Growing businesses often struggle to keep up with manual contract review and negotiation demands as they increase capacity. Inevitably, sales cycles slow down, frustrations escalate, risks get overlooked, and overall business growth is hampered by inefficiency.
That’s why forward-thinking corporate legal departments employ contract lifecycle management (CLM) software to streamline agreement processes, address common bottlenecks, and reduce manual effort. CLM platforms also offer a number of integrations with other legal software, such as automated contract review and negotiation solutions, to reduce time-to-execution while boosting overall productivity. Here’s a look at some common CLM issues legal teams contend with, and how automation can help overcome them.
Contract and budget negotiation slowdowns cause the biggest headaches for many organizations, accounting for some 49% of agreement delays and costing 60% of drug trials $11 million, according to a 2019 survey of biotech and pharmaceutical companies by WBR Insights and Icertis. Around 20% of drug trials saw negotiation delays worth more than $55 million.
Outdated, manual contract processes make it difficult to meet timelines, inflate the cost of taking a product to market, and can even strain relationships between parties. What’s more, manual inefficiencies create needless aggravation for employees who on average spend up to 45 minutes simply searching for the document they need and 85 minutes locating a section of terms for reference.
Legal teams are constantly facing pressure to become more agile in order to keep up with increasing business demands. While due diligence is important, reducing the occurrence of excessively long review rounds has become equally crucial for legal department leaders.
Prolonged review rounds can stem from any number of issues, including new staff, inadequate training, substandard organization practices, reliance on manual legal playbooks instead of digital ones, out-of-office employees who are unable to provide necessary approvals, back-and-forth emails between involved parties, and a lack of sufficient tools needed to prioritize work and enforce contract standardization.
Legal teams are tasked with scrutinizing every detail within a contract to ensure compliance goals can be met and the company’s best interests are conveyed. A sales team’s goal of moving contract cycles along as quickly as possible in order to close more deals can clash with that objective.
Conflicting estimates of how much time is needed to thoroughly review contracts inevitably creates friction between legal and sales departments. The tedium of a manual review process can even lead to burnout and slower execution times for legal departments, despite their best efforts to move faster.
Standardized contract terms—often referred to as “boilerplate language”—provide a legal framework for contracting. Boilerplate language spells out the protocol for contract enforcement by specifying mandatory arbitration clauses and defining what exactly constitutes a breach of contract.
In order to be effective, however, boilerplate language must be consistently applied to every contract without fail. Periodic review of boilerplate provisions should also be conducted as needs shift over time. Outdated boilerplate language may no longer accurately reflect how the company conducts business. After all, laws and regulations change, business conditions alter, and companies evolve.
Tech-forward enterprises from every industry are complementing their in-house CLM systems with integrations that further accelerate the process at breakneck speeds. Contract review and negotiation solutions that leverage automation, for example, are particularly effective at helping companies quickly close the gap between contract strategy and execution. LexCheck’s award-winning contract redlining technology is already helping corporate legal departments around the world do exactly that.
Once a contract has been drafted, it can be uploaded into LexCheck’s system and fully redlined in less than five minutes. Leveraging an AI Digital Playbook as a guide, LexCheck reviews agreements for any deviations from a company’s standardized boilerplate language. It’s a highly integrable and scalable solution that works alongside any CLM solution—taking a first pass at redlining the contract, inserting hyper-intelligent suggestions with provided context, obviating human error, and reducing the number of legal escalations.
Looking to take your contract lifecycle management process to the next level with automation? Contact us at sales@lexcheck.com, or request a demo to see LexCheck technology in action.