Contract lifecycle management (CLM) is the process businesses follow to manage contracts from their creation up to their expiration. It’s a simple definition; unfortunately, many CLMs do not account for everything that’s involved in the life cycle of a contract. Any reasonably sized corporate legal department or firm will have thousands of contracts to manage—all with different dates, provisions, retention schedules, and involved parties.
Many departments attempt to tackle this combination of different tasks and specialties via a single, uniform strategy. For example, some resort to using one software system to manage every stage. But the reality is that once you understand the true scope of contract lifecycle management, leveraging a suite of products designed to work in unison is a far better approach to handling complicated legal tasks.
One thing that’s often overlooked in the contract lifecycle process is how many parties are involved. CLM is treated as the purview of legal operations, but it’s an enterprise-wide need comprising multiple steps.
Description |
Departments involved |
|
Request |
The parties consider an agreement and a contract is requested to record it. |
|
Draft |
The contract draft is created and shared. |
|
Negotiate |
The involved parties evaluate terms, make offers, and target mutually beneficial arrangements. |
|
Review |
The contract is evaluated for accuracy before a final draft is sent to the involved parties. |
|
Approve |
Stakeholders agree to the terms and sign the documents. |
|
Comply |
The contracted parties perform their duties under the contract. The contract is stored and key dates are tracked. |
|
Renew |
The contract expires and is either destroyed after an appropriate retention period, or it is renewed. |
|
Every stage of CLM involves at least two departments, if not more, usually with different needs, responsibilities, expectations, time-frames, and authorizations. That’s why it’s often impractical to address these different needs with the same software. In many cases, a combination of products is a better choice as it can meet the diverse needs of CLM.
Legal technology has come a long way in a very short time. Today, it’s an invaluable tool for addressing staff shortages and increased workloads (among many other things). When choosing legal tech, organizations reported 5 top goals in Bloomberg Law’s 2021 legal tech survey:
When selecting legal technology to address the stages of contract lifecycle management, it’s important to keep these goals in mind. Doing so can help legal teams make the right choices for support at each stage.
Practice management software |
Client management systems |
|
This is a broader software designed to help legal operations teams manage scheduling, time tracking, and associate billables. It may also be used to track contract status very broadly, such as when contracts are about to expire and require action. |
These tools cover the individual workflows involved in the phases of a contract for all parties. Associates may track various conversations and agreements as they work toward finalizing the contract details. |
E-Signature and records management |
Automated Contract review |
|
E-signature is no longer used simply to sign documents. Many platforms can verify all stages (through blockchain-enabled systems) and even help in records management by tracking the individual details of contracts. |
AI-powered, automated contract review technology can fully redline contract drafts in the pre-execution phase. These solutions allow legal departments to control a multitude of time-consuming tasks by offloading much of them to technology. Some of the more robust and advanced solutions can even provide lawyer-quality review in less than 5 minutes, highlight areas of concern, and escalate agreements to appropriate legal staff when necessary. |
These solutions address the key stages of contract lifecycle management while also providing genuine value for businesses across multiple industries. Practice management and case management improve workflows and communication. E-signature and records management programs simplify routine tasks and support a strong user experience. Finally, AI contract review allows lawyers to focus on more value-adding work while obviating time-consuming review tasks.
Proper contract lifecycle management separates successful businesses from those that fail. It doesn’t just address contracts; with the right tools, it can improve the employee experience and drive real value for the entire company.
LexCheck is the automated contract review and negotiation solution that’s redefining how legal teams tackle contract lifecycle management. Contact us at sales@lexcheck.com to learn more, or request a demo to see how it works.