Here’s a fact: You need a contract dashboard. In many businesses, the rate at which you can draft and execute legal agreements directly affects your bottom line. Contract flow determines deal flow determines cash flow.
That's why contract workflow tools, which include contract dashboards that track the status of each of your in-process agreements, are so necessary and popular amongst legal teams today.
Identifying the problem is only half the battle; you also need to correct your contract issues. This blog series will determine the contract life cycle stages, note the most common reasons contracts get "stuck" in each step and show you how to speed up the contract workflow. Let’s dive into the first three.
Stage 1: Draft
In the drafting stage, your legal team creates the first contract version. No one expects it to be perfect, but it needs to be good enough to share with all the parties to the agreement for feedback.
Contracts Get Stuck Here Because…
...the legal team has to draft some or all of a contract from scratch. While most businesses have standard agreements they use as templates for new contracts, too many organizations only have one template for any given use case. But business is too complicated for such a one-size-fits-all approach.
How to Fix It
Develop a library of contract templates and adopt a contract lifecycle management (CLM) solution that can help you draft an agreement from this template library to match several business cases. With the right contract workflow and software, you can have a repository of contract building blocks your team can quickly assemble into the agreement you need.
Stage 2: Redline
Each party edits contracts during the redline phase. This is where legal negotiation gets put to paper. Each party makes proposed changes to the contract language, and revisions continue until all relevant issues are addressed.
Contracts Get Stuck Here Because…
...your legal team has to review every contract "by hand" for problematic language and hidden liabilities. The more contracts you don't generate (or generate from a single one-size-fits-all template), the more work for your legal reviewers, and the more contracts get trapped in "redline hell." Negotiations aside, contracts get stuck in redlines because legal pros don’t have enough hours in the week.
How to Fix It
Automate your contract review process with artificial intelligence (AI) powered CLM. Modern AI is faster, cheaper, and often more accurate than throwing more people at the problem. LinkSquares AI unlocks the critical information locked inside your contracts by intelligently pulling out key names, dates, clauses, and more.
Stage 3: Finalize
This is the stage where everyone's redlines get combined into a final version of an agreement. Each party has a give and take here. Final terms are reached and put to paper.
Contracts Get Stuck Here Because…
...because it isn't clear who on your end has final authority to approve or push back on a redline.
How to Fix It
You need a clear chain of command as to who can approve counterparty redlines that apply to different areas of a contract. Your contract automation process should make it easy to know who can sign off on what aspect of an agreement and surface those assignments quickly and consistently. With Conditional Tasks in LinkSquares, you can configure, customize, and dynamically assign approvers and tasks based on the agreement's content, such as contract value, territory, or other parameters.
Next week, we’ll be back with three more places where contracts get stuck and contract workflow solutions on how to get them un-stuck. Want to learn more? Schedule a demo today.
