Legal departments trudging through manual processes for contract generation and management can be left to feel the walls closing in. With every new business opportunity comes a cascade of contracts - each demanding precision, timeliness, and impeccable oversight. But even the best can miss a beat. From accidentally overlooking a critical termination deadline to the tedious hours spent reinventing the contract wheel, the pitfalls of manual contract management become glaringly evident. And when an outdated contract version almost derails a business deal? That is the breaking point.
If this sounds familiar, you're not alone. Many businesses find themselves ensnared in these contractual conundrums. But what if there is a smarter way out? Enter the world of contract terms automation: a beacon of hope for those drowning in paperwork. In today's post, we'll delve into the pain points faced by many who are drowning in the contract management process and showcase how contract automation might just be the lifeline your business needs.
Scenario: Sandra, the Corporate Counsel at a Growing Tech Startup
Sandra is the primary corporate counsel at a rapidly growing tech startup, "FastTech Flow." As the company expands, the number of contracts Sandra has to review, draft, and manage has surged dramatically. These contracts range from vendor agreements to customer contracts and partnership deals.
One day, Sandra realizes that a key contract with a major vendor was renewed automatically without her oversight because she missed the termination deadline. This oversight was due to the sheer volume of contracts she was juggling and not having an efficient system to track crucial dates.
Furthermore, Sandra finds that every time she drafts a new contract, she has to start from scratch or try to find a similar previous contract to use as a reference. This not only consumes a lot of her time but also introduces room for inconsistency and error. On more than one occasion, she has found herself in lengthy email chains negotiating standard terms that could have been templated.
To make matters worse, a junior member of her team recently sent out a contract using an outdated version, which caused confusion and nearly resulted in a lost business opportunity.
Sandra is frustrated, overwhelmed, and realizes that manually managing these contracts isn't scalable or efficient. She's in dire need of a solution that can automate standard terms, track critical dates, ensure consistency across contracts, and reduce the risk of human error.
In this scenario, contract terms automation would be a lifesaver for Sandra. It would provide her with templates, reminders for important dates, and ensure that everyone in her team is working off the most recent version of contracts. Moreover, it would free up her time to focus on more strategic legal matters, rather than getting bogged down in administrative tasks.
A Deeper Look at Legal Contract Automation
Contract terms automation refers to the use of technology to streamline the creation, negotiation, management, and execution of contract terms. Instead of manually drafting, reviewing, and modifying terms in a contract, contract management software tools and platforms can automate these processes - virtually ensuring accuracy, consistency, and efficiency.
Benefits of Contract Automation
Key features and benefits of automated contracting systems include:
1. Template Creation: For easier and automated contract drafting, standardized contract templates can be created for frequently used contracts - essentially ensuring consistency across commonly-used or type-specific agreements. These pre-approved templates can be seamlessly merged with contract data fields for streamlined contract drafting.
2. Dynamic Clauses: Proper contract clause management can further automate contract creation. Organizations can retain a standard clause library and use contract artificial intelligence to quickly replace clause types with their preferred versions as redlines.
3. Automated Contract Review: To help reduce review process confusion, leading CLM software offers clause ownership, which allows organizations to assign a “clause owner" - who can receive notifications of clause changes. Additionally, any changes made during contract collaboration can be tracked via redlines or track changes in an automated fashion.
4. Version Control: Contract automation software supports numbered version tracking in order of the most up-to-date version. This feature virtually ensures that all parties are working on the latest version of a contract, avoiding potential conflicts or misunderstandings.
5. Data Extraction: Contract management system AI and machine learning can be used to extract key terms, contacts, organizations, dates, and more from contracts for easier monitoring and management. From there, organizations can automate workflows and approval processes based on key information about a contract.
6. Integration: Many contract management automation platforms can integrate with other business software - helping ensure that terms in contracts align with other business processes and data sources. These often include CRMs, ERPs, word processing tools, and many others.
7. E-Signature Integration: Electronic signature software integration allows for the seamless signing of contracts digitally, speeding up the execution process. Organizations can sign, send, and manage documents centrally and electronically - eliminating the need for ink signatures, costly postage, and disorganized back-and-forth email signing. Digital signature attestation ensures the validity and enforceability of signed documents.
By automating these aspects of contract management, companies can save time, reduce human errors, and improve contract compliance and management. With contract management software, contract terms automation can be centralized, scaled, and constantly improved for maximized ROI.
Don't be like our friend Sandra; book a free demo of contract terms automation software today!
*Legal Disclaimer: This article is not legal advice. The content of this article is for general informational and educational purposes only. The information on this website may not present the most up-to-date legal information. Readers should contact their attorneys for legal advice regarding any particular legal matter.