The legal department is the backbone of any company. It plays a vital role in the company’s operating activities by providing legal advice, ensuring regulatory compliance, keeping contracts in order, and tracking legal obligations.
Every day your legal department is swamped in endless contract review and maintenance duties, like manual redlining, compliance checks, and sending dozens of reminder emails. These tedious tasks often overload lawyers, and can bring about multiple human errors and missed obligations and opportunities.
To effectively manage document flow, legal professionals need to reduce their time on low-value repetitive work. Contract management software for legal departments can take that burden off the lawyers’ shoulders and streamline workflows.
This article covers CLM’s most essential features, the benefits it can bring to your in-house legal department, and successful cases of its implementation. Let’s dive in.
What do legal departments want CLM software to do?
Good contract management software for legal departments can facilitate contract workflows across the organization and significantly cut down the amount of time spent drafting, negotiating, and approving legal agreements.
The IDC MarketScape report calls CLM a critical technology that can free up the equivalent of over nine full-time employees from routine contract management activities. Instead, employees can perform more strategic tasks, like counseling the business and handling external matters like litigation, compliance, and mergers and acquisitions.
Legal departments expect CLM software to offer:
- Simultaneous access and collaboration on documents with other parties
- Intuitive user interface, with no need to read extensive manuals to understand how the system works
- Visibility into obligations and performance of the parties
- Automation to reduce repetitive tasks like document drafting and unnecessary expenses
- Contract analytics and reporting to unlock critical data that previously had been siloed
Let’s peek under CLM’s hood to see how an advanced AI-based solution can ensure all of the above.
Main features of CLM solutions
When looking for a CLM solution, you should opt for features that will take as many tasks off your lawyers’ plate as possible.
Easy and secure access
Contract management software should provide secure, centralized storage, two-factor authentication, and role-based access. The ability to reach your documents from any device, be it a smartphone, tablet, or PC, is vital as well. With this, each employee can securely access the files and management processes at any time, based on their roles within your organization and for a particular document. This helps avoid any data mix-ups and duplications during all contract lifecycle stages.
Your CLM solution should allow you to create and manage custom workflows in a way that doesn’t break your company’s internal processes. For example, acquiring a new client involves several workflows. The goal of CLM is to trace all the processes the same way your team would do it, but faster and more efficiently by means of automation. Advanced CLM solutions can follow all the necessary steps of the most complex workflows without human intervention.
Reporting and analytics
Robust CLM software offers configurable graphical dashboards and integrated statistical analysis. These features are convenient for tracking contract management KPIs, like renewal and cancelation rates, for instance, to gauge the success of your contract management process.
And CLM solutions with artificial intelligence (AI) offer even more—for instance, information on potential bottlenecks or risks across contracts.
Self-service document automation workflows are essential when dealing with simple contracts like NDAs, DPAs, sales agreements, and SOC-2 report requests. It lets your lawyers set up templates so other departments or counterparties can manage their contracts themselves, without a legal overview.
Self-service helps minimize your legal department’s time and money spent on routine drafting, review, and negotiation processes.
Robust search options
Considering the amount of data your lawyers deal with daily, your CLM software should offer document scanning and indexing. In addition to basic searches by a document’s name,full-text and metadata searches (e.g., by the creation or last change date, key contract terms, or deliverables) are a huge timesaver.
Instant messaging and comments
These features make communication more efficient because users don’t need to switch to third-party apps and can discuss any issues directly within the platform. Commenting is especially useful during the contract negotiation phase as it allows users to have input without actually editing the file.
Built-in e-signature functionality is essential to gather signatures on documents shared electronically. It eliminates the need to print documents, physically sign and then scan them, or use third-party e-signature platforms that may be insecure.
You may need to integrate your CLM solution with your existing toolset, including CRM and other systems like invoicing, purchasing, order management, and collaboration tools. The integration will save time because you won’t have to enter the same information into several different platforms. This also helps avoid mistakes. Your CLM can automatically pull the required data into your contracts across all systems it’s connected with.
This feature is a must when dealing with multiple contracts simultaneously. Notifications give you instant updates on processes and ensure you’re always on top of the status of any of your documents. Notifications can come through emails, Slack, or an in-platform notification system. They inform all concerned parties about expirations, renewals, and other deadlines.
Now that you know what features to look for in contract management software for legal departments, let’s see how they can help your business thrive.
Benefits of CLM software for your legal department
CLM software can offer your business quite a few tangible benefits. With it, not only legal departments but other teams will feel the difference. Here’s what CLM does for the company:
- Reduces manual effort. CLM software can automate processes and take over routine tasks that eat up the lion’s share of your lawyers’ time.
- Provides documentation and record tracking. CLM software maintains all information you might need for an audit or compliance-related procedures.
- Mitigates risks of missing deadlines. Contract management software can send timely reminders and automatic alerts to stakeholders about deadlines.
- Avoids data leakage. Contract management software for legal departments uses bank-level encryption to secure confidential information.
- Minimizes human error. Because automated document drafting requires minimum human involvement, it drastically reduces the number of typos and other common mistakes.
