Improving your legal department’s contract management

Today’s modern legal departments are focused on finding the balance between their core duty to safeguard their organisation while also working to help maximise the competitive advantage of their business. Contracts are key to securing a competitive advantage and many organisations cite deal delays due to contracting as a problem. The Harvard Business Review has highlighted studies suggesting that inefficient contracting can result in companies losing 5% to 40% of the value of a deal. 

There are several contracting challenges that legal departments face, including:

• Contracts not being securely stored in one central place in a workable format.
• Key information living in a variety of spreadsheets, shared drives, desktops, and email.
• Slow drafting due to lack of adequate templates, playbooks, and clause libraries.
• Greater risk from using previously negotiated agreements with out-of-date terms.
• Slow routing for business approval or signature through email.
• Lack of any contract key performance indicators, such as turnaround time, workload allocation, or volume.
• Limited transparency with business leaders on contract progress.
• Lack of contract tagging and metadata to search for existing contracts and clauses.
• Lawyers wasting time drafting boilerplate documents like non-disclosure agreements that could be easily handled by automated self-service forms.
• Enterprise-wide system not designed for—or flexible enough for—meeting the needs of the legal department.

The new, pandemic-affected world has also had a major impact on legal departments. Not only has it meant budget cuts and increased workloads, but also evolved workloads. Businesses and their in-house legal teams are familiar with an ever-changing disputes environment, especially one shaped by economic shocks. The Thomson Reuters 2021 State of Corporate Law Departments report found that 40% of law departments predicted that spend on disputes would be higher than pre-pandemic levels. The number one mitigation measure, of course, is contract review and renegotiation. Ensuring you have a first-class end-to-end contract management system is perhaps more important than ever.

How to find the best contract management solution

To understand how to improve legal department contracting, legal departments must first look to their existing process.

1. Understand the biggest pain points that also map to the strategic priorities of the law department
2. Interview business stakeholders and understand their needs
3. Process map to understand the current people, processes, and systems in place
4. Plan the next steps—often a technology roadmap can ensure everyone is on the same page internally

When it comes to looking for new contract management solutions, legal departments should focus on products that are easy to use, solve their pain points, and ensure a quick return on investment. Tools should be quick to deploy, require little to no IT involvement, and be end-user friendly. They should also provide workflow automation in a low-code/no-code way, so your legal team can continue to automate documents and processes to increase deal velocity and ensure the ultimate competitive advantage of your organisation.