The average Fortune 2000 company holds 20000-40000 active contracts (PwC). For legal departments with limited resources and budget constraints, managing a large number of contracts is cumbersome. But even at lower amounts proper management can be tricky. Therefore, it is necessary to optimise processes for contract creation, to avoid problems down the road.
Imagine a colleague from Sales looking to draw a contract. The usual scenario is that he will ‘copy & paste’ the text of another similar contract (which might even be outdated thanks to laws, regulations and policies that have changed) and make minor changes here and there. This contract might be non-compliant, contain errors and miss critical details, increasing risks. After all, the original contract was not intended for the purpose of the new contract.
The colleague will send the draft to you to review and approve. You will review this contract ad-hoc, not knowing which template was used, whether it was the current version or which business idea is being closely tracked. Either you will have to check the draft contract in detail, or have it checked by external specialists, costing you time and money. You will then send this contract back and forth with a lot of changes and finally approve after wasting days almost losing the deal!
With contract automation, you can turn this process around completely by transforming the way you create contracts. Let’s explore 4 ways automation helps you drive efficiency and compliance across the business while elevating your department to a value-delivering function.
1. Regain control of contracts across the business
With automation tools, you can set templates and clauses in a library and ensure that colleagues draft contracts using them, thus requiring minimal review. By using clever decision tree logic your colleaguse without a legal background will be able to create their own legal documents, pre-approved by you. This way, you have full control over the contracts drafted without having to get involved unnecessarily. Thanks to the cloud, you can access these templates securely anywhere and anytime. What’s more, with automation, you can streamline approval workflows and manage access rights. Once a contract is drafted, you can get the relevant personnel to review and approve your contract without having to exchange a chain of emails or printed documents. Intelligent access management provided by automation helps you ensure that contracts, which contain sensitive information, are accessed and approved by the authorised people.
2. Optimise your legal operations by improving the service and time efficiency
Automating routine tasks accelerates contract creation resulting in significant time saving, increased efficiency, and improved service quality. It helps remove bottlenecks and ensures successful business transactions. You can utilise the time you save, for more strategic, value adding tasks and strengthen the position of the legal department as a competent business partner within the company.
3. Empower the business to self-serve
Using templates, colleagues can create contracts without having to wait for Legal. Automation tools encourage dialogue-driven contract creation by providing an interactive platform with questionnaires, checklists, live previews and help text that automatically fill in the empty fields of templates. Automation tools empower colleagues to self-serve while freeing up time for you from administrative tasks. Ask your CFO if they are interested in reducing the time to sign a deal (quote to cash) and you can predict their answer!
4. Create value by improving consistency and quality while mitigating risks
Automation allows you to standardise the language of contracts, so that you ensure they have the right corporate identity, consistency, governance and compliance with your company standards. What’s more, it reduces manual errors by tracking any deviations, resulting in high quality, accurate contracts. This helps you eliminate delays and keep costs low. By minimising inefficiencies in contract creation, you mitigate financial and organisational risks that affects the bottom line and protect your business from incurring losses.
With the right tools, you can automate contract creation and eliminate the hassle of creating contracts. By doing so, you take control of contracts, drive efficiency, improve compliance and protect your business from incurring losses- elevating the role of Legal to deliver value at a higher level.