One of the key elements of Legal Risk has always been contracts. Most organisations do recognise this area and appoint a Legal counsel to manage them internally. However, managing contracts can be a complex and challenging task, especially for in-house legal counsels. The legal team needs to keep track of various contracts and ensure that they are compliant with legal regulations. Additionally, manual contract management processes can be time-consuming, prone to errors, and can also result in missed deadlines or opportunities. This is where a contract lifecycle management (CLM) tool comes in.
A contract lifecycle management tool is a software solution designed to automate the entire contract management process, from contract creation to expiration or renewal. In-house legal counsels can benefit from using a CLM tool in many ways. Here are six reasons why an in-house legal team needs a CLM tool:
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Increased Efficiency and Productivity
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Better Contract Visibility and Control
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Reduced Risk and Improved Compliance
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Faster Contract Negotiations and Approvals
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Cost Savings and ROI
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Version control and audit log
1. Increased Efficiency and Productivity
A CLM tool can automate many of the repetitive and time-consuming tasks involved in contract management. By streamlining the process, it helps the legal team to work more efficiently and focus on other critical tasks. The CLM tool provides a centralized location to manage all contracts, track deadlines, and maintain an audit trail. It also reduces errors, enabling legal counsel to work more productively.
2. Better Contract Visibility and Control
With a CLM tool, in-house legal counsels can have complete visibility into their organization’s contracts, including their status, terms, and obligations. This enables them to manage contracts more effectively, reduce risk, and ensure compliance with legal regulations. The tool can also provide alerts and notifications for key contract milestones, such as expiration dates or renewal options, giving legal counsel greater control over the contract lifecycle.
3. Reduced Risk and Improved Compliance
Using a CLM tool can help in-house legal counsels to mitigate risks and ensure compliance with legal regulations. The tool enables them to track all contracts and their obligations, ensuring that they are compliant with relevant laws and regulations. It also enables legal counsel to identify and address potential risks in contracts, such as unfavorable terms or missing clauses. By reducing risks and ensuring compliance, a CLM tool can help legal counsel to avoid legal disputes and penalties.
4. Faster Contract Negotiations and Approvals
A CLM tool can streamline the contract negotiation and approval process, enabling legal counsel to work more efficiently. The tool provides a platform for collaboration between legal and other departments, such as procurement or sales, to negotiate and finalize contracts. It can also automate the approval process, routing contracts to the right stakeholders for review and approval. By reducing the time and effort required for contract negotiations and approvals, a CLM tool can help legal counsel to accelerate the contract lifecycle.
5. Cost Savings and ROI
A CLM tool can provide significant cost savings and return on investment (ROI) for in-house legal counsels. The tool eliminates the need for manual processes, reducing the time and effort required for contract management. It also reduces the risk of legal disputes and penalties, which can be costly for the organization. Additionally, the tool provides greater visibility and control over contracts, enabling legal counsel to identify cost-saving opportunities, such as negotiating better terms or reducing contract volumes.
6. Version control and audit log
A contract lifecycle management tool often helps you to manage the several versions of a draft with a detailed audit log. This helps organisations to keep a track of all versions and go back to the changes and the history. This helps organisations manage risk better.
As you can see, it is evident that in-house legal counsels can benefit a lot from using a Contract Lifecycle Management tool in many ways. It can increase efficiency and productivity, provide better contract visibility and control, reduce risk, accelerate contract negotiations and approvals, and provide cost savings and ROI. By adapting to a CLM tool, legal counsel can improve the contract management process, reduce risk, and thereby contribute to the overall success of their organization. In case you want to explore further, Lexplosion Solutions has its own contract management tool, Komtrakt.
Komtrakt is a comprehensive contract management software which helps in mitigating contracts risk by streamlining the portfolio with efficient workflows and smart, real-time reporting. Visit Komtrakt Page to get more details or connect with us to take a demo.
