Contract Lifecycle Management: How Can It Help You?

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Contract Lifecycle Management: How Can It Help You?

Contract Lifecycle Management (CLM) is streamlining and automating contractual procedures. CLM software offers improved enterprise spending visibility, builds greater contract cycle efficiencies, and reduces administrative expenses. 


The Lifecycle of a Contract

Contract Lifecycle Management software includes templates to guide lawyers through creating contracts, from the primary drafting phase to implementation, including redlining, negotiation, authorization, and signing. All drafts and the final document are stored in the firm database. 


Seven Phases of a Legal Contract 

  1. Contract Initiation: Determine all agreements and relevant records to support the contract’s objective.  
  2. Contract Drafting or Authoring: Draft manually or through pre-designed templates using intelligent contract management software that simplifies and expedites contract creation.   
  3. Contract Process or Workflow: Explain and use an organized approach for various contracts. It streamlines cooperation, saves time, and decreases bottlenecks.   
  4. Contract Negotiation and Authorization: If you maintain a transparent procedure and workflow, negotiating provisions and authorizing the contract should be quick and uncomplicated.   
  5. Contract Signature and Implementation: Parties involved in a contract must sign it to make it legally binding. Signing is now mostly done electronically using e-signature tools or contract management software.  
  6. Ongoing Compliance and Contract Management: This procedure comprises fulfilling all deliverables and provisions, auditing and reporting, and revising and amending the contract. In addition, all contracts and contract information are stored in a safe, searchable storehouse.   
  7. Contract Renewal: Automate this action to avoid overlooked renewal possibilities and lost business earnings.  


Four Benefits of Contract Lifecycle Management

CLM is essential for your firm or company to expedite the contract management stages.  Poorly executed contracts can adversely impact your company’s finances and reputation, but an excellent CLM will set you up for success. 

  1. Higher Revenue

    Contract Lifecycle Management software should help companies reach their potential, including supporting them to hit all their financial goals. Given the extensive overview of workflows and approaches and more satisfactory control of finances, successful Contract Lifecycle Management can help lower operating expenses. Also, data transparency, audit trails, and workflow implementation can help you save money and time and boost your contract lifecycle value.

  2. Improved Efficiency

    An efficient Contract Lifecycle Management system will cost your company less money and time. In addition, an excellent CLM system can improve productivity and efficiency. Well-established workflows allow for managerial authority, and you can determine problems within the framework.

    Besides, successful contract management should assist your company in continually enhancing and accelerating your operations and streamlining your overall system. This way, you will see a difference in how fast the initial contract management cycle can be once you have implemented an efficient contract management system into your company. This process acceleration optimizes the value and time of each agreement.

  3. Increased Transparency

    Transparency is necessary for everyone involved when building associations with customers and vendors, as this transparency can help streamline internal and outside communication. Additionally, contract details must be readily accessible and transmitted efficiently and effectively to all applicable individuals and stakeholders. Finally, a framework for reporting and tracking progress and performance is the most reasonable practice for managing expectations and communication.

    It authorizes KPIs (Key Performance Indicators), deadlines, and contract reviews to be monitored by all involved parties to build an excellent working relationship to run your contract management process as seamlessly as possible.

  4. Practical Compliance and Risk Management

    Managing organizational risk is vital to any company. However, this risk management becomes more complicated as businesses build on the growing possibilities afforded by a comprehensive third-party ecosystem. Also, to successfully handle the increase in agreements, the growth in the monitoring of developing third-party associations, and the value they drive to your company, there must be a substantial Contract Lifecycle Management framework to govern and handle the risk presented by an external company.

    Contract Lifecycle Management can deliver improved abilities for controlling and monitoring risk. As companies increase the number of active contracts, relationships change and evolve to manage the risk landscape. One benefit of Contract Lifecycle Management is that your company can quickly determine and act on any agreement, keeping you up-to-date with compliance procedures or regulatory controls.

    Thus it is essential to constantly monitor your contractual obligations for both the success of your company and to decrease the risk of fines and litigation, which can have devastating economic effects. Moreover, regular auditing within a sound CLM system helps guard your business and minimizes risk.


Key Terms 

  • Capacity to Contract: One crucial rule is that a party involved in a contract must have the legal ability or competence (i.e., capacity) to agree.
  • Contract Addendum: A contract addendum modifies the terms of an existing agreement without replacing it.
  • Executed Contract: An executed contract is an agreement signed by all the people involved necessary to make it lawfully valid.
  • Contract Repository: A contract repository is a location where agreements are stored.



Contract Lifecycle Management (CLM) can benefit your business immensely by improving visibility into your company’s contract portfolio and adding value to your operations. If you are interested in making it easy to search through your contracts, LawInsider’s contract repository makes it easy for you to upload your documents and find the hidden contracts among them. From 100 to 100,000 contracts, there are no limits and no hidden fees for the amount of documents that you can organize. With secure access and encryption for all files, you can be sure that your contracts stay safe and private.