Legal departments suffer from what is known as the “more-with-less” syndrome – they are being asked to deliver work at a faster pace while maintaining the same level of control, all while regulatory compliance is becoming more complex
. In many cases, the legal department is growing at a slower pace compared to the number of contracts that are being negotiated.
Contracts are the foundation of many strategic activities in an organization. According to a whitepaper by IBM, the average Fortune 1000 company may have 20,000 to 40,000 active contracts at any given time. Most of these companies are still using the manual “file and forget” approach with little help from technology. This results in an inefficient approval process, increased legal risks, poor contract visibility and lost savings, profit and revenue.
Frustrated with these issues, and a desire to improve services for their clients, a number of companies have digitized the contract management process. This empowers them with the advantage of focusing on strategic activities instead of wasting time searching through the filing cabinet.
Legal departments have trouble meeting
their compliance requirements because they have a limited view of their risks, which translates into limited visibility into their contracts. Contract management solutions provide timely visibility into a company’s contracts and obligations, lessening a company’s audit and compliance costs. Contract management can speed up and simplify the audit and reporting process, so the transfer of information between the legal department and their client is successful the first time and all the time.
On the surface it might not seem like contract management can help improve productivity, but it can improve productivity across the entire company. Contract management solutions allow a company to standardize its review and approval of contracts, without foregoing quality. With contract management solutions, the legal department has total control over who can create, modify and approve contracts, which helps to eliminate the need for legal to review contracts over and over that are developed with standard language.
In recent years, legal departments have begun coupling their contract management system with e-signatures to improve the speed of execution. With contracts buried in an e-mail inbox or filing cabinet employees can waste hours trying to find the status of their agreement. E-signature tools increase control by giving the legal department one archive where they can store their contracts and have insight into the status. In contrast, a paper-based process can prevent business relationships from getting started due to the battle of forms.
The more a company improves their ability to manage and enhance business terms at every stage in the contract lifecycle, the more it can transform contract management into a strategic competence. Functionalities like workflows, alerts, and reporting allow the legal department to view contracts at a more strategic level so they can find more efficient ways to meet their clients’ needs. Having visibility is important if a mass change needs to happen as a result of an reorganization or M&A.
Contract management solutions can allow for stronger processes and negotiation. A contract management solution’s analytics allows legal professionals to measure cycle times and evaluate productivity. All stakeholders during the process have increased visibility and more control over the contract both during negotiation and after execution. This means the legal department doesn’t have to focus on administration task and can focus on strategic priorities.
Managing a business starts with managing contracts. Understanding what’s going on at each stage of the contract lifecycle is crucial to successful contract management. The contract management module from Legisway helps companies track and manage their contracts from expiration through integration. An optional integration with DocuSign provides the possibility to sign contracts securely and efficiently.
One of the most important advantages of contract management with Legisway is that the in-house counsel can stop doing administrative work and focus on strategy. They shouldn’t have to look for a milestone when a solution can warn them ahead of time when a milestone is approaching. In conclusion, a contract management solution enables legal departments to reduce their dependence on paper processes, and make informed strategic decisions that will serve the needs of their clients.