Getting Started with Legal Contract Management Software and AI – JD Supra

Legal contract management software can drastically streamline contract creation, review, execution and management processes that are often fraught with complications and errors.

Data from the World Commerce & Contracting Association supports this idea. The organization recently surveyed its 70,000+ members about their contract challenges and priorities and found that 85% experience pressure for contract simplification. Another 81% said they have plans to implement contract automation. These points speak to the fact that poorly managed contracts lead to lost revenue, higher costs and more time devoted to manual tasks for all parties involved.

To understand the actual value of legal contract management software, its helpful to recap the inefficiencies associated with contract handling.

Manual processes open the door for errors and slow down overall contract execution. For example, approvals and negotiations done via email are often sluggish or overlooked. Untracked revisions can lead to confusion, conflict or non-compliance and a lack of standard legal language may result in lengthy review times or require lawyers to get involved.

Disparate repositories result in inefficient reporting and reduce contract visibility. Contracts spread out over different repositories, departments and geographical locations make monitoring corporate contracts holistically almost impossible. Without tracking expiring contracts and renewals, companies run the risk of compliance exposure as well as revenue loss.

Changes occur over the lifetime of a contract, including renewal dates, pricing, emerging legal requirements and other events. They require amendments and approvals from the contract parties. If these changes arent managed, implemented and communicated correctly and quickly, organizations can increase compliance risks for themselves and all parties involved.

Legal contract management software can reduce the average hours spent on contracts by 20%, accelerate review and save on costs. It does this by:

CLM centralizes contract storage and automates the request, creation, negotiation, execution and management of any type of contract.

When you combine AI with CLM, you can lower the number of contracts needing to be reviewed. This gives the reviewer the ability to speed up a review and provide consistency across processes. AI also significantly enhances contract management after execution by extracting and obtaining usable data from executed, legacy and third-party paper contracts.

Not all CLM AI is created the same. To get the full benefits of contract lifecycle management solutions, you should carefully evaluate AI for both the pre- and post-signature phases of contract management.

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Getting Started with Legal Contract Management Software and AI - JD Supra