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Contract Management: Your Definitive Roadmap to Success

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contract management

What does a growing business bring along with it? More effectiveness, more profitability, more efficiency, and above all more paperwork! This increased paperwork includes all types of documents, especially contracts. As we say, “With great workload comes great responsibility,” and one thing we’ve learned from all successful law firms is that contract management may be a tiring job but it for sure is the most important one.

When a business grows, lawyers are very likely to experience discomfort in the workplace. The workload increases, this means packed deadline calendars, more contracts, loads of documents, etc. The procedure can be complicated and time-consuming, but undoubtedly important enough to cost you a fortune if anything goes wrong.

One thing that lawyers are most relieved about is that digitalization, contract management, approvals, time management, and all other administrative jobs have become a piece of cake that saves a lot of time let alone, helps dodge huge losses.

What Is Contract Automation?

Contract automation is a cloud-based contract management system, that allows attorneys to develop, manage, review, store, update, and keep track of litigation documents online. Basically, it is the use of software to enable legal contract management and handle various administrative tasks without much involvement from lawyers.

This contract management software simplifies an attorney’s job to a level where he can stop focusing on these time-consuming tasks and start focusing on other important tasks that bring in more clients and profitability.

The contract management software performs the whole process, from generating, managing, storing, updating, and tracking contracts, online, i.e. digitally to create a more efficient and smooth workflow.

Traditionally, lawyers used to spend a fortune of their billable hours manually reviewing the contract and drafting a document with only the key information. Every time the firm enters into a contract, attorneys used to start the whole process from scratch again. Digitalization has simplified this whole process by introducing AI-enabled software for contract management that performs this job within a few minutes, without hassle providing better and more accurate outcomes.

Key steps to contract management

  1. Generating
  2. Legal review
  3. Negotiating
  4. Approval and signature
  5. Analyzing contracts and storing
  6. Tracking ( renewal or expiration)
  7. Obligation management

The traditional method of contract management ( manually)

Pre-digitally contract management was all done by lawyers, manually. This means, manually generating the contract with all terms and conditions, manually reviewing it properly each and every detail properly, manually negotiating the terms, etc, the whole process of contract management is undoubtedly very lengthy and definitely a hectic one!

Major challenges faced with manual contract management that led to the adoption of digital contract management are:

  1. Effort replication: As mentioned through traditional contract management, each step is performed manually. Therefore, whenever a new contract is drafted, the whole process is repeated from scratch. As a result, attorneys find themselves replicating the same tasks again and again, which is unavoidable.
  2. Lack of features: Manual contract management tools are unable to offer features that a business or a lawyer demands.
  3. No real-time communication: Since everything is performed manually, the parties end up receiving erroneous documents repeatedly.
  4. Missed dates: It is difficult for a human being to keep track of so many contracts all by themselves. Therefore, sometimes they miss out on renewal or expiration dates.
  5. Lack of transparency: Parties are unable to track or check the contract in between processes leading to a lack of transparency.

modern-way contract management

Your grandfather called. He wants his techniques back! Gone are the days when attorneys spent long hours in contract management. With modernization comes digitalization which brings in easy and simple ways to do jobs that are time-consuming as well as involve huge costs. One of these jobs is contract management.

An AI-enabled software that performs all administrative tasks effectively? Sounds unreal, right? Well, not anymore. The legal industry may be late but they’ve made great use of technology for their own benefit.

Contract management software enables the computer to do all the tasks that are in the contract management process. It pinpoints out important information, helps attorneys with their cases, helps identify case laws applicable, aims to make negotiation easy by reviewing the contract line by line, and provides the best outcome that satisfies everyone. This contract automation enables lawyers to focus on doing what they are best at!

why should you automate the contract?

The volume of workload in law firms is already high and above all, contract management is like salt on your wounds. Undoubtedly, it is a hectic and cumbersome job. It not only builds frustration but also drains out the energy of the attorney who could have been focused on doing something better. With the use of CLM software, there’s a huge change in the performance as well as the workload on shoulders. Let’s have a look at the benefits provided by CLM software:

  1. Faster: Contract automation enables software to perform the contract management process within a few minutes.
  2. Increased transparency: Partners, lawyers, and parties involved can review each and every step. They get real-time updates of every document, thus increasing transparency.
  3. Digital contract: Contract automation has reduced paperwork, i.e. documents are sent and received digitally. This not only saves time but also enables parties to not receive erroneous documents repeatedly.
  4. Centralized control: All the documents are reviewed and edited centrally. This means there isn’t a chance to lose any document in the process and above all CLM software provides security of data.
  5. Reduced workload: Contract management isn’t an easy job. But through CLM software it’s just a piece of cake.
  6. Increased efficiency: From the very first day we started talking about CLM software, one thing we were always sure of was that the accuracy and the efficiency a computer provides cannot match humans.
  7. Contract tracking: CLM software keeps track of each and every contract. It reminds us beforehand about the renewal or expiration dates. Therefore, the organization’s business runs smoothly and on time!
Contract Management Your Definitive Roadmap To Success - Infographic
Contract Management Your Definitive Roadmap To Success – Infographic

how automation is shaping the legal sector?

In this era of technological change and digitalization, the legal sector may not be the first one to grab the spoon but they definitely know how to take a big bite.

This means that although the legal sector is late to adopting technology they definitely have made the best use of it and there is still a long way to go. When we talk about the change that automation has brought in, we certainly need to remember the fact that it is bringing in positive changes but it also is bringing with it a lot of job insecurities among lawyers along with other challenges.

According to World Commerce and Contracting, an average firm spends approximately $7000 to perform contract management manually, which has been reduced to as low as 80% per contract through automation. Not only this, many surveys imply that the employee’s workload is reduced and the firm’s and employees’ efficiency is increased, leading to more profits and accuracy.

Since CLM makes the document error-free and performs contract management within a few minutes, the chances of the firm going through huge cost losses and time losses are also reduced. This brings us to the main motive of every law firm to ever exist: client satisfaction and increased profitability.

Since the contracts are error-free, and lawyers spend most of their time of precious billable hours on client cases, the chances of winning disputes increase, which leads to satisfied clients, hence building a good reputation for the firm.

Tips to perfect automation

Contract management is a crucial job and as far as we are concerned there is no place for even the smallest misguidance or it will lead to mistakes that could cost a fortune. Here are a few tips you need to follow for perfect contract management:

  1. Select the right contracts: When in the initial stage of using CLM software, start with a contract containing low risks. this is the learning stage and there are more chances of mistakes, you definitely cannot afford to make such mistakes on a larger contract. So, make sure you choose low-risk contracts initially. Move on to bigger agreements once you learn how to automate.
  2. Familiarize yourself with your agreement: Before you start the automation, get to learn about your contract. It is good to familiarize yourself with all your agreements, in order to understand what your company is getting itself into.
  3. Choose the right software: After one gets to know about their agreement and the risks associated with each one of them, lawyers are ready to follow the automation process. But before starting, select software that not only meets all your demands but also fits right inside the budget. The features your CLM software offers should be satisfactory enough. Make sure to use the trial version before committing to the software properly.

No matter what position one is in, know how crucial contracts are and know what the firm’s losses will be if anything goes wrong. An attorney always walks with a chip on his shoulder. A small task like contract management shouldn’t increase the load. Therefore it is important to introduce CLM software and make the best use of it.

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