Can CLM Resolve the Legal Challenges in Your Company? Exploring the Post-Implementation Journey of CLM
Specter utters a really mind-altering line – “When you’re backed against the wall, break the goddamn thing down”. Many companies find themselves in this tiny and dark corner – every now and then. The intricacies, twists, turns and legalese of many business contracts put them with their backs against the wall.
As per KPMG’s 2021 Report ‘Global Legal Department Benchmarking Survey,’ the technical complexity of corporate offerings and their digital and global marketing is growing, leading to a rise in complaints, claims, and legal disputes. The average internal expenses of the legal departments surveyed are US$291,420 per lawyer or about US$162 per hour. Turns out that the expenditure (of the legal departments of the companies surveyed) averaged US$2,592,421 per US$1 billion in sales. Of this amount, US$1,263,409 was towards internal costs and US$1,329,012 for external service providers.
It’s hard to focus on your main thing- your business- when you always watch the back of your shoulder or walk over legal eggshells. Often, the reason is a poorly created or managed contract.
A contract is created to bring two parties on the same page. Not to create loopholes for difficulties, non-performance and legal hassles. Unfortunately, most contracts culminate in that dead-end. Companies waste not just their precious time but also precious resources, money, and processes in fighting or navigating a contract’s legal knots.
It’s surprising what happens when the answer is right there – in a robust contract lifecycle management (CLM) solution. With a neat, effective, and business-savvy contract lifecycle management (CLM) solution, a business can pre-empt and solve all legal bottlenecks – without spending too many hours or bucks there. With clm legal operations, an enterprise can easily streamline all areas – from the offer stage to negotiations to drafting, finalization to management, monitoring, and even renewal (let’s catch a breath there!). Yes, all of that! With a single contract lifecycle management (CLM). This is because good CLM software can put a laser-sharp focus on the exact issues that baffle an enterprise. Like,
- Identifying legal pain points in contract management
- Reviewing contract errors, delays, and missed opportunities
- Understanding the impact of non-compliance and legal risks
When an enterprise opts for robust contract lifecycle management (CLM) software, it can use it to streamline contract processes. It can also start enjoying increased efficiency and visibility while being confident that CLM will address all legal challenges effectively- without letting the enterprise be caught in any ‘deer in the headlights’ moment.
Here’s how smart CLM software does it all:
How to go about it?
When you decide to choose this path of contract lifecycle management (CLM) software, it’s better to do it in a well-mapped manner. Do a pre-implementation assessment in the following ways.
- Evaluate the need for CLM based on legal challenges.
- Start assessing the suitability of CLM for the company’s legal requirements.
- Identify specific goals and success criteria for CLM implementation.
- Conduct in-depth legal research to gather relevant information, precedents, and case law for informed contract drafting.
Also, pay attention to the often-ignored aspect of Document Management. Organize and maintain contract files, ensuring accessibility and minimizing the risk of document loss or misplacement. Make sure that your Compliance Monitoring is also intact. The experts and CLM modules should assist in ensuring compliance with legal requirements, industry standards, and internal policies to mitigate risks and penalties.
Once you are on the CLM Implementation Journey
You must pay attention to selecting the right CLM Solution. If you can heed this small checklist, you can be on the right track- in no time.
- Research and evaluate CLM software options
- Match the solution to legal requirements and workflows
- Consider customization, scalability, and integration capabilities
- Configure CLM to address legal challenges
- Define standardized contract templates and clauses
- Establish compliance and risk management protocols
- Streamline approval processes and workflows
- Focus on ‘Contract Review and Analysis
With the help of an exclusive platform-agnostic CLM service provider like Proen, you can thoroughly review contracts, identify issues, provide detailed analysis, and recommend improvements for optimized agreements. It also takes care of:
Post-implementation scenario of CLM
Once you are driving fast on this road, you will start feeling the wind in your hair and a smooth highway in the form of:
- Improved contract visibility and accessibility
- Centralized contract repository and search functionalities
- Easy access to contract data and documents
- Real-time tracking and monitoring of contract status and obligations
- Enhanced compliance and risk management
- Automated compliance checks and alerts
- Proactive identification of contract risks and obligations
- Audit trails and reporting for legal and regulatory requirements
- Time and cost savings
- Reduced contract cycle times and increased efficiency
- Minimized contract errors and disputes
- Optimized resource allocation and contract negotiation processes
But remember to invest in – continuous improvement and optimization. Keep monitoring CLM system performance and user feedback. Keep analyzing data and metrics for process optimization. Put in time for implementing updates and enhancements based on evolving legal needs.
Companies cannot simply wish away the legal challenges of business contracts. It’s better to prepare for the worst by investing in good clm software. When we look at the top priorities for legal professionals in the coming years, as observed in the KPMG report – we can see that information extraction from documents is the highest (55 percent), followed by document automation (54 percent) and data analytics (45 percent).
