Using CLM Strategy to Streamline Contract Risk Management
Contract risk management is an essential part of any legal department. The risk of contract-related errors and oversights can lead to expensive complications, delays, and costly litigation if it’s not handled correctly. However, managing contracts can be time-consuming. Leveraging legal technology offers the potential to streamline the process — and the benefits can be significant. A Contract Lifecycle Management (CLM) strategy can provide a number of advantages when it comes to managing contracts efficiently and ensuring that risks are minimized.
Advantages of Precedent Documents
One significant advantage of a CLM strategy is the use of precedent documents. Precedent documents are records of past agreements and related documents. These documents provide the legal team with information about key terms — terms which they can quickly and easily evaluate. Precedent documents are of great use in a CLM strategy as they allow legal teams to maintain consistency in new contracts and manage risk more effectively.
Benefits of a Comprehensive Library
The problem arises, however, when lawyers can’t easily access precedent documents. Printed documents, emails, and documents hosted on different storage systems can make it practically impossible to quickly get to the agreement or document you need without wasting a significant amount of time. This is where the advantages of a cloud-based, library-driven knowledge management system become especially useful. This type of tool securely stores all relevant documents and contracts in a central location and lets users search them quickly.
A comprehensive library enables lawyers to quickly search for key terms and accurately assess the associated risks. This reduces the risk of claims for breach of contract and can expedite the contract risk management process. Furthermore, it ensures that all contract terms are consistent.
Automated Contract Check for Missing Dates
Another benefit of leveraging legal technology in a CLM strategy is the ability to automate alert notifications. This eliminates the risk of missing a critical date in a legal contract. With a modern legal technology-enabled contract management system, users can set up automatic reminders and alerts for contract milestones. This makes it easier to keep track of all important dates and ensures that the legal team quickly address any potential contract risks.
Creating Automated Workflows for Contract Approvals
Another way to maximize efficiency is with automated workflows. The review process can be time-consuming, particularly when tracking changes, collecting signatures, and getting feedback from other departments and parties. An automated workflow streamlines this process and reduces the risk of contract oversight by alerting all stakeholders when changes need to be reviewed and signed off on. This helps everyone stay up-to-date and comply with the required timeline.
With a proper CLM strategy, legal teams can effectively manage risk and maintain contractual consistency by leveraging modern legal technologies. By utilizing technologies such as Review AI, a cloud-based library-driven Knowledge Management system, an automated reminder and alert system, and automated contract workflows, legal teams can streamline the contract risk management process and feel confident that all of their contracts are handled securely and efficiently.