Clause management can be challenging for contract, procurement, and legal professionals. Excel, email, and disconnected software tools are not effective or efficient ways to generate accurate documents and rarely lead to fast approvals. Clauses support standards and reduce risk, and, when used to their potential, can have a positive impact on your contract management process. Learn how to master contract clauses in this blog.
What are Contract Clauses?
Contract clauses are previously defined and approved text that can be inserted into contracts and other legal documents generated by your team. When managed effectively, clauses save time and reduce errors with document generation and contract authoring by leveraging frequently used standard text in contracts and templates. Common clauses may include indemnification, intellectual property, automatic-renewal, attorney fees and costs, and statute of limitations.
The Impact of Ineffective Clause Management
While contract clauses have the potential to improve the overall contract management process, many organizations fail to manage clauses effectively, inadvertently leading to inaccurate documents, more compliance and risk issues, legal bottlenecks, slow reviews, slow approvals, and delayed execution.
Ineffective clause management via disconnected tools and manual contract management can lead to longer-than-necessary document generation timelines, lack of transparency, lack of collaboration, incorrect permissions, failed compliance, slower review and negotiations, higher risk, and lost deals.
Challenges with clause tracking, editing, version control, and audit trails lead to different clause versions saved in separate files, lack of clause compliance with existing laws and regulations, and bottlenecks when documents need to be reviewed by the legal team before moving to the next step in the process.
Manual contract management may be the source of clause management challenges, but leading research also shows that half of the organizations using contract management software only use it for a repository, missing out on the benefits of an advanced clause library.
What Clause Management Mastery Looks Like
Clauses can be a source of risk, delays, and frustration, or they can be the basis of contract management success. Clause management mastery encompasses standard clauses that reduce risk, required language for contracts, clause approval workflows, clause version control and audit trails, and clause use tracking. Manual contract management processes don’t support clause management mastery, but leading contract management software can help:
1. Generate documents in less time: Enable your team to create accurate, timely, and compliant documents and contracts that merge your approved clauses.
2. Provide clause approval routing: Leverage advanced features to manage fields, document section order, and workflows. Define rules-based clauses for each document template.
3. Control access: System administrators can set user permissions for clause version access and support compliance with full clause approval routing and audit trails. Configure complex rules as needed for standard clause merges and fallback clauses.
Simplified Clause Assembly
CobbleStone Software centralizes contracts, agreements, risk documents, and more. Stop wasting time and money with a manual document drafting process. Here are 6 ways to master clauses with simplified clause assembly that enforces compliance and eliminates challenges around data entry errors, storage, collaboration, distribution, and formatting.
1. Merge and assemble contracts, clauses, terms, conditions, and fields based on your rules.
2. Monitor e-signatures with dashboards, email alerts, and notifications for instant status updates or one-off modifications.
3. Use rules-based terms, provisions, and fallback language that allows for intelligent contract drafting.
4. Compare if clauses or terms were changes from your standard contract terms.
5. Once fully executed, store the contract on the contract record with alerts to the necessary participants.
6. Obtain legal compliance by leveraging workflow approvals, approved bid and contract templates, merging of approved clauses and terms, electronic signatures, and post-execution monitoring and close out.
Easy Clause Management
Clause management is made easy with Contract Insight ™ Software. Your team can easily draft and create contract documents based on your templates and include your contract clauses' terms and conditions with Contract Insight™ Contract Management Software. Leverage features for contract drafting including:
- Merging contract data fields into your organization's contract templates
- Kick-off workflow approvals and routing
- Receiving contract task notifications with calendaring alerts
- Tracking and drafting contract documents with field and clause merging
- Tracking versions of documents for legal discovery
- Enabling legal holds
- Inviting counterparties online to negotiate better
- Routing approvals and quickly signing with electronic signatures
Configure complex rules of when a standard clause merges or a fallback clause is needed. Additionally, utilize the Word plug-in for faster document review and drafting. CobbleStone also offers FAR accelerator packages for State and Federal agencies and contractors.
Are you ready to take control of contract clauses? See how CobbleStone Software can help you generate documents in less time, improve permissions and compliance, and negotiate and sign faster with a free demo.
Build your contract management skills further by reading additional blogs in the Mastering Contract Management Blog Series.