In today's fast-paced business environment, legal departments face numerous challenges in managing contracts efficiently and effectively.
Manual contract management processes can be time-consuming, error-prone, and hinder collaboration within the organisation."
However, contract management software (CMS) offers a solution to overcome these obstacles and revolutionise how legal teams operate.
The challenges of manual contract management for Legal Departments
Before diving into the benefits of contract management software, it's essential to understand the challenges that legal teams face when relying on manual processes.
1. Too much time spent on contract administration
Manual contract management is a laborious and time-consuming task. Legal professionals spend a significant amount of time searching for contracts, updating them and tracking key dates.
Imagine a legal team working for a large multinational corporation. They have to deal with thousands of contracts spread across various departments and locations. Each time they need to locate a specific contract, they have to manually search through extensive physical or digital archives.
Storage is usually a combination of Excel spreadsheets, emails and paper contracts. This process not only consumes valuable time but also increases the risk of overlooking critical documents.
2. Difficulty managing renewals
Contract tracking is difficult when relying on manual processes. From misplacing critical documents to overlooking important deadlines, human errors can lead to costly mistakes and legal complications.
Consider a scenario where a legal team is responsible for managing contract renewals. Without an automated system, they have to rely on sending or receiving manual reminders and document tracking.
In the absence of a centralised solution, it becomes challenging to keep track of renewal dates, resulting in missed deadlines and potential contract breaches.
It could also result in businesses paying over the odds for services they no longer need, or services that aren't delivering the expected contract outcomes. Either scenario can be costly.
3. A lack of consistency across contracts and processes
Manual contract management often lacks consistency and standardisation. Different team members may have varying formats, making it difficult to ensure uniformity across the organisation and when dealing with third parties.
For instance, multiple lawyers within a legal team may have their own preferred contract templates. This lack of standardisation can lead to inconsistencies in contract terms, clauses, and language. Not only does it create confusion but it also exposes the organisation to unnecessary legal risks.
4. Limited collaboration
Manual processes hinder collaboration within the organisation. Legal teams and other departments struggle to communicate effectively, leading to delays and misunderstandings as teams work in silos.
Imagine a situation where the marketing department needs to review a contract before launching a new advertising campaign.
Without an efficient contract management system in place, the legal team has to manually share the contract with the marketing team, chase them for updates and complete any administrative work needed. This could result in delays and potential miscommunication, especially if there is no version control in place.
This lack of collaboration can have a significant impact on the organisation's ability to have a shared understanding of the contract, meet deadlines and achieve its business objectives.
how Contract Management Software for Legal Departments delivers benefits
Contract management software simplifies and streamlines the entire contract lifecycle, transforming the way legal departments operate.
1. Provides a single source of truth via a contract repository
CMS provides a centralised repository for all contracts and related documents. It provides a single source of truth and enables easy search and retrieval, eliminating the frustrating and time-consuming process of searching through physical files or multiple folders.
Legal teams no longer have to spend time manually uploading the correct version of a contract to the CMS. Solutions such as ContractNow offer AI Extract engine, which automatically extracts clauses and key metadata before storing them in the repository.
With streamlined processes and centralised repository, legal professionals can focus on more strategic and value-added tasks rather than mundane administrative work.
This gives Legal teams the confidence to know they are working with accurate data and the most up-to-date version of the contract record.
2. Simplifies contract tracking with automated notifications
CMS enables automated tracking and monitoring of contract milestones and deadlines. Notifications and alerts help legal teams stay on top of important dates, ensuring compliance and avoiding penalties and legal issues.
Whether a contract is about to expire or is due for renewal, automated notifications allow Legal teams to be far more proactive. It also eliminates the manual burden often required when retrospectively checking calendars and spreadsheets for key dates.
This feature also facilitates the identification of potential risks or inconsistencies, allowing legal teams to take appropriate actions.
Legal teams can take back control of the contract portfolio, prevent revenue leaks and ensure the business only continues to work with third parties that provide value.
3. Enhances collaboration across the entire organisation
Using contract management software doesn't just benefit the Legal team. With features including version control, an auditable history of actions and messaging centres, CMS allows for seamless collaboration between legal teams and other departments.
Whether other stakeholders are in Procurement or Finance, they can log in to the system and see all actions taken against a contract. They can message Legal directly and never lose sight of the chain of communication.
Through secure online portals, team members can easily share and collaborate on contract drafts, revisions, and approvals. This not only improves communication and coordination but also ensures that all parties are working with the most up-to-date versions of the contracts.
Contract management software promotes transparency between all teams, helping them to work together towards maximising contract outcomes.
4. Standardise contract management & keep records secure
Manual contract management leaves businesses exposed to risk, with the buck landing in Legal's lap. It is in the Legal team's best interest to ensure that all processes are standardised, secure and traceable.
Contract management software provides robust security measures, including user authentication, access controls, and encryption, ensuring that sensitive contract information remains confidential and protected.
ContractNow is ISO 9001& ISO 27001 certified and also captures a defensible and auditable history of time & name-stamped actions.
Using technology for contract management minimises risks, gives the business extra protection & gives Legal teams greater peace of mind.
How Legal can get buy-in for contract management software
Implementing contract management software requires support and buy-in from stakeholders within the legal department and the organisation as a whole. Here are some strategies to obtain buy-in:
- Educate decision-makers: Provide comprehensive information about the benefits of contract management software, including potential cost savings, increased efficiency, and enhanced risk management.
- Highlight success stories: Share case studies or testimonials from other legal departments that have successfully implemented CMS. This demonstrates the positive impact and ROI of the software.
- Address concerns: Address any concerns or objections raised by stakeholders, such as data security, training requirements, and integration with existing systems. Show how these concerns can be effectively addressed.
- Arrange demos: Consider arranging demos of each CMS your business is considering. This allows stakeholders to experience the look, feel and capabilities of the software before making a final decision.
- Highlight competitive advantage: Emphasise how implementing contract management software can give the organisation a competitive edge. Show how it improves collaboration, reduces risk, creates cost-savings and enhances client satisfaction.
By effectively communicating the benefits and addressing concerns, Legal departments can secure the necessary buy-in to successfully implement contract management software.
Contract management software for legal departments is a game changer. By overcoming the challenges of manual processes, streamlining workflows, and enabling collaboration, CMS enhances efficiency, reduces risks, and improves client satisfaction.
Contract management software revolutionises the way legal departments handle contracts by:
- Eliminating high levels of contract administration
- Providing a centralised repository
- Enabling collaboration
- Automating tracking and monitoring
- Enhancing security and standardisation
Legal departments that embrace contract management software gain a competitive advantage in today's business landscape. Contact us today to find out more information.