Contract lifecycle management (CLM) is taking the legal industry by storm—projected to grow at a 13.5% compound annual rate from 2022 to 2032. But only fairly recently did it become possible to streamline contracting at every stage of the process, including creation, review, negotiation, approval, execution, and renewal. 

With so much of a legal department’s time spent on mundane due diligence across thousands of contracts every year, CLM software adds high-level oversight to the process. Beyond the obvious benefits of CLM, automation can take legal teams one step further, reducing strenuous workloads, expediting time to close, and reducing company risks in significant ways. 

Overview of CLM

Contract lifecycle management is a cloud-based technology solution that helps legal teams create, review, negotiate, sign, renew, and track contracts digitally. Through one unified space, businesses can store, search, compare, locate, and analyze contracts from a central repository. A centralized dashboard can provide important metrics and high-level visibility into the portfolio so it’s easier to see what documents need to be drafted, which ones require review, and which agreements are approaching renewal or renegotiation.

Benefits of CLM with Integrated Contract Negotiation Support 

Legal teams often implement a comprehensive CLM system to address the following questions:

• Where can I find the finalized versions of current contracts? 
• How can I ensure that all updated, risk-adjusted contract terms are included? 
• Who is responsible for completing required actions during specific contract stages?

For high-level concerns, specialized technology can integrate into CLM systems to augment key stages. For instance, LexCheck can drastically shorten contract review, redlining, and negotiation cycles when used in tandem with CLM providers like LinkSquares. LinkSquares understands where gaps in its technology exist and depend on LexCheck to fill them—providing  users with a true end-to-end CLM workflow that includes automated contract review and negotiation.

Ultimately, the deeper goals and benefits of CLM include:

• Organizing contract workflows from start to finish through one main dashboard
• Reducing the need for time-consuming manual tasks such as contract retrieval and review
• Automating small steps and contract transfers that ordinarily cause bottlenecks 
• Measuring contract compliance and success while increasing company value
• Reducing risk of errors and noncompliance to help the company avoid litigation
• Decreasing administrative expenses while freeing up top-paid labor for strategic tasks

Why a Clearly Defined CLM Process Matters

Companies that lack a defined method for contract management can run into all sorts of issues. They may be unable to locate the most recent version of a contract, making fulfillment unlikely. Or they’re unable to negotiate terms, particularly if those terms expire at renewal time. Precious time is wasted looking for contract data and performing menial review tasks. Human error and inefficiency compound heavy workloads. Ad hoc tools and dated manual processes lead to worker dissatisfaction, burnout, and turnover. Companies that operate without insight have no choice but to reactively put out fires. Ultimately, poor contract lifecycle management leads to missed revenue opportunities and unnecessary risk.    

CLM, while a great start, can only reach its full potential with clearly defined and supported processes. Contract lifecycle management is about more than simply deploying a single software tool. And while CLM vendors claim to provide end-to-end solutions, they often overlook the negotiation piece that LexCheck tackles. That’s why deeper thought must be put into the various processes that occur during a contract’s lifespan and how each one can be improved to increase productivity.

By examining the pain points and needs of teams during each stage of the contract, legal departments can begin to automate manual tasks that exhaust more time and productivity than necessary. For instance:

• During drafting, work can be standardized via templates and clause libraries.
• During review, software can take the first pass at redlining and playbook enforcement.
• During negotiation, artificial intelligence (AI) can automate context-based revisions.
• During execution, e-signature technology can ensure documents get signed.
• During post-execution, analytics show how many tasks remain.

How Contract Automation Can Boost the Benefits of CLM

Companies that lack a defined method for contract management can run into all sorts of issues. They may be unable to locate the most recent version of a contract, making fulfillment unlikely. Or they’re unable to negotiate terms, particularly if those terms expire at renewal time. Precious time is wasted looking for contract data and performing menial review tasks. Human error and inefficiency compound heavy workloads. Ad hoc tools and dated manual processes lead to worker dissatisfaction, burnout, and turnover. Companies that operate without insight have no choice but to reactively put out fires. Ultimately, poor contract lifecycle management leads to missed revenue opportunities and unnecessary risk.    

CLM, while a great start, can only reach its full potential with clearly defined and supported processes. Contract lifecycle management is about more than simply deploying a single software tool. And while CLM vendors claim to provide end-to-end solutions, they often overlook the negotiation piece that LexCheck tackles. That’s why deeper thought must be put into the various processes that occur during a contract’s lifespan and how each one can be improved to increase productivity.

By examining the pain points and needs of teams during each stage of the contract, legal departments can begin to automate manual tasks that exhaust more time and productivity than necessary. For instance:

• During drafting, work can be standardized via templates and clause libraries.
• During review, software can take the first pass at redlining and playbook enforcement.
• During negotiation, artificial intelligence (AI) can automate context-based revisions.
• During execution, e-signature technology can ensure documents get signed.
• During post-execution, analytics show how many tasks remain.

How Contract Automation Can Boost the Benefits of CLM

All too often, the burden of contract management falls upon a small number of employees due to poorly defined roles. Less than 2% of administrative personnel participate in contract management, but virtually everyone is affected by the terms and conditions within these agreements. Breaking down CLM into manageable stages and integrating tools where necessary balances the workload—freeing lawyers to focus on other tasks. 

Over the past few years, the automation of previously manual processes has made a marked impact on CLM for legal teams. According to Aberdeen’s research, contract automation can help businesses:

• Improve compliance by 55% 
• Improve discount management by 25-30% 
• Reduce material/service costs by 2-7% 
• Improve contract renewal rates by 25% 
• Improve overall revenues by 1-2%
• Reduce the cost of contracting by 25-30%
• Eliminate auto-renewal terms
• Cut contract lifecycles in half
• Standardize vital processes and terms while enforcing policies
• Cut reporting cycles from days to minutes
• Analyze and maximize contract performance

Every corporate legal department can save time and money by having a solid CLM process in place. If you’re wondering where to begin, integrate LexCheck’s automation technology into yours to gain the competitive advantage you need.