Enterprises have also found that continuing this path augments their outcomes, especially with a consistent and committed post-implementation journey and continuous improvement in leveraging CLM’s benefits. So get smart with CLM. Think like Harvey. Be prepared. Suit up. For more information on harnessing the true power of CLM, talk to our experts.
The CLM spans all processes associated with the life cycle of each contractual agreement – from initial request through contract discovery, authoring, negotiation, valuation, approval, execution, order tracking/matching, compliance/obligation management and dispute management to auditing and reporting.
Several organizations across sectors use advanced tools to manage their contract life cycle efficiently and save costs and time.
According to Goldman Sachs, such kinds of tools can help accelerate the contract negotiation cycle by 50%, reduce erroneous payments by 75-90%, and cut operating and processing expenses by 10-30%.
Due to these enormous benefits of CLM tools, organizations of all sizes and industries, especially regulated sectors such as pharma, healthcare, and energy, are rapidly adopting CLM tools as a part of their digital transformation strategies. But all these benefits are realized when you select the appropriate CLM tool that matches your business requirements.
Before finalizing any CLM tool for your business, you should,
- Look at your current situation
- Analyze the gaps in your current contracting process
- Your position in legal digital transformation when it comes to contract management
Once you are done with enough introspection about your organization, you should keep the following points on top of your mind while selecting the contract lifecycle management (CLM) tool.
Top 5 features to look for while choosing the best contract lifecycle management (CLM) tool for your organization
- The capability of automation: The ability to automate various business processes should be the first consideration when choosing the best contract lifecycle management (CLM) tool. Automation-powered CLM tools help you ensure compliance, mitigate risk, reduce operational cost, and shorten the negotiation cycle. Automation-powered CLM tools can automate repeated and laborious tasks like setting reminders for deadlines and upcoming tasks. According to Deloitte, intelligent contract lifecycle management (CLM) can help streamline processes and increase efficiency to unlock additional value from contracts. In addition, there is a 60% cost reduction with intelligent CLM implementation versus the traditional model.
Are you wondering what the features that make the CLM tool automation powered are?
Let us reveal the key features in the CLM tool that affect business process automation.
- Automated workflow
- Document assembly using clause and template libraries
- Automated field merging from request and intake forms
- Real-time collaboration
- E-signature and other business application integration
In the market, many CLM tools are available that offer you the same features to make your process fully automated. Then what to choose and how to choose the best one? The key is to look for a tool that doesn’t require any coding, and you can create the workflow using a drag-and-drop workflow builder. In addition, the tool should reduce your operational cost and eliminate any cost of the developer or dedicated IT resources.
2. OCR technology: The second feature which you should not miss while choosing the CLM tool is the integration of OCR technology within the tool. The optical character recognition (OCR) technology-powered CLM tool can automatically compare and track language changes throughout the negotiation. And this even makes the contracts searchable by texts and verifiable against templates and clauses within your library.
3. Electronic signature: If you want to achieve the most effective and proactive CLM, then you can’t ignore the e-signature. A digital signature is the CLM tool’s most essential and expected component. With the integration of digital signatures in the CLM tool, businesses have saved up to 78.6% and decreased the average time it takes a document to get signed from 5 days to 37minuts. For this, you must choose the CLM tool with an inbuilt e-signature feature or support integration of e-signature tools from industry-leading brands like Docusign, Hellosign, Panda doc, etc.
4. Complete CLM capabilities and support: We have seen that the CLM tool should automate your business process, it should have OCR technology, and it should be able to include e-signatures, but all these things will work only if your tool has the capability to include all the features and functionality your organization needs. Is the CLM tool you choose able to support the end-to-end contract lifecycle from request and intake of a contract through its termination?
Your CLM should be able to manage and automate various phases of the contract lifecycle and activities within each phase. There are three phases of the contract lifecycle: pre-execution, execution, and post-execution. The CLM tool you are choosing should work the way you work. It should let you activate each process stage as you want and should integrate into your current processes.
5. Ease of use: Above all the factors necessary for the selection of a good CLM tool, the one which you can’t ignore is the user-friendliness of the tool. Until and unless it’s easy to use, a tool will not be adopted by anyone, no matter how much it’s advantageous. So make sure your CLM tool is intuitive, easy to use, increases compliance and adoption across the business, and is sustainable.
Choosing the right CLM tool is a prerequisite for the immediate and long-term success of your organization’s contract management. Therefore, considering the above-mentioned points while choosing the CLM tool for your company will lead you to select the best fit tool for your company.
For more information on choosing or developing the right CLM tool and successfully transforming contract lifecycle management digitally in your organization, talk to our CLM experts.