In-house legal teams are at a crossroads. Their contracting processes are manual and time-consuming, but implementing a CLM tool to overcome these challenges presents its own issues. Even for legal teams who are knowledgeable of CLM, it can still be confusing! The complexity of a CLM requires a unique set of steps to ensure successful implementation.
But don’t worry! This guide will cover everything about CLM. From how it works to the individual stages of a contract and the benefits that implementing a CLM can bring.
What is Contract Lifecycle Management?
Contract Lifecycle Management (CLM) is the complete management of the end-to-end contract lifecycle. It handles each stage of the lifecycle from request to expiry to ensure contract compliance and maximise the value of the contract.
Today, contract lifecycle management tools are designed to standardise processes across the business, implementing specific processes and guardrails around individual stages of the contract lifecycle to improve compliance, accelerate cycles and enhance cross-department collaboration between legal and the wider business. CLM software allows legal teams to effectively and efficiently manage their contract portfolio at every stage, with minimal manual effort.
The contract lifecycle management process
Contract lifecycle management (CLM) refers to the process of digitally managing contracts throughout each stage of the contract lifecycle. The stages of the contract lifecycle are the evolutionary and compartmentalised contract processes, from pre-signature to post-signature that work together to complement each other for cohesive contract management.
With contracts touching almost every corner of business, contract lifecycle management tools are designed to automate and accelerate contracts throughout their lifecycle. By implementing structured processes and workflows around each stage, the contracts cycles are faster, more consistent and more efficient.
Every department will carry out its daily duties against some form of agreement. Contracts underpin business relationships. Accounting for the money that enters and leaves the business. They outline deliverables, T&Cs and goals. And how these agreements are managed will determine their success and overall impact on the business.
Why your business needs a CLM process in place
Contacts are the powerhouse of business. But pre- or post-signature contract processes have traditionally been costly to manage,
manual-heavy, complex, lacked a true understanding and almost always introduced unnecessary risk. Ineffective contract management quickly results in contracts becoming blockers rather than enables, leading to a slump in productivity, compliance issues, delays and a breakdown in communication between legal and the rest of the business. Research states that 59% of Business Development professionals said that inefficiencies in the contracting process resulted in lost opportunities (EY, 2021).
Contract lifecycle management software has been designed to mitigate these issues by automating the full lifecycle, digitising and automating each process to allow businesses to improve their efficiency, eliminate delays, mitigate risk and enhance cross-functional collaboration.“The integration with OpenAI for contract summaries is fantastic to help non-legal users understand the information being pulled out of the contracts in a more simplified and human way”.
Rosie Hawkridge, Legal Counsel at Littlefish
Read the full customer story here.
The stages of a contract
How to implement CLM software
Contract Lifecycle Management (CLM) software streamlines the entire contract management process, from creation to execution and renewal. However, all tech differs and has varied implementation requirements; a CLM tool is no different! An unplanned CLM implementation requires careful planning. To help your chances of success, you can follow these best practices.
Make sure you know where inefficiencies and delays occur in your current cycle, then map out the most effective journey before setting milestones.
Get your contracts in order and standardise your templates and positions. Identify contracts that are causing delays. Simply uploading them won’t fix your problems, it will just create more.
Secure stakeholder input
CLM tools are used by the wider business, so securing their buy-in is crucial! Map out your stakeholders and collate with them on what success looks like. The earlier you involve them, the stronger the chance of adoption.
Determine your goals and what you want to achieve from implementing a CLM. What’s the desired outcome and how will it solve your challenges?
How to choose the best CLM software based on these key factors
The CLM market is overflowing with vendors offering their take on CLM. Seeing a vast range of features can make you want them all, and even for legal professionals who have purchased a CLM before, it’s still a daunting task!
To overcome this, we listed the most important features that will help you achieve simpler, smarter contracting for the business.
Every department deals with contracts, so a CLM must embed workflows into your existing tech stack to ensure usability and maximum adoption. Summize embeds contract workflows into Teams, Slack and Word, tools your business already use and know. This approach to CLM prioritises usability, ensuring that everyone can manage in the most efficient way.
A CLM solution should have a central repository with a simplified search experience. This will allow legal and business stakeholders to easily and quickly access contractual information. Summize’s advanced repository creates a single source of truth for your agreements and related files. With intelligent summaries, automated key date reminders and a simple search feature, users can access key contract information in just a few clicks.
Legal Front Door
Is there a simple-to-use interface that allows non-legal users to self-serve on legal matters such as contract generation, review or legal guidance via an existing solution (e.g. Teams or Slack). Summize’s Legal Front Door via Teams or Slack enables rapid contract creation, issue resolution and guidance, improving collaboration between legal and the wider business.
Does the tool utilise AI across the contract lifecycle? AI isn’t intended to replace humans. Harvard discovered that businesses achieve the greatest benefits when utilise AI when both AI and humans work together. Summize utilises AI across each stage of the contract lifecycle for cohesive contract management across the business.