Improve Legal Operations and Transparency With Contract Management Software
It’s a myth to label any department as a cost or revenue center. Any function can be a minefield of cost overruns. And any function, even if it’s a cost-hub, can be a goldmine of new value. The trick lies in spotting areas that trap profitability, speed, and efficiency. In these areas, even the tiniest oversight or loss can snowball into a big money-guzzler, especially in departments like the legal aspect of contract management. It may sound like another bureaucratic necessity, but it’s a solid nesting place for both value and losses. When contracts are managed poorly, the legal function can spill a lot of precious time and efficiency into a drain. The use of good contract management software for legal operations, then, becomes not a choice but an imperative.
Hitting gold with contract lifecycle management (CLM)
When contract operations are streamlined, their time aspect is amplified, and their weak areas are proactively managed, the legal team can translate a piece of paper into a rich tap of value and competitiveness. It all boils down to using technology for smart contract lifecycle management with the following:
- Easy management of volumes of contract data
- Accurate and time-sensitive documentation and retrieval
- Automated and intelligent task management in contract lifecycle management (CLM)
- Reduction of manual labor and use of technology for primary, repetitive, and data-heavy areas
- Massive reduction in error rates with CLM-powered visibility
- Huge improvement in project completion milestones
- Strong alignment with compliance
- Good view on mishaps, red flags, and dead-ends that allows for swift corrective action
- A streamlined contract lifecycle management (CLM) with good visibility and action-oriented reporting
Tech adoption in the legal function
An enterprise needs to embrace these advantages mentioned above. There’s a lot of room and possibility for bringing in efficiency, speed, and visibility in the legal facets of contract lifecycle management (CLM). Especially with transparency and information-driven decisions that come only with good technology. However, the adoption curve of technology has been witnessing a mixed picture when we look at the legal department. As per Gartner, eight-seven percent of legal departments in 2020 expected their total number of in-house full-time employees to stay the same or decrease. Even in 2019, the average legal department reported that 33 percent of its corporate transaction work was automated. But Gartner also projected investments in legal project managers (up 56 percent) and data scientists employed within the legal function (up 30 percent). It has been predicted that legal departments will increase their spending on legal technology threefold by 2025. By 2024, legal departments will have automated 50 percent of legal work related to significant corporate transactions. There is room for more: In a Gartner survey, legal departments reported that 55 percent of their work on corporate transactions was automatable. But we also see that by 2025, corporate legal departments will capture only 30 percent of the potential benefit of their contract life cycle management investments.
If we turn to another report- The ABA 2021 Legal Technology Survey Report – highlighted that more firms have adopted document assembly software recently, with 57 percent of respondents reporting having this software at their firm. In addition, document and records management accessibility had also increased at firms, with 65 percent of respondents reporting having access to this software this year.
Legal operations – transformed with contract lifecycle management (CLM)
Legal teams need more automation, tech-driven speed, and transparency than ever before. According to the seventh Legal Department Operations Index by the Thomson Reuters Institute, 65 percent point out that the volume of legal work handled by their team increased in the last year. But the higher workload has not translated into a corresponding increase in the budget for lawyers – with nearly 60 percent of respondents reporting their legal department budget either stayed the same or decreased. Legal departments are also implementing time-saving technology tools to simplify workflow and manual processes (71 percent listed it as a high priority). But this could be made faster and better- especially as 47 percent report that the pace of advancement in technology and process in their department was either slow or non-existent. Worse, over 20 percent feel that the legal department’s existing technology is underutilized in at least 13 different technology categories. Here contract management emerged as one major area among electronic billing and legal research, document management, practical know-how, knowledge management, and legal workflow automation.
Legal teams can discover a lot of hidden value when they are empowered with the right technology for contract management. Because with the right solution, an organization can:
- Can streamline contracts
- Watch what’s going wrong and going right
- Arrest delays and diversions in advance
- Expedite workflows like requests, approvals, and spends
- Do away with fears of lost data or incorrect data
- Strengthen authoring, tracking, documentation, and accountability
- Support compliance, enable collaboration and version-control
- Use transparency for efficiency and speed
- Use rule-based management and exception-handling
- Inject cohesive risk management
- Reduce contract cycle times – with simplicity and seamlessness
- Improve relationships with vendors and partners
Whether you are managing employee contracts, handling deals with vendors, juggling non-disclosure agreements, guarding high-priority deals or sensitive IP data, or simply trying to have a good view of the ongoing projects in various areas of your enterprise- a smart contract lifecycle management (CLM) software can bring in a lot of value. Stop thinking of it as a cost center. It can be your hidden cave of new value.
To learn how you can manage risks, enforce contractual rights, improve compliances, and drive performance with a robust contract lifecycle management (CLM) software, talk to ProEn experts.