When it comes to managing your company’s contracts effectively and efficiently throughout their lifecycle, visibility is vital. You need an unrestricted view of the contents of each document, and your entire portfolio, at any given point in time. Since this could encompass reams of often complex agreements, each with different obligations and renewal dates, trying to keep on top of things manually using legacy systems is likely to be a time-consuming and challenging undertaking. By maximising contract lifecycle management (CLM) using specially designed solutions, you can tackle any inherent contract visibility issues to deliver clarity for your team and bring perspective to the wider business.
Be responsive
General counsel and their in-house legal teams need to be ready at all times to field urgent questions from the business on contractual issues that could have a bearing on current or future business operations. For example, if the company needs to increase its prices to protect profit margins in response to high inflation, can you advise on whether this can be accommodated within its contracts – and if so, which ones? Do you know which contracts are coming up for renewal and can therefore be renegotiated to get a better deal? Or, if issues arise at any point, can you easily state how much exposure the business has to indemnification clauses? If not, how long would it take you to find out?
Answering questions like these quickly requires contracts to be held in a well-organised, single, searchable repository. But that’s not enough. It requires an end-to-end CLM solution to be deployed so that contracts can be tracked and monitored seamlessly from execution to renewal, where artificial intelligence (AI) is used to analyse the contract portfolio, highlight relevant documents and clauses, and produce reports where necessary.
Not only is this visibility essential from a compliance perspective, it can also have major implications for business strategy.
In this way, you’ll always be in a position to give the right response without delay, cementing the legal department’s reputation within the business as a facilitator of company requirements, and not an impediment to them.
Be proactive
Moreover, having this kind of intelligent CLM solution in place will allow you to be more proactive in terms of the insight you can give to the business, enabling them to get more value from their contracts, minimising risk, and maximising opportunity.
There are many ways it can do this. On one level, automated solutions can automatically alert the relevant teams to upcoming events such as expiry dates or actions that must be taken to maintain compliance, or track breaches and counterparty obligations to mitigate risk and liability.
At a higher level, smart solutions can carry out more complex data analytics which can identify and evaluate patterns in contract performance or flag up exposure to risk in certain contexts.
AI embedded within CLM tools can even perform predictive analysis or spot hidden anomalies.
In this way, lawyers and colleagues within the business will be empowered to negotiate with confidence, making sure that contracts remain fit-for-purpose, whatever the changing needs of the company. And the C-suite will have the transparency they need to make well-informed decisions in good time about overall operations and strategy.
Create clarity and perspective
In order to be responsive to business needs and act as proactive partners to colleagues across the company, in-house lawyers must require 360° visibility into contracts in real-time, at all times. They need to have transparency around the status of contracting activities, oversight of workflows, and insight into metrics. They need to be able to see the minute detail of a contract or analyse specific aspects of a whole suite of agreements, while also having a broad perspective across the entire portfolio in order to best advise on how any or all of the issues might impact the business.
It’s important to implement a solution that takes over the heavy lifting of all of this by automating processes and leveraging CLM with the power of AI, so that alerts happen automatically, workflows are streamlined, and analysis can be undertaken at the touch of a button and information is displayed in a visually-appealing and meaningful way. That will make sure those insights are actionable.
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For more guidance about how to move from simply handling contracts to seeing the bigger picture by taking a comprehensive contract lifecycle management approach, we’ve produced a white paper that contains some invaluable advice. Read it here.
