An EY Law and Harvard survey revealed that 57% of companies lose business opportunities or experience slow revenue due to inefficiencies in contracting processes.
Despite the growing awareness of the ramifications of bad contract management practices, switching from traditional contracting processes has proven to be more difficult than it sounds, with 38% of businesses failing on their first try!
In the face of critical barriers, leveraging an innovative consulting service arms you with invaluable insights and expertise, boosting your chances of achieving success with your transformation process.
In this post, we’ve covered everything you need to know, from how a consulting service can be a game-changer to how you can identify the right consulting partner for your contract management needs.
5 Warning signs your contract management processes need an upgrade
“Revenue growth is a fundamental goal for any commercial organization and effective contracting processes play a crucial role in making that possible.”
~Kate Barton, EY Global Vice Chair – Tax
Inefficient Contracting Remains a Major Challenge for Businesses
A poorly managed contract can be a major drain of resources and a deterrent to success. This can be due to the presence of outdated systems in your contract management tech stack or your team’s inability to leverage existing tools to their full potential.
Here, we’ve covered some of the most common red flags that indicate a dire need for an upgrade in contract management processes. If any of these warning signs resonate with you, then it’s time to rethink your approach.
#1 You’re stuck on manual processes
Imagine spending a large chunk of your day manually drafting contracts, chasing signatures, and tracking renewals. Every minute spent on these routine tasks is a minute taken away from strategic initiatives and innovation.
“I often see lawyers and paralegals who are overburdened with reviews of routine contracts. Most of these individuals would rather spend their time sitting in a more strategic role focused on complex, challenging work.”
~Rebecca Thorkildsen, Managing Director, Deloitte Legal Business Services
The General Counsel Imperative: How does contracting complexity hide clear profitability?
Manual processes lack scalability, expose teams to burnout, and ultimately impede growth. If your contract management approach is driven by manual processes, you're likely missing out on opportunities for efficiency gains, cost savings, and risk mitigation.
#2 Review and approval timelines are often protracted
“If you try to read a complex contract carefully, from front to back, and expect to understand it on just the first read-through, that’s wishful thinking (and potentially very messy).”
~Sterling Miller, CEO and Senior Counsel, Hilgers Graben PLLC
Ten Things: How to Read a Contract
Timely execution of contracts is crucial for maintaining momentum in business operations. However, if your review and approval processes feel like a relay race in slow motion, it’s a clear indication that your contract management system needs a serious upgrade.
Elongated timelines not only delay revenue generation but also foster frustration among stakeholders. In today's fast-paced business environments, speed is critical, and any bottlenecks in the contract lifecycle can hinder responsiveness to market dynamics and opportunities.
Also read: The Perfect Contract Review Checklist for Commercial Contracts
#3 You’re always dealing with errors and reworks
Mistakes happen, but if you find yourself constantly caught in a whirlwind of errors and reworks within your contracts, it is safe to say your contract management process needs an overhaul.
Typos, missing clauses, or discrepancies in terms—such errors not only waste your time but also introduce unnecessary risks and uncertainties into your agreements.
#4 Access to contract data is limited
Access to prompt and accurate information is paramount to effective decision-making in today's data-driven business landscape.
Your contracts carry within them a goldmine of data that can be explored to identify hidden opportunities and amplify results. Does your team have a robust system for in-depth contract data analysis, or does it rely mostly on gut feelings and surface-level information?
Also read: How to Use Contract Analytics Software to Uncover Insights
Limited access to contract data not only impedes collaboration and performance optimization but also increases the risk of overlooking critical terms and obligations.
“While making decisions, I listen to the instinct and then try to look for the data that supports the instinct. I think it's very important to be data-driven in any way that you make decisions. It's important to be an evidence-based lawyer, especially in the technology space.”
~Ken Priore, ex-Director of Privacy, Atlassian
Mastering the Intersection of Law, Technology, and Privacy
#5 Contracts are scattered among teams
Imagine the chaos of having contracts scattered across various departments, shared drives, and email threads, making it nearly impossible to keep track of agreements, obligations, and renewals.
Scattered contracts not only increase the risk of mismanagement, errors, and compliance issues but also hinder efficiency and productivity.
