CLM is changing the business and operations of legal departments by improving the contracts’ management processes. Starting from the formation of contracts until the signing, renewal, or expiry of contracts, CLM provides a practical solution for handling contacts.
In organizations’ legal departments, where hundreds of contracts are processed every day, CLM leads to optimization and saves time on repetitive work. Through efficient processes and enabling collaboration, CLM shifts the legal specialist’s workload, allowing them to take on more tasks.
In this article, we aim to show you how changes implemented with Contract Lifecycle Management (CLM) tools impact the operations of a legal department and transform it for the better.
Higher Efficiency and Time Optimization
The most obvious benefit of adopting CLM in legal operations is that the amount of time that is spent on managing contracts is greatly minimized. Historically, drafting contracts, reviewing contracts, negotiating contracts, and tracking contracts, have been a tedious process. CLM simplifies many of these actions. This automation accelerates contract approval cycles, allowing the legal teams to spend more time on issues such as risk management and giving advice.
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Improved Compliance and Risk Management
Contract lifecycle management systems help to reduce risks for contracts since they allow for standardization and compliance with the relevant policies and laws. Such platforms have features like renewal notifications or compliance notifiers that ensures an organization does not fall foul of non compliance, missed deadlines or unfavorable contract terms. Moreover, because contract data is housed in the contract lifecycle management tool, legal departments are able to have a view of risk across contracts and develop strategies to manage those risks appropriately.
Streamlined Collaboration Across Departments
Some contracts involve many departments in the organization such as finance, procurement, and sales departments. This eases the flow of working among departments by ensuring that all those involved get to access, review and approve contracts on the CLM. Using features such as real-time updates and notifications, incidences of delayed communication or even misplaced documents leading to bottlenecks are greatly reduced. These processes work in tandem with one another, and lead to quicker contract processing and better integration within the organization.
Data-Driven Decision Making
Contract data held in a CLM system can be a rich source of information for the legal team and indeed the overall organization. Further, CLM platforms are often compatible with other enterprise systems, wherein users get a comprehensive view of how different contracts support or affect organizational goals. This ensures that legal teams bring more value to the table, helping them to make decisions that lead the overall organizational strategic direction.
Cost Cuts and Resource Management
Last but not least, CLM results in direct cost savings due to eradicating inefficiencies and manual tasks that were inherent in managing legal contracts. Teams are able to decrease the number of moments when outside counsel is needed for some common contract tasks and distribute their internal employees and budget properly. Furthermore, CLM can also assist an organization in the avoidance of significant fines or lawsuits which may occur due to the improper management of contracts.
