Whether you are a novice lawyer or an experienced legal counsel, the sheer number of contracts you must manage daily is mind-boggling, to say the least! Your law firm may have trouble keeping up with all the agreements, especially the ones at scale if it does not have a streamlined process for legal contract management. Read on to learn the best practices to reduce bottlenecks and improve efficiency.
1. Assign team roles and responsibilities.
While it may seem simple, a common cause of contract delays is confusion over who is responsible for what. Not having clearly defined roles slows down the team workflow. Disregard it as unimportant, and it will eventually lead to a longer contract lifecycle or even an unexpected loss of revenue.
A good workaround is to use contract management software (CMS) to define each team member’s responsibilities. Contracts, for instance, can have their signatories and approvers set up in the CMS. This can be done manually or with a pre-approved template. When you choose someone to fill these positions, they will be notified immediately. This eliminates the need for email ping-pong to keep all parties to a contract in the loop.
2. Use templates to standardize routine contracts.
There are some upsides to this. Firstly, you will lessen unintentional oversights and errors by eliminating unnecessary complexity and simplifying the process. Secondly, by using a standard template, you are inevitably allowing your commercial teams to self-serve on routine contracts.
A CMS, say, Contractbook in particular, makes this extremely easy. All the legal teams are supposed to do is specify which clauses should be included in contracts and under what circumstances. Even if the sales team needs to make a minor adjustment to an agreement, they will do so with the confidence that the change has been pre-defined by the in-house legal and will be applied automatically.
3. Automate repetitive administrative tasks.
Yes, you heard that right! Any manual, redundant admin task that consumes too much time should be automated.
Data extraction is a good example of this. Manually extracting contract data from a large database is a complex and error-prone process. A CMS that automatically records this information frees your legal staff to focus on more pressing matters.
4. Make negotiation simple.
Streamlining the negotiation process is another best practice in contract management. Most contract negotiations happen over a Microsoft Word document, with comments and revision requests sent over email. It becomes even harder to keep track of revisions when team members constantly switch between different tools to communicate and collaborate.
Again, the problem can be solved with a CMS whose online redlining feature allows users to annotate contracts with comments and suggest edits in real-time.
5. E-sign contracts.
One more way to shorten the contract lifecycle is to prioritize and expedite the signing of contracts. Although many companies have shunned wet-ink in favor of digital signatures, most still struggle to get contracts signed as quickly as they would like. While others try to sign contracts with word processors that were never meant for legal documents, some companies still use scanned signatures.
Using electronic signatures instead is a best practice in contract administration. This could be a standalone e-signing service, such as Adobe Sign or DocuSign. Or it might be a comprehensive contract automation platform with native eSignature features, such as Contractbook.
6. Build a contract repository.
One of the primary responsibilities of the in-house legal counsel is to keep all the contracts and relevant legal documents safe. As bad as it sounds, legal teams in many organizations still file away signed contracts in a filing cabinet or upload them on a shared drive and forget about them. When all the contract data is buried deep inside a cabinet or on an outsourced storage device, making informed strategic decisions or measuring progress against key performance indicators can appear to be a daunting undertaking!
With a contract repository, you can:
- Store contracts safely in one location.
- Limit who can view which contracts.
- Locate valuable information within seconds.
- Convert scanned documents into editable PDFs.
- Increase contract visibility for all parties.
- Derive meaningful insights from contract data using AI.
7. Track key contract dates and deadlines.
Keeping tabs on when contracts expire is another must-do on a legal contract manager’s checklist. As your partnerships grow, the number of contracts you handle every month will increase tremendously. Naturally, you’ll find yourself struggling to stay on top of critical dates, especially if you track them manually. Worst case scenario, you might miss important contract renewal dates, which may result in a breach of contract and severe financial consequences for your company.
Thankfully, this can be easily prevented with the use of a CMS. With its custom alerts, you can set reminders for upcoming renewals, expiration dates, and other contract-related deadlines.
The Bottom Line
Invest in the right contract management software to enhance the quality of your legal contract management operations. It will boost your team’s efficiency, reduce the need for manual revisions, and speed up the contract lifecycle.
Qurat-ul-Ain Ghazali, aka Annie, is the growth manager at Contractbook and looks after all the organic channels. She has been with tech startups and scaleups for a couple of years with a B2B focus. You can find her socializing, traveling, indulging in extreme sports, and enjoying the local desserts when she is not working.