- Offers real-time collaboration. Simultaneous access to documents shortens the review and redline cycle.
In a nutshell, using CLM software streamlines your company’s processes, boosts your legal department’s productivity, and provides all concerned parties with safe and easy access to contractual documentation.
And your lawyers aren’t the only ones who can benefit from integrating CLM solutions into their workflow. Let’s look inside business processes and see how contract management software can boost collaboration across different departments.
Cross-department collaboration with CLM solutions
Contracts touch every area of a company and may involve multiple departments like procurement, finance, marketing, and sales, in addition to legal and the C-suite.
For example, acquiring a new client involves several departments like marketing, sales, finance, legal, as well as a C-person. Before signing a contract, both the sales team and legal have to collaborate with a client on the terms of the contract, approve all the clauses, and often make quite a few changes to the initial draft. The financial department will also join at some point.
CLM software can follow the company’s workflows step by step requiring action from the responsible employees only, automating routine tasks, and helping to track all the changes in the document. It significantly facilitates cross-functional dialogue and empowers legal and business teams to work as a single unit.
CLM software can follow the company’s workflows step by step requiring action from the responsible employees only, automating routine tasks, and helping to track all the changes in the document.
Features that foster cross-departmental teamwork include the role and permission control, and chatting, commenting, and document versioning. Granular permissions let you control access according to the roles and responsibilities of all parties, depending on the type of document. For example, you can authorize the same person to edit one agreement but only comment on another one.
A big plus is the ability to share documents within and outside the CLM system. Also, a CLM solution can pull information from other documents and reports when integrated with the company’s other software solutions.
A CLM solution like AXDRAFT allows your team to edit, negotiate and approve documents without leaving the platform. It sends automatic notifications to everyone involved about any changes to documents. No more long and exhaustive email chains — several teams can collaborate in one place, which minimizes data leakage and increases efficiency.
How does it work in real life? Let’s look at how using CLM software can enhance legal and business processes.
Employing AXDRAFT contract lifecycle management software has helped many companies improve their document flow and save costs. Here are some of the lucky ones.
For more than two centuries, Carlsberg has been brewing beer under more than 500 local brands worldwide. The company used legacy CLM software that had no document automation. Their procurement and legal departments spent hours manually drafting each document. This meant typos, mistakes, and extended contract lifecycles.
Adopting AXDRAFT’s document automation software helped the company achieve the following results:
- Reduced time on document drafting by an estimated 88% (from 30 minutes down to an average of 3 minutes 48 seconds per document)
- Eliminated repeated mistakes and saved an estimated four person-weeks each year
- Seamlessly integrated claims data with their new AXDRAFT CLM system
AXDRAFT’s document management software made the claims drafting process so smooth and straightforward that the logistics team could completely manage them alone, without legal’s interference. The company increased workflow efficiency, saving time and money.
OLX Group is a global online marketplace operating in more than fourty countries, with twenty local brands. The main reason OLX turned to AXDRAFT was their need to eliminate routine document drafting and free their legal department for tasks that required their direct involvement.
Below are the results of OLX’s collaboration with AXDRAFT:
- Sales team was able to completely take over the document drafting process
- Twelve times faster document drafting, with only 2.5 minutes needed to prepare a draft (down from half an hour)
- Document automation helped save an estimated 550 hours of lawyers’ time per year and freed them to do more complex tasks
AXDRAFT helped OLX integrate its internal client database into the CLM system so that OLX employees could automatically fill in templates with the most up-to-date information.
Contracts are an indispensable part of any business. The way your legal department handles them affects your company’s success. Having too many mundane tasks takes your lawyers’ focus away from discovering new business opportunities and attending to strategic tasks like, for example, intellectual property patents or copyrights, and mergers and acquisition activities.
AXDRAFT’s CLM solution can automate the entire lifecycle of your contracts, from document drafting and negotiation, to analyzing contract performance. Contact us today and request a demo to see how our CLM software can boost your in-house legal team’s performance.
Contract management encompasses processes and procedures, like contract negotiation, execution, performance, adherence, modification, and termination, that companies implement to administrate their contracts with customers, vendors, partners, and employees.
Legal contract management software is a set of tools that effectively automates and manages the entire lifecycle of contracts, from document drafting and negotiation, to analyzing contract performance and tracking contractual obligations.
A good contract management tool brings all contract-related data and workflows under one roof, allowing you to automate every stage of the document lifecycle. In addition, it offers customization based on your specific processes and integration with your internal CRM and collaboration tools.
Basically, CLM eliminates routine tasks that require little lawyer skills by providing clear and up-to-date templates and user-friendly setups. In addition, it offers your in-house legal team automatic notifications and status updates, advanced search capabilities, and more.
When adopting a CLM solution, opt for features that will reduce the load on your legal and other departments by helping them do their work more efficiently. This includes workflow management, self-service options, powerful analytics and reporting, integration with other business systems, and easy access to data. CLM software should also offer secure centralized storage, and features like two-factor authentication and role-based access to guarantee data integrity across your business departments and contracted parties.
The highest level of security available in the CLM solution market includes SOC-2 security certification, data encryption, and cloud-based deployment.