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Table of contents
1. What is contract automation?2. What parts of a contract can I automate?3. What tools can I use to automate contracts?
4. Are there any benefits to automation?5. What is a contract management software?6. What are some must-have features in a contract management software?

What is contract automation?

Let's accept it.

Manually preparing and managing contracts is plain boring.

Halfway through a contract, don’t you wish there was something you could do to speed up the entire process?

Well, lucky for you, there is a way!

Say hello to Contract Automation, which refers to anything that takes away the manual element and human intervention when it comes to creating, distributing, and storing business contracts.

Now, let’s not get confused by the word “automation” as it does not refer to any all-in-one, cutting-edge software in particular.

Actually, it’s quite the opposite. Automating contracts is easier than you think it is.

The process can include something as simple as a spreadsheet <link to CMS spreadsheet> to anything as complex as artificial intelligence <link to an AI blog>

What matters the most is how much time, effort, and resources you save on processing contracts by using the technology of your choice.

Another important facet of automation is that it brings structure and transparency to the entire contract workflow. 

It also enables non-legal teams to operate independently, allowing lawyers to focus on more important tasks at hand.

What parts of a contract can I automate?

The previous section established that a software is not essential to the automation process. 

How is this possible?

For this, let’s take a page out of James Clear’s phenomenal book, Atomic Habits <link to book>.

Here, Clear stresses the importance of systems over goals as they are key to making consistent progress and enjoying continued success.

The same methodology can be applied to automating contracts.

But first, it is essential to understand the contract lifecycle.

An Exercise For You!
 •  Chart out the typical workflow you follow when creating contracts.
 •
 Identify the main activities and sub-activities you undertake under each category.
 •
 List out all stakeholders who come in contact with the contract.
 •
 Make a note of the average time you take to fulfill each activity.
   Don’t also forget to jot down all the tools you use.

A conventional contract lifecycle usually consists of the activities listed in the above image.

Next, let’s identify tasks that can be automated across the different categories and connect them with tools. This way, we can build a system to streamline contracts, one that is both versatile and scalable.

Below are a few instances of how manual tasks can be optimized using technology:

  • When drafting a contract, you can use a form to collect important information from stakeholders to fill in different fields. This way, you can reduce error rates, spend less time on review, and improve the overall turnaround time.
  • During the approval stage, you can use an email scheduling plugin to plan emails in advance and connect with stakeholders in an orderly manner. Thus, you can improve communication between parties and close contracts faster.
  • When storing contracts, you can use a spreadsheet to record and track documents. So the next time you decide to pull up documents, you can do it quickly and easily.

In the next section, we shall explore general-purpose tools that do not cost anything and can help you.

What tools can I use to automate contracts?

Here’s a comprehensive list of free tools that you can use to begin automating your contracts.

CATEGORY
TASK
TOOL
Request
Triaging and Ticketing
Google Forms /
Google Spreadsheets
Authoring
Drafting /
Clause Library
Google Drive
Negotiation
Redlining /
Collaboration
Google Docs
Approval
eSignatures
Adobe Sign
Execution
Obligation Management /
Renewals
Google Spreadsheets /
Google Calendar
Repository
Tags and Filters /
Data Storage
Google Spreadsheets /
Google Drive

Are there any benefits to automation?

Obviously, yes!

Multiple statistics show that organizations lose thousands in hours and dollars due to manual contract workflows.

Here are some figures to give you some perspective:

  • According to World Commerce and Contracting, on average, businesses shell out 9% of their revenues to compensate for poor contract management processes.
  • Upto 40% of a contract value is lost in the absence of proper oversight, revealed a KPMG survey.
  • A study by Aberdeen Research found that on average, it takes between 20 to 30 days for a company to create, negotiate, and finalize contracts.
  • A staggering 71% of businesses cannot locate approximately 10% of their contracts, an estimate by the Journal of Contract Management reports.

What’s more, World Commerce and Contracting examined the salaries of all personnel involved in the contract lifecycle and reported that it costs an organization about $6900 to execute simple agreements, while more complex contracts can cost around $49000!

Choosing automation has multiple benefits for the organization, including:

  • Better efficiency and output: No more hiccups when it comes to creating contracts from scratch. Automation makes it possible to generate contracts in minutes and with very little effort.
  • Increase in profits: With automation it is possible to take on higher volumes of contracts without breaking a sweat, resulting in higher revenue inflow.
  • Elimination of manual work: Teams are no longer burdened with officiating tasks manually. This frees up time for employees, enabling them to focus on more important tasks at hand.
  • More transparency: Automation helps strengthen the element of accountability in the workflow by allowing teams to track tasks and identify bottlenecks easily. 
  • Complete ownership: With automation, the organization enjoys better workflow and improved data standardization. It also allows teams to work independently with lesser dependency on the in-house legal team.
Benefits to Legal Teams
  •
 Ensure consistency in legal language through the use of pre-approved templates.
   Effective tracking of contractual obligations, such as, renewal dates, contract terms, and more.
   Audit contract management framework and develop KPIs for better goal-setting.
   Remove bottlenecks in all levels of the contract lifecycle, including redlining and esignatures.
Benefits to Sales Teams
  •
 Spend less time on legal reviews and close deals faster.
   Generate contracts quickly using pre-approved clauses and versions from the library.
   Simplify and save time on processing legal requests.
   Use esignatures to collect approvals from multiple stakeholders and speed up the entire process.

What is a contract management software?

By now, you know that it is possible to automate different parts of a contract’s workflow using tools.

But, wouldn’t it be cumbersome to juggle between multiple tools?

Isn’t there a single platform that can handle all contract-related tasks?

Yes, there is!

The answer is a Contract Automation Software, which is a single, consolidated digital platform that enables teams to create and execute end-to-end workflows to automate all parts of the contract.

You can compare this with the Customer Relationship Management (CRM) software used by almost every sales department.

Just like how a CRM unites all prospect and customer data and interactions on one dashboard for the sales team, the contract automation software achieves the same for the legal team.

What are some must-have features in a contract management software?

Now that you know the ins and outs of a contract automation software, let’s focus on the features.

A good contract automation software should have the following features:

  • Templates: Allows legal teams to create pre-approved legal clauses and documents that can be used by other business teams to generate self-serving contracts.
  • Text Editor: An integrated word processing tool that allows users to edit and modify legal documents online without any hassles.
  • Collaborative Editing: Allows multiple users, including counterparties, to simultaneously make changes to a document. With an autosave feature, all changes are saved on a single version.
  • Audit Trail: Makes it easier to track all changes made to the document by the different users.
  • eSignature: Allows teams to collect approvals from stakeholders directly in a systematic manner.
  • Repository: Stores all contracts chronologically and securely. By the use of tags and filters, it is possible to sort and retrieve contracts quickly.