Simplifying Legal Contract Management: A Step-by-Step Guide
Published on 09 Sept 2024
As corporate legal teams embrace digital transformation, contract lifecycle management (CLM) becomes a critical tool to automate time-consuming tasks. Legal departments are facing increasing demands, shrinking budgets, and growing expectations. This step-by-step guide provides a clear roadmap to simplify your legal contract processes, ensuring efficiency and collaboration across teams.
Step 1: Secure Executive Buy-In
Before embarking on contract management improvement, gaining executive approval is crucial. Ask yourself:
- Which executives need to approve the project?
- How does each executive benefit from an improved contracting process?
Involving cross-departmental teams early on helps build bridges rather than create silos. It's essential to avoid assumptions and take the time to answer every relevant question during this stage. This thorough approach will ensure long-term success, fostering strong relationships and continuous buy-in.
Step 2: Assess Your Current Process
Begin by evaluating your current contracting processes and identifying inefficiencies. Key questions to consider:
- What are your biggest pain points?
- Which steps cause the most delays?
- How often are agreements signed manually?
By assessing these aspects, you can uncover gaps in your process and open opportunities for automation and improvement. Transparency is key—ensuring that everyone involved has access to the same information helps generate valuable feedback and ideas.
Step 3: Set Priorities for Improvement
Once you've assessed your process, it's time to prioritize improvements. Ask yourself:
- What primary concerns does your legal team aim to resolve?
- Are you aiming for risk mitigation, improved team management, or something else?
Define what features are essential for your team's success and identify which contracts will be part of the initial phase. By setting clear priorities, you'll focus on making meaningful changes without overwhelming your team.
Step 4: Build a Center of Excellence (COE)
A Center of Excellence (COE) can be a powerful tool for managing your contract management transformation. A COE is a centralized team that ensures the smooth implementation of your CLM system, overseeing governance, resources, and user support.
Some questions to ask while building your COE include:
- What operational processes should be established?
- Do you possess the internal expertise needed to support the Center of Excellence (COE)?
- How will you train users and communicate the system’s value?
A well-structured CODE provides a framework to scale future implementations and ensures long-term success.
Step 5: Create a Central Repository
A central repository for contracts is essential for streamlining workflows and reducing redundancies. Centralized contract storage simplifies contract retrieval, maintains version control, and speeds up the negotiation process. By adding contract analytics, you can make the repository even more effective, allowing easy searchability and data-driven decision-making.
Step 6: Develop a Contracting Playbook
To ensure consistency and standardization, create a contracting playbook that outlines:
- Pre-approved contract terms
- Fallback clauses
- Guidelines for negotiation timelines and approval processes
This playbook will serve as a living document that evolves as your organization refines its contracting procedures.
Step 7: Automate the Intake Process
One of the most challenging aspects of contract management is managing intake requests. Legal teams can enhance efficiency by automating intake processes and ensuring consistency in submitted information. Some considerations for automation include:
- What information is required to assign cases accurately?
- Which contract templates can be distributed automatically?
- How can internal systems integrate with the intake process?
Automation minimizes bottlenecks and allows legal teams to focus on more complex tasks.
Conclusion:
By following these steps, legal teams can streamline contract management, enhance cross-functional collaboration, and demonstrate their strategic value within the organization. Start small, secure executive buy-in, and use a phased approach to simplify your legal processes.
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