driven decisions by providing contract performance insights & statistics, helping them focus on high-value tasks & help them in managing their contracts intelligently.
Smart CLM – Automate Legal Contract Management From Draft To Renewal
Legal teams can observe several improvements in their contract-related procedures when they integrate contract lifecycle management software into their process flows. One of the best legal document management software solutions, SignDesk, provides legal professionals with an intelligent & automated contract management tool to help streamline document workflows from start to finish.
SignDesk’s CLM software is developed with AI capabilities that help legal teams manage their contract activities seamlessly. These features enable them to speed up contract generation & execution processes while also helping them boost their document workflow productivity.
With SignDesk’s automated legal document management system, legal departments can also effectively analyze contract performance to devise long-term strategic plans for the business’s growth.
Conclusion
Contract management software is quickly becoming a must-have tool for legal teams looking to streamline processes, increase productivity, & drive better business outcomes. The use of contract management software has the potential to transform the way legal teams manage contracts.
CLM results in increased efficiency, better collaboration, & improved compliance, leading to higher productivity & reduced risks. By embracing CLM technology, legal teams can position themselves for continued success in an increasingly complex & competitive business environment.
About the Author
Krupesh Bhat (Founder of SignDesk)
About the Company
SignDesk is a workflow automation and documentation product aimed at assisting businesses in digitizing and automating their documentation processes.
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