Here are the topics that we’ll cover in this introduction to 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.
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.
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:
In the next section, we shall explore general-purpose tools that do not cost anything and can help you.
Here’s a comprehensive list of free tools that you can use to begin automating your contracts.
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:
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:
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.
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.
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: