While contract ownership rests solely on Legal in most businesses, contracts are still a collaborative function that requires knowledge sharing, reviews, and approvals from many different parties within and even outside the business.
And like any people-driven function, efficiency is a direct function of collaboration.
Enter contract collaboration software – tools that help unify different teams working on contracts right from initiating a request to negotiating and redlining the document.
There are many tools in the market that look similar but differ in the stage of the contract lifecycle that they solve. And while the nomenclature is used interchangeably - contract management, contract editing, contract collaboration, or contract automation have distinct responsibilities from each other.
To understand more simply let’s break down a typical contract lifecycle and classify where each tool figures in:
While it is always a good idea to have one platform for all your contracting needs, we will restrict this article to tools that have the ability to simplify all collaborative stages in a contract.
The following are the typical stages in a contract lifecycle for Sales contracts, that can be automated or made more accurate by leveraging a contract collaboration software.
While each contract collaboration software will be different from the other, there are a few benefits that most provide:
Tracking all contract requests, especially when they are coming in from multiple teams, directions, and via multiple channels can get tricky.
With an integrated request dashboard, lawyers can keep track of moving projects, and prioritize contracts that are high-impact or of immediate requirement over others.
This also means better workload management and faster turnaround times.
Speaking of faster TaTs, expecting a lawyer to get back to the internal stakeholder for information at every new instance is a process inefficiency that stretches contract lifecycles.
Contract collaboration software can automate the entire process by pulling in necessary data for Legal to initiate the contract building process.
All of this data is stored in a single repository linked to the requisition dashboard to minimize the time loss in hunting for context. This ensures no lost of missing context, and more importantly - faster, compliant contracts.
If every new edit instance is forcing a new document version for the same contract - there is eventually a trail of unnecessary documents and continuous back-and-forth between teams.
Sharing one version after another via mail or messaging tools can also lead to loss of critical information and force a reboot of the drafting process.
By allowing real-time document edits with an audit tool to track changes made by any stakeholder, contract collaboration software can increase accountability, make the editing process more inclusive, and prevent working in silos.
Many platforms like SpotDraft also allow document integration for 3rd-party edits. Once a new document version for the same contract is imported, the platform automatically analyzes changes, unifies them into one document, and highlights all changes made.
This means that there is only one single version for each contract, and zero document byproduct across folders to worry about.
A contract collaboration software must help make decisions faster, liberate legal departments from process inefficiencies, and make communication smoother. But beyond that, it must also help you follow through and help you meet your organizational needs without kicking up a storm.
Here are 4 quintessential features to look for in a contract collaboration software:
Since contracts are always a high-stakes game, it is necessary that your contract collaboration software does not forego accountability.
Every change made to the contract - irrespective of the editor - needs to be actively monitored, traced, and presented in a unified audit trail. This provides the contract owner the ability to refute unnecessary or erroneous changes and maintain contract security.
Restructuring your existing processes to fit your new contract collaboration software is an added time and effort cost.
Instead, your contract collaboration software should seamlessly integrate with your existing business tools and processes. Custom API integrations enable a tool to mold itself to suit your style of work instead of forcing you through yet another learning curve.
Ever so often a counterparty may try to sneak in an edit or two and try to catch you off guard. It is even harder to track changes to your document when your counterparty sends you a new offline version of your document.
Your contract collaboration software should protect you against such instances by giving you the ability to import an offline document and then analyze it for changes.
Your contract collaboration software should also support you in reviewing and navigating inbounds contracts.
This helps your team get together and establish if the contract is compliant with your standard or negotiation position before you sign on the paper.
While many contract collaboration software may focus only on editing, redlining, and request management – the work of a contract doesn’t end there.
Tracking contract renewal dates help your peers initiate renewal discussions faster. Advanced contract analytics help you gain learnings for future contract issues and aid in the process of solution discovery.
This is homogeneous for any tool you are looking for. Customer success and technological flexibility determine how much a tool would mold to your specific requirements, or how fast they can be integrated with all your existing processes.
Readdressing your existing processes to fit a new tool comes with an added time, knowledge, and flexibility cost and can often lead to confusion. Any long-term implementation therefore must be able to fit snugly to the way you and your peers work.