What a best-in-class contract management solution looks like

The demand for best-in-class contract lifecycle management has never been greater. Facing elevated competitive pressure, an increasingly complex regulatory landscape, and tighter profit margins, businesses need the advanced features these platforms offer to conduct business efficiently while mitigating risk. 

According to a report from Thomson Reuters, “Contract management as it should be,” contract management is often under-appreciated despite the importance businesses place on their contracts. Some organizations have legacy contract management systems (CMS) that are little more than ineffectively labeled filing cabinets — or their digital equivalent. Given the importance of contracts to your business, a contract management solution must empower you to automate creation and approval, identify and manage risk, and monitor obligations and compliance, all in one platform.

Of course, not all contract management systems are built the same with key benefits. Below are 10 of the most essential features corporate attorneys should look for in a best-in-class contract management system.

1. Automated document assembly

Automating the contract generation process with templates and clause libraries improves the legal team’s responsiveness and reduces the time to value. Empowering individual business units with self-service contracts for standard, routine agreements — such as non-disclosure agreements and employment contracts — improves service speed, accuracy and consistency of contract terms, and compliance. The system won’t overlook the need for legal involvement on more complex agreements; you can customize workflows to escalate contracts to the legal team when certain conditions are met.

Artificial intelligence (AI) further enhances automated document assembly by:

• Streamlining processes
• Improving accuracy
• Providing valuable insights and assistance to users throughout the document creation lifecycle 

For example, AI-powered systems can understand and process natural-language text, allowing them to analyze the content of documents, extract critical information, identify relevant sections, and categorize content accurately. The ability to analyze existing documents and identify common patterns, structures, and sections to create customizable templates means legal AI tools save time and effort in the document assembly process.

2. AI-powered contract analysis

Drafting, negotiating, and signing an agreement are just the first rungs on the contract ladder — the agreement then needs to be managed throughout its lifecycle. A contract is packed full of key terms, obligations, and dates that can lead to increased risk for the business and potentially missed value if not managed correctly.

Contract management systems that contain document review and analysis tools that leverage AI can help overcome the challenges of identifying provisions and managing contracts. You can finally move your agreements out of dusty filing cabinets, digitize them, and then set AI tools to work to extract and structure the provisions within — putting prime contractual data at your fingertips to help deliver better business outcomes.

3. Process automation and workflow

The lifecycle of a contract will involve several stakeholders, particularly when it comes to approval and execution. Therefore, you should search out a CMS that includes automated workflow tools to enable you to build approval and signing protocols and escalation procedures directly into the contracting process.

Gone are the days of emailing for approvals and chasing down signatures at the last minute. Automated workflows can eliminate these manual procedures so that all the correct steps and approvals are met — speeding up contract execution, eliminating the risk that contracts are entered into without the proper authority and approval, and facilitating collaboration throughout the entire process.

These agile solutions aren't just for contracts, either. When faced with many challenges around how to manage ongoing processes during the COVID-19 pandemic — from vacation schedules to virtual assessments to diversity workshops — the Thomson Reuters HighQ Collaborate platform delivered new value for the global law firm Bryan Cave Leighton Paisner.

"Speed, efficiency, and user-friendliness of HighQ Collaborate are key benefits for anyone," said Chloe Muir, Head of Emerging Talent at Bryan Cave Leighton Paisner. "There’s not much training required; it’s easy to navigate and really professional."

4. Document management and search

At its heart, a CMS must be a robust repository. Ask an in-house lawyer to identify their biggest contractual pain point, and the answer will generally be the same: finding one when you need it. Your CMS should provide secure storage for all your contracts in one place, with a powerful search capability to help you find what you need when you need it.

Look for a CMS that tracks all document activity, access, downloads, and revisions in an audit trail so you know who has worked on the document and when. With redline generation tools, it’s also possible to see what changes have been made over the contract’s lifecycle. AI-powered document management systems can organize and index documents efficiently, making it easier to retrieve relevant information when needed. These systems can employ techniques such as semantic search and document clustering to enhance search accuracy and speed.

5. Electronic signature integration

Integrating your contract management solution with electronic signature software streamlines both the contract approval and execution processes. Your solution should allow you to configure custom approval workflows to ensure that every contract goes through the proper oversight procedures and obtains the correct consent to become effective.

Electronic signatures eliminate the time lags that can result when parties have to print, sign, and scan hard-copy versions by allowing reviewers to sign anywhere from any device. They also capture all signatures in a single record without the expense and delay of overnighting documents. What's more, you can encrypt electronic documents, so they’re much more secure than paper.

