Contract management software, also known as a contract lifecycle management (CLM) solution, is designed to increase legal teams’ efficiency and agility. It offers an integrated approach to contract management by automating, accelerating, and improving the end-to-end process from creation and negotiation to approval.
The ultimate goal of any robust CLM software is to mitigate the risks associated with contract-related documents and data. It ensures that agreements remain safe and secure while enhancing their velocity and efficiency in compliance with regulatory guidelines.
That said, each contract management system is not created equal. Picking the best contract management software comes down to your firm’s existing needs and expansion plans.
Below are some factors to keep in mind when figuring out how to choose contract management software for your legal practice.
What to Look For in the Best CLM Software
Here are some critical things to remember when choosing contract management software for your business.
1. End-to-End Automation
When choosing a CLM system, keep an eye out for the ones with features designed to minimize human error and speed up contract drafting processes, such as offering reusable text for what would be deemed “high-use” documents (like NDAs).
If you have non-technical users on your team, consider picking a CLM solution with intuitive drag-and-drop tools, which allow users to configure and automate complex parts of the contract management process.
2. Central Cloud-Based Contract Repository
The contract management solution you choose should provide you with a central, cloud-based, searchable contract repository that makes it easy to store, organize, and retrieve your contracts whenever you need them. Virtual repositories remove the uncertainties and speed bumps that plague manual administrative processes.
3. Company-Wide Integration
Choosing a contract management software that supports company-wide integration should increase visibility and reduce time-to-completion at every phase of the contract lifecycle by consolidating various processes across the firm’s key contract-based functions.
4. Contract Analytics
A built-in contract analytics tool will make it easy to identify, assess, and mitigate contract risks across your firm’s critical functions. Pick a solution that can calculate the risk posed during contract negotiations and assign a score based on severity.
5. Business Needs
As you scale your legal practice, the CLM you implement should also be able to keep up with the growth to ensure all your critical business functions stay connected. Depending on your industry, you need to choose a contract management software that can instantly identify and evaluate the risks in your agreements.
Read more on federally regulated sectors here.
6. AI Capabilities
These solutions can quickly identify and mitigate risks in existing contract languages and even prepare agreements during the negotiation phase of the contract management lifecycle. They’re able to identify and structure reusable components in your agreements (such as force majeure clauses) and update them accordingly.
The CLM layout and design should be intuitive and not require you to dig through tons of menus just to find the specific contract or template you’re looking for.
CLM software should let you create contract templates for various business scenarios. It should allow you to define the parameters through which your team members can complete various tasks.
CLM solutions with built-in integration capabilities can minimize errors resulting from duplicating information. Some integration tools include: business spend management (BSM), cloud storage, customer relationship management, data analytics and visualization, and e-signatures.
Think about all the steps involved in contract negotiation up to the point of signing a deal. Contract management software is more than an e-signature tool – it is a time-saving solution designed to boost your bottom line.
11. Online Contracts
12. Growth Partnerships
As your business volume increases, your CLM should provide up-to-date help resources, educate you on emerging trends, provide original research, offer personalized support, and provide thought leadership.
Getting C-Suite Buy-In
As excited as you might be for the potential that contract management software holds for the growth and longevity of your business operations, you still need to get top-level management on board. Here’s how to build the business case for CLM software.
A contract management system will help the company:
- Automate mundane tasks, prioritize strategic work, and leverage its talent to the full
- Minimize the costs associated with contracting
- Make better deals in the future by reviewing past contracts
- Create easy online contracts, therefore, boosting sales
- Minimize errors and ensure contracts remain visible to all the relevant parties
- Boost company-wide collaboration
- Implement processes and amend agreements fast
Purchasing a CLM is a long-term investment. It morphs into the lens through which your peers, clients, and counterparties view your legal practice.
Picking the right system is one of the most important decisions you’ll ever have to make for your firm. The tips outlined in this guide should help point you in the right direction.
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.