“Think about how many contracts sit on someone’s laptop or in multiple databases and then think about the value of contract management. The importance of simply being able to locate all of the company’s contracts and relevant amendments in one place without significant effort cannot be minimized.”
~Sterling Miller, CEO and Senior Counsel, Hilgers Graben PLLC
Ten Things: Minimizing Risk In Commercial Contracts
Whether it's due to decentralized processes, lack of centralized oversight, or inadequate collaboration tools, fragmented contracts indicate a pressing need for a unified and streamlined contract management approach.
Also read: Contract Repository—Everything You Need to Know
Achieving operational excellence by leveraging innovative consulting services
If the scenarios described in the previous section strike a chord, then you’re probably considering making the switch to a more efficient and modern contract management approach.
Depending on the nature of your current contract management process, this might entail porting to a tech-driven method or replacing legacy systems with more robust and up-to-date solutions.
Regardless, this is not a journey you should embark on alone. Leveraging innovative consulting services such as Lex by SpotDraft can give you access to invaluable expertise, guidance, and support in your bid to achieve operational excellence with contract management processes.
Here’s how:
#1 Process audits and tailored solutions
Consulting services typically conduct a thorough assessment of your existing processes, pinpoint inefficiencies, and design a customized roadmap for revamping your contract management practices.
This gives you a clear and objective picture of bottlenecks and weaknesses you might not even be aware of.
Additionally, by following the expert guidance of consulting services, you have a better-defined pathway to your desired outcomes, avoiding costly trial-and-error processes.
#2 Tool selection and successful implementation
The Contract Lifecycle Management (CLM) market is bursting with options. These tools come with an abundance of features that can be a double-edged sword, and choosing the best fit can be daunting.
But this is where consultants come in handy.
The contract management software market is their everyday playground. They know how to find tools with functionalities, data security, scalability, and integration capabilities that are compatible with your organization's needs and available resources.
Beyond selection, consultants are well-versed in CLM implementation, having navigated this terrain multiple times. They understand the intricacies of change management and user adoption, offering smooth transitions with minimal disruptions to internal operations.
By selecting a solution that suits your unique pain points and ensuring smooth adoption, consultants save you considerable time and resources in tool research and testing.
Also read: Best Practices for Leveraging Advisory Services in CLM Implementation
#3 Training and knowledge transfer
Even the most advanced CLM solutions are only as effective as the team using them. Consulting services don't simply implement your new tools and walk away. They dedicate resources to comprehensive training programs, building the capacity of your staff to harness the full potential of your chosen CLM technology.
Investing in training ensures your team not only utilizes your new tools correctly but also understands their true potential in facilitating a smoother workflow. This minimizes resistance and increases the likelihood of sustained adoption.
#4 Data strategy development and implementation
Many organizations overlook the strategic value embedded within their contracts. Without a structured plan for capturing, analyzing, and leveraging contract data, valuable insights remain concealed.
With the help of consultants, you can create and execute a data strategy that turns this vast information resource into a competitive advantage. This involves defining relevant data points, setting up processes for accurate data extraction, and choosing suitable analytics tools.
Knowing how to harness data helps you take the guesswork out of your contract operations. With a properly formulated data strategy, you'll be able to identify high-performing contract templates, polish your negotiation strategies, accelerate Turn Around Times (TATs), and ultimately boost your contracts' profitability.
#5 Risk mitigation and compliance
”You can either be part of the cleanup crew or do stuff to avoid that cleanup situation altogether."
~Gitanjali Faleiro, GC, Company Secretary & CCO at Greenhill & Co.
Navigating the C-Suite as a GC
Staying abreast of the ever-evolving landscape of risk and compliance in various industries is one of the many things that keep consultants competitive.
They bring not only technical expertise but also strategic awareness to mitigate risk and minimize exposure to liabilities. By following their guidance, you can restructure your contracts and incorporate the right guardrails, ensuring complete adherence to various compliance requirements.
“After ‘will I go to jail for that?’ the most common question asked of in-house counsel typically involves commercial contracts and whether ‘it’s okay for us to sign this?’”
