At the heart of every business agreement, there’s a contract. In the process of finalizing this legal documentation, multiple eyes will see it, and multiple hands will modify it. And we’re not just talking about the people within legal departments or the outside counsel that your organization might have hired.
People from numerous teams might handle that contract from requisition through negotiation, approval, and execution. Not only does this delay the contract from reaching a final approval, but it also leaves the door open to miscommunication and errors that could cost your company time and money.
That’s why more than ever, companies need to embrace contract lifecycle management (CLM) solutions. Not only do they keep the contract in a secure, searchable central repository, but they also streamline processes throughout the contract lifecycle and reduce the amount of time that it’s in legal limbo.
However, there are many factors to take into account when choosing a CLM solution, including whether or not it integrates with the enterprise legal management (ELM) tool the corporate legal team might already have in place.
In a recent Wolters Kluwer’s ELM Solutions-sponsored report, Embracing Contract Lifecycle Management for Organizational Growth and Agility, Ryan O'Leary, Esq., Senior Research Analyst, Legal, Risk, and Compliance at IDC Technologies, takes a deep dive into the topic and covers it in great detail.
The rise of legal operations and contract lifecycle management
The legal team’s responsibility for an efficient contract management process can be attributed in part to the recent rise of legal operations. The proven ability to manage additional in-house functions and create operational efficiencies has resulted in legal departments and general counsel gaining trust that extends outside of what are generally thought of as legal functions.
Breaking down silos
Although trends in efficiencies and expanded legal team responsibilities are driving the increased adoption of CLM solutions, departmental silos continue to pose a challenge to successful implementations. While the legal team will begin to represent a more significant power user, the capabilities will need to enable all departments in the workflow to drive faster execution for speed to revenue and increased customer satisfaction.
A CLM tool pays for itself with efficiency gains
A CLM solution streamlines processes and increases collaboration across departments. It is essentially a single source of truth for contracts from start to finish. The application of strong workflow capabilities eliminates the manual handoff processes or back and forth emails between internal staff and third parties. Each department simply logs in to the CLM tool and manages its part of the assembly line to bring the contract to life.
In fact, most businesses experience efficiency gains equivalent to more than nine full-time employees, according to IDC's 2020 Legal Technology Buyer Survey. As the size of the business goes up, so does the size of the gains.
Choosing a CLM solution
As great as CLM tools are, they aren’t a one-size-fits-all mechanism that can be implemented into any organization. You’ll need to do your research and find one that works best with the structure of your organization, as well as with the current ELM solution(s) that your legal department might be using.
When choosing the right solution for your organization, follow these steps:
- Make sure the CLM tool has a searchable central contract repository to ease contract discovery and enable the fast retrieval of key contract data.
- Be certain that it is capable of dynamic contract generation with strong workflow capabilities.
- Find a CLM tool that integrates with Microsoft Outlook as it's still the major communication tool for enterprises.
- Put policy controls in place for contract terms, analytics, and audit logs so everything can be tracked.
By finding a CLM tool that integrates with your ELM solutions, you set your company up for success, not just with current contracts but with future relationships as well. This increases your revenue and eliminates wasted man-hours associated with the process.
Click here to read the entire report and learn about how a CLM solution will support streamlined processes and improved business outcomes.