Contract Lifecycle Management (CLM) software just makes life easier. Legal teams that use CLM get more done with less, collaborate efficiently with other departments, and orchestrate a smooth contracting process for the entire business.
One big misconception is that businesses don’t need a CLM solution until they grow to a certain size. The logic here is that companies that surpass a certain volume of executed contracts per year need CLM software to manage and organize them.
On one hand, the bigger a business grows, the more contract lifecycle management becomes a crucial part of the tech stack. But on the other hand, your legal team shouldn’t wait until you’ve outgrown your manual process to streamline your contracts. The truth is, the earlier you start, the better.
If you’re trying to figure out if it’s a good time to implement a CLM solution, here are five solid signs that the answer is “yes.”
#1: Your Business Is Undergoing a Digital Transformation
Business processes that used to be done manually are being converted into digital experiences. This is happening not only because it makes business processes faster and more efficient but because consumers have come to expect the convenience of digital transactions when doing business.
Across industries, companies have reconfigured their processes to make better use of technology and enable ease for their customers and workforce. One example is the legal industry’s adoption of artificial intelligence (AI) and how it’s been developing more sophisticated processes. AI helps legal teams run e-discovery, categorize legal documents, automate processes, and frees up time.
Contract lifecycle management technology is part of this digital transformation revolution. Contracts are a notoriously tedious part of legal’s workload, often consuming a disproportionate amount of time that could be spent on strategic initiatives. Implementing CLM as part of your digital transformation strategy is a powerful way to streamline an important process and put time back in legal’s day.
#2: You’re Making Your First Legal Hire
The best time to implement CLM would be when you sign your first contract. The next best time would be when you make your first legal hire. Until they grow big enough, most companies use outside counsel before making their first legal hire. And even after they’ve made that crucial first hire, they’ll still need help from external law firms to manage their contracting needs.
Making that first in-house legal hire signifies that you need a CLM, especially if the plan is to keep the legal team lean. A contract lifecycle management solution helps your first hire organize the contract process, automate processes that make contract execution easier and less risky, and take a lot of work off their hands. CLM helps smaller legal teams scale their performance more than any cohort of interns could.
#3: Your Company Is Approaching a High-Growth Stage
At a certain point, it’s no longer feasible to do all your contracts by hand. And instead of waiting until the situation is completely untenable, implement your technology when you realize that you’re in a period of consistent growth. If you wait until you’re doing enterprise-level contract volumes, then you risk disrupting your already fragile processes to get your agreements in order.
As your company starts pushing out more and more contracts per quarter, it’s probably time to start looking into a CLM. Specifically, as your company starts to do more business, the deal values increase, and your contracts become more complex; a CLM will help you weather the growing pains more gracefully.
#4:You’re Going to Undergo a Merger/Acquisition Process
M&A on its own can be incredibly stressful. There’s so much that leaders, executives, and individual departments have to coordinate to ensure that all their proverbial ducks are in a row in order to get funding and successfully complete an M&A transaction.
CLM allows you to organize your contracts well from the very beginning. Without it, your contracts are likely to stay scattered across the business, living in various unideal locations with little to no context around your agreements. And even when you do find them, it’s impossible to know which agreements are relevant to the activity, so legal teams end up spending more time than necessary sorting through contracts.
Finally, AI-powered contract management enables you to perform due diligence checks quickly and relatively painlessly. Without needing to have several tabs open at the same time, you can do all your tracking, monitoring, reviewing, and approving in one place.
#5: You Need to Improve Collaboration Between Sales and Legal
Sales and legal, while they need each other, can butt heads. Both want to get the deal done, but sales prioritizes speed whereas legal prioritizes risk mitigation. If not managed correctly, this can lead tofriction between the teams.
CLM software allows cross-functional collaboration and alignment between teams. Contract lifecycle management streamlines the contract process, automating manual tasks that typically add weeks to the execution time. Even better, it provides visibility into the status of your contracts and notifies stakeholders when necessary.
This way, sales knows exactly what’s up with the agreement, and legal can move faster without incurring additional risk. They both come out on top, and the company wins.
Takeaways
The best time to invest in CLM? As soon as possible. Regardless of your growth stage or contract volume, if your goal is to improve your legal teams day-to-day, drive more efficient processes, reduce the time to execution, and get your teams on the same page, the time to introduce an industry-leading CLM platform is now.
See how CLM can help make your life easier. Request a demo today.
