The benefits of contract lifecycle management for corporate legal departments
A great contract lifecycle management (CLM) system lines up the right people, processes, and technology to manage contracts efficiently while surfacing insights and trends that your business needs to operate strategically.
Done right, CLM systems coordinate, track, and automate the creation, negotiation, execution, and monitoring of all the contracts that a legal department handles. The benefits of all this efficiency and automation are not only time saved but also easier access to the data and content in those contracts, which can enable better business decisions.
With a manual approach to contract lifecycle management, your corporate law department may be stuck reinventing the wheel on routine tasks and scrambling to provide insight to the business to support important strategic decisions.
Consider equipping your people with technology and processes that deliver intelligent CLM — an investment that helps you bring strategic insight to critical business decisions and helps your team be more responsive to business needs. Possibly the most important benefit is that it frees up your lawyers’ time for higher-value work.
Support critical business decisions
Most leaders find themselves needing to justify their budget from time to time. That work is easier when your department is seen as a business driver rather than as a cost center.
Legal departments can use their CLM solution to shift the way they work with the business. For instance, a contract lifecycle management system enables your team to create self-service portals for business users. They then see your team as a business-enabling function within the organization, rather than as the “go-to” people to find documents.
When you truly maximize the CLM system’s benefits, you can equip your corporate lawyers to extract actionable insights from your company’s contracts.
At an even higher level, corporate lawyers can navigate the contract repository to extract actionable insights to move from reactive to proactive lawyering. A well-designed CLM solution can help legal departments at companies of all sizes take a newly empowered role in their organizations. Called a “system of intelligence,” it means using the CLM to analyze clauses and other elements of the contract. This benefit helps you identify your risk areas to help the business take preventative action.
Be more responsive to business needs
Simplification, automation, and digitization are the name of the game in business today. With a manual approach to contract management, the legal team has no holistic visibility into the status of business contracts, which means the business doesn’t either.
When contracts are scattered across shared drives, they aren’t searchable. When they aren’t in a consistent format, it can take days of manual effort to identify all of the company’s responsibilities to vendors, customers, and other outside parties. Could you easily advise on the question “Can we offshore our marketing department?” If you don’t have a streamlined view of all your obligations to third parties or your agreements on data privacy, you’ll have trouble getting a complete answer.
A CLM system offers real-time visibility and automated features that make finding documents across all stages of the lifecycle — from initiation to drafting to negotiation to approval to execution, obligations, compliance, and renewal — quick and easy. This helps the legal team work more collaboratively and responsively with colleagues; it also makes it easier for parties on all sides — the lawyers, the business, and the customer — to have a good experience in negotiations.
Allow lawyers to focus on higher-value work
Lawyers tend to be born problem solvers and risk mitigators. They joined the legal profession to solve complex and interesting tasks; their job satisfaction depends on the ability to focus on high-value legal work rather than repetitive tasks and filing systems.
But manual contract management? That’s basically just repetitive tasks and filing. A modern approach to CLM brings significant efficiencies, freeing legal staff to work on higher-value work they find more interesting. In the long run, this focus on more value-added, interesting work will pay off for the business and the legal department. You’ll have more satisfied employees, which should improve recruitment and retention. With the team delivering higher-value work to the business, it will be easier for the general counsel to defend the legal department budget and headcount.
Modernizing your approach to contract lifecycle management is a beneficial investment that will pay off for years to come. You’ll help your business make better, more strategic, and informed decisions by providing a real-time view of risks and obligations. You’ll enable a shift in how the legal team interacts with the business — and how the business perceives the legal team. You’ll also simplify your approach to drafting and storing contracts, freeing up your lawyers to practice law rather than complete manual tasks — thus improving their job satisfaction.
Learn more about why and how to choose a CLM system in our white paper, “See the bigger picture: Shift from handling contracts to contract lifecycle management.”