Although negotiation is a critical stage in the contract lifecycle, contract negotiation hasn’t changed much since the emergence of email. But new technologies such as contract negotiation software are making contract negotiation faster, smarter, less risky, and are helping legal teams (and the businesses they serve) negotiate complex agreements at scale.
Contract negotiation is the process of two or more parties discussing, i.e. negotiating, elements of a contract with the aim to reach a legally binding agreement regarding the terms and conditions of their relationship.
Contract negotiation software is a category of software that has a set of features that make it quicker and easier to negotiate contracts with counterparties and is a type of legal technology. It aims to reduce friction and administrative work throughout the contract negotiation process. It is a tool that is typically geared toward streamlining and organising the negotiations process by automating the routine side of contract management and minimising human input.
Contract negotiation software can exist on a scale, from software that serves just the negotiation stage of the contract lifecycle to software that focuses on the overall efficiency of managing contracts at every stage, constituting digitised contract management systems. The latter is typically referred to as contract management software, and this kind of software follows the entire contract lifecycle, from creation to the approval workflow to contract execution. Contract management software can also include legal document management as well as contract automation tools.
Contract management software often includes other benefits, such as helping companies reduce costs and get more work done. Contract management software can benefit contract negotiations by removing the need for contract negotiations to involve multiple meetings, teleconferences, and hundreds of emails. It creates a single source of truth for the contract during negotiation, eliminating the confusion often found when multiple drafts of a contract are created during negotiations.
Contract management software also allows for ease of collaboration, with an audit trail, and tracked changes for redlining. It gives greater visibility into the contracts as well as the overall negotiation process, with not only a centralised repository but the capability to provide data on the performance of negotiations. Contract management software replaces the need for other tools such as email, word or google docs. All of these capacities facilitate efficiency and acceleration of the entire negotiation process.
For example, Plexus' contract management software allows one to negotiate, approve, sign, store & search all contracts seamlessly. Plexus enables Legal functions to drive productivity by executing agreements faster with digital signature over wet signature and setting automatic reminders as they store their documents to ensure they never miss a deadline to negotiate a contract renewal before an expiry date. This kind of software is popular as it solves problems not just for the legal department but for the whole organisation by reducing the time to contract execution, whilst also providing access to data and reducing Legal’s workload.
When it comes to selecting contract management software, it is first important to establish what exactly you want, and what issues you are trying to solve with the software. For example, you may want to begin by creating a list of desired capabilities and then prioritise based on the needs of your organisation and potential ROI. It can be hard to envisage all of the critical requirements prior to buying a contract management software, particularly if you haven’t bought one before. As such one of the common mistakes when buying contract management software is that many executives miss materially important requirements. To avoid this you can use our RFP template to ensure you’re not missing important requirements.
For a full guide to evaluating Legal technology, you can check out our Legal Technology Shopping List. If you think legal automation software might be the solution you can read about a few common challenges and solutions in our article “How to select the best legal automation software for your business”.
When selecting a vendor you may want to consider if they are continuing to innovate so they will meet your needs well into the future. You can try our legal tech vendor comparison template to ensure the vendor's strategy aligns with yours. You will likely also want to select a vendor that can provide support from implementation and beyond.
It’s clear that utilising software for contract negotiations can help lift the burden on the legal team and create efficiencies for the overall business.
For business in the modern world, there isn’t space for unnecessary inefficiencies and time wasted is money down the drain. Appropriately managed risks shouldn’t mean sacrificing efficiency.
Using contract management software can help ensure negotiations are done efficiently while controlling risk, allowing legal departments to go from cost-centres to a source of competitive advantage.
Plexus' contract management software gives you everything you need to accelerate business productivity in one modular platform. Get contracts signed faster, streamline document workflows, collaborate in real-time and integrate with the apps you already rely on.
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