Contract Management 101: Why You Need Legal Technology

Remember that recurring nightmare you have when you’re about to take an exam and haven’t studied for it at all?

That sinking feeling is exactly what you might feel when a senior executive pings you to ask about the terms of a specific contract. How fast can you get your hands on that contract, sift through it, and find the answer? If you’re searching manually, it’ll probably take at least a couple of hours.

But finding what you need in contracts doesn’t have to be a time-consuming, laborious process. Contract management technology can give you the answer in just a few minutes. Here’s how.

What’s involved in contract management?

First, let’s clarify what we’re talking about.

Contract management touches all aspects of an organization. It includes every stage of creating, negotiating, and executing contracts as well as monitoring compliance with the terms of those contracts and renewing them when appropriate. Contract management includes a variety of tasks:

• Drafting contracts that include every necessary term or clause
• Nothing superfluous and use consistent, pre-approved language
• Reviewing and redlining draft contracts
• Analyzing contracts and negotiating their terms
• Executing contracts
• Storing contracts
• Monitoring contract performance
• Adjusting the terms of contracts at renewal
• Terminating contracts for nonperformance

It’s not just the legal team that deals with contracts either. Everyone from HR and finance to IT and procurement — not to mention individual business unit heads — will have their hands on contracts at some point.

What makes manual contract management challenging?

You could probably manage contracts well enough if you only had a few. Heck, you’re smart and competent; you could probably manage a few hundred.

But your organization likely has just a slightly higher volume of contracts: anywhere from a few thousand to a few tens of thousands. Yikes!

And we haven’t even gotten into how long or complex those contracts are. Suffice it to say that business contracts are not light reading. By their very nature, they’re incredibly repetitive. That makes it easy to lose track of what term you saw in this one versus the last one.

Speaking of losing track, before you can review a contract, you need to find it — and with every division of the business entering and managing its contracts, that’s no small feat.

What you need isn’t just more coffee. You need legal technology.

How does legal technology simplify contract management?

First, contract management technology consolidates and organizes contracts into a central repository. No more searching high and low for a document: your contract management platform can find it in seconds. 

Once you’re in the right contract, you can quickly search for any term or detail. No offense, but legal contract management technology can read faster than you. It doesn’t get tired or bored. It doesn’t lose its place or forget where it saw something. With a library of contracts at your fingertips, you can ensure that contracting stays consistent across the organization.

Contract management technology can even use artificial intelligence to recognize key clauses, regardless of their specific wording. That lets you analyze contracts quickly and generate reports that answer any question.

Nor is contract management technology only for existing contracts. It can help you quickly draft new contracts using standardized language from templates and a bespoke library of preapproved clauses. Once you have a draft, it accelerates review and negotiation by prioritizing edits, highlighting redline changes, and clarifying where you are in the process. The same goes for execution, thanks to digital signatures.

The right legal technology makes contract management a dream

Ready to see how easy contract management can be? Sign up for a free demo today to find out how the LinkSquares Cloud revolutionizes contract management.