~Sterling Miller, CEO and Senior Counsel, Hilgers Graben PLLC
Ten Things: Minimizing Risk In Commercial Contracts
With expert consultation, you reduce the possibility of legal penalties, financial losses due to breach of obligations, and reputational damages from prolonged legal battles. Your contracts become secure pillars of your business instead of weak links that undermine your progress.
Also read: Contract Risk Assessment Checklist: A Guide to Future-Proofing Your Agreements
Identifying the right consulting partner: 5 critical considerations
While collaborating with a contract management consulting service comes with transformative benefits for your organization, who you choose as your consulting partner can go a long way in shaping the trajectory of your contract management process.
Here, we’ve covered 5 crucial things to look out for in your potential consultants. That way, you can get the best returns for your investment.
#1 How does their pricing fit your budget?
While investing in consulting services can yield significant returns in terms of process optimization and efficiency gains, it's crucial to ensure that the cost of engagement falls within your financial parameters.
A transparent pricing structure, tailored to your unique needs, facilitates better decision-making and avoids unexpected financial strain down the line.
Lex by SpotDraft offers a credit-based pricing system where one credit is equivalent to 1 hour. $499 per month gives you access to 10 credits, $899 per month entitles you to 20 credits, while $4199 per month offers 100 credits.
The system is also designed to let you buy extra credits as needed. That way, you have access to a pricing system that grows with your business.
#2 Do they have a strong track record?
Past performance is often the best indicator of future success. Seek testimonials, case studies, and references from previous clients to gauge the consultant's performance and customer satisfaction levels.
Pay attention to whether they have experience working with businesses like yours in terms of size, industry, and the complexity of contracts. Also, consider factors such as the consulting service's tenure in the industry and any accolades or certifications it may have attained.
#3 What kind of expertise do they bring to the table?
Ideally, your chosen consultant should have a team with practical experience across diverse industries. A multidisciplinary team with diverse skill sets can offer holistic solutions tailored to your organization's unique needs, ensuring comprehensive support across all stages of the consultancy engagement.
For instance, Lex by SpotDraft comprises over 100 seasoned experts proficient in various areas of contract management, from legal compliance to technical considerations.
This ensures that regardless of your contract management needs, there's always a team of experts ready to dive in and lend you a hand.
#4 How does their working style fit your organization's values and philosophies?
A consulting engagement is ultimately a collaboration. Evaluate the consultants' communication style, working methodology, and responsiveness. For a successful partnership, they should mesh well with your organizational culture and project approach.
Consider how adaptable they are and if they embrace open, transparent communication to effectively address potential challenges along the way.
#5 Do they offer ongoing support and training for your team?
Projects rarely follow a perfect script. When changes happen, your consultant should be a force for solutions, not panic. Look for an adaptable partner willing to shift gears if needed without compromising quality.
Discuss how they've handled unforeseen challenges in past projects to evaluate their flexibility.
The best consultants are proactive problem-solvers who identify potential hurdles and present flexible solutions while keeping you informed and involved in decision-making.
Lex by SpotDraft: The search ends here!
Launched by SpotDraft CLM, Lex is a comprehensive suite of AI-powered professional services designed to help SMBs and enterprises optimize their contract management processes.
With over 100 seasoned legal professionals in its ecosystem, Lex is built to be the hyper-productive extension of your team, offering support in diverse areas of contract management.
Lex provides contract consulting services for organizations looking to take their contract management approach to another level. This encompasses areas such as:
- Process audits
- Contract management training
- CLM selection, evaluation, and transition
- Playbook and template creation
- Contract review processes and more
Alongside contract consulting, Lex offers a plethora of other services, encompassing routine and non-routine tasks. This includes contract creation, negotiation, centralization, reporting, and more. Click here to view the complete list of services.
Unlike many other professional services, Lex is driven by cutting-edge technologies, with some of the industry's best AI tools in its arsenal. This ensures that all high-volume tasks are completed in record time without compromising quality and accuracy.
Additionally, while Lex is a service by SpotDraft, it is platform-agnostic—meaning that you do not have to be a SpotDraft user to benefit from its offerings.
Ready to give your contract management process a makeover? Click here to get in touch with our representative.
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