6. Intuitive contract collaboration

Collaboration is essential to timely contract execution. After all, many internal and external stakeholders — in-house counsel, outside counsel, interested business units, and counterparties — will want to share their thoughts and suggestions in comments, annotations, tasks, and redline changes before the document is finalized and ready for signature. But tracking all these changes and updates with multiple versions pinging back and forth across email quickly becomes tricky.

A contract management platform injects efficiency into the contracting process, fostering seamless collaboration through social tools and ensuring that the team is always working on the latest version of a document. "HighQ allows my team to be more mobile, more flexible, more agile, and more collaborative," said Seng Chan, General Counsel, Nisbets PLC.

7. Contract portfolio reporting to track and visualize KPIs

With a CMS, you can move away from static spreadsheets and begin evaluating every aspect of your contract portfolio. You’ll be able to gain complete visibility into contract status, monitor metrics and key performance indicators, and leverage AI and data visualization tools to create actionable insights that you can employ to manage risk and maximize value. You can also compile reports on various indicators, such as how many contracts are awaiting review or signature and how many contracts are active in each business unit.

8. Integrations

To make your contracting workflow as seamless and effortless as possible, you need a hub that connects all your information, work, and technology. The answer to a one-stop shop for contracts is system integration. 

Integrations into customer relationship management (CRM) platforms are critical for businesses for the following reasons:

• Integrating with CRM platforms allows businesses to streamline processes by centralizing customer data, meaning that the CRM aggregates data from emails, social media interactions, website visits, and sales activities within the system.
• With integration, critical functions and features of contract management software appear within the CRM application, allowing businesses to easily search for contracts and check approval statuses while the system automatically addresses manual tasks.
• A CRM system with integrated data provides a comprehensive view of customer interactions and behavior to help businesses identify trends, opportunities, and customer needs more effectively.

Check whether the platforms you’re evaluating offer integrations with essential software, including Microsoft Office, Office 365 applications, and the G Suite. Confirm whether the platforms work well with other systems applicable to the contracting process, such as customer relationship systems, document management platforms, artificial intelligence software, document comparison functionality, and electronic signature applications. 

The most robust platforms also offer custom connections to client-specific platforms through open application programming interfaces, structured query language database connectors, and other tools. Thomson Reuters integrates with powerful platforms like Microsoft Dynamics 365 to handle tax calculation, certificate management, and reporting, and Salesforce CRM to help end users save time by eliminating the need to replicate records in both systems.

9. Data security

Contracts are extremely commercially sensitive and confidential. Therefore, it’s critical that any CMS you procure offers best-in-class data security.

• First, ensure your provider hosts the system in the most secure environment possible. Your checklist for security should include ISO/IEC 27001 certification, at a minimum. It would be even better if the system offered additional protections for specific types of risky data, such as those covered under the General Data Protection Regulation.
• Ensure that your provider offers secure private hosting in the cloud. You’ll sleep better at night if your provider supplies each client with a dedicated application instance. Also, ask whether your provider will store your data in a Tier-3 or higher data center that uses redundant and dual-powered servers, thereby allowing maintenance and cooling to occur without disrupting operations.
• At the application level, the provider should use two-factor authentication to control access and offer the ability to encrypt documents. 
• Finally, ensure that the people enforcing your provider’s security are experienced, screened, and working 24/7/365 to protect your data.

10. Mobile capability

Contract management systems with mobile apps allow users to access, review, edit, and sign contracts and status updates anywhere, anytime, from any device. In an increasingly mobile world, this ability is crucial to successful adoption.

Mobile apps for a CMS offer increased accessibility; real-time updates and notifications about contract status changes; collaboration capabilities that allow team members to review, comment on, and collaborate on contracts directly from their mobile devices; and enable greater workplace efficiency that allows users to access and work on contracts remotely. Through its integration with the Salesforce mobile app, Thomson Reuters enables field sales and account management professionals to collaborate in real time to fully leverage Salesforce and stay in touch with clients 24/7, wherever they are.

While some versions may offer limited functionality or customization options in desktop versions or might not be compatible with all types of mobile devices or operating systems, mobile apps remain essential tools for professionals involved in contract management processes. 

A comprehensive solution

Contract management should be more than mere compartmentalization and storage. Rather, effective contract management is a comprehensive process that requires orchestrating dozens of moving parts to work together in concert. Each phase of contract management involves multiple steps and multiple parties. To encourage each part to move in harmony, you need an end-to-end hub — and an intelligent, collaborative one at that.

When all phases and stakeholders come together in a centralized contract management ecosystem, you have unprecedented control and visibility into all contracting activities, workflows, approvals, documents, and metrics — speeding up transactions and delivering greater value to the business while improving accuracy and reducing risk.