Contracts have been around for thousands of years. In fact, some of the earliest known examples of human writing appear on stone tablets documenting the terms of trade agreements between two parties. In many senses they are the fabric that holds our society together.
Every business has some sort of contract management process; a series of steps that encompass the management of an organisation's contracts from initiation through to execution, storage, and renewal or expiry. At one end of the spectrum this process is completely ad hoc, whereas more sophisticated organisations spend time understanding how fit-for-purpose contract management software can be leveraged to drive competitive advantage.
Legal functions spend most of their time managing risk through contract drafting, negotiation and execution. And while small businesses might get by using emails, templates and spreadsheets, this approach doesn’t cut it for companies looking to grow.
How should you manage a contract through its lifecycle?
Contract lifecycle management is the oversight and handling contract from briefing, writing, negotiation, amendment, approval and execution, though to storage and renewal.
Because most of the legwork for creating a contract goes through Legal, they often bear the brunt of responsibility for ensuring they have the information necessary to sufficiently manage a contract through its lifecycle.
A contact’s life begins with Legal who are typically required to sift through their email inbox, instant message chains and record verbal support requests to ensure the relevant facts are correctly documented. Once they have the information to write the contract, Legal would typically email (or worse - print and courier!) it to all necessary approvers and signatories, then once signed, store the contract in their filing system.
The issue with managing contracts this way is, without a single, straight-forward method for the business to approach Legal for contract support, this method exposes the business to serious risks where key details may be excluded from contracts.
What happens to a contract after it is signed?
Complications can also arise further into the contract lifecycle if not appropriately managed after they are executed. Ultimately, a contract sitting in a filing cabinet without oversight is a ticking time-bomb.
Contracts tend to fall in between functional lines of accountability: although Lawyers write and manage the contracts, it is the business who manages the projects the contracts oversee. When neither takes responsibility for a contract, the business is exposed to risk once the period it covers lapses, as the business may miss a key opportunity to negotiate a renewal.
What is contract management software?
Contract management software is Legal technology designed to make it easier for in-house Lawyers to create, organise, manage, store, and report on their contracts. Many General Counsel are seeking out solutions purpose-built for in-house Legal functions that will elevate their contract management process and drive competitive advantage.
Contract management software helps in-house Lawyers collate all the required information from the business, manage the drafting and negotiation process, then automate the required approvals and signatories. The best contract management systems also provide sophisticated analytics and reporting, helping to identify bottlenecks and opportunities for process improvement.
Cloud-based contract management software solutions like Plexus Gateway enable Lawyers and the business users to track the progress and priority of new contracts, and easily find legacy contracts from anywhere in the world, on any device.
When should you invest in contract management software?
On average Legal functions spend 65% of their time on contracts, and 68% of functions forecast contract volumes will continue to increase.
Leading General Counsel are already setting their functions up for success by partnering with providers of contract lifecycle management software. This move has enabled them to scale the support their function can provide to the business, and ultimately empowers them and their teams to do more with less.
Plexus Gateway’s contract management module allows you to centralise its system of record and empower everyone in your business to sign, approve and store contracts, straight from their devices.