If your high-revenue or fast-growing business is managing a high volume of contracts but struggling to improve efficiency, optimising your contract lifecycle management (CLM) processes can make a significant difference.
Effective CLM can boost productivity, reduce costs, and minimise risks by introducing automation, standardisation, streamlined negotiations, quicker approvals, and better tracking of obligations and expirations —all essential for businesses scaling their operations.
While our article on contract lifecycle management for start-ups explores the key benefits and steps for implementing CLM tools at an early stage, this article focuses on how larger businesses can enhance their processes to support growth, improve contract handling, and achieve better business outcomes.
Our experienced commercial law solicitors are ready to provide the guidance and tools your business needs to stay ahead, ensuring you effectively manage and maximise the potential of your commercial contracts as you scale.
Contents:
- How can you optimise each stage of your contract lifecycle?
- What are the benefits of a CLM platform?
- How do you assess, justify and select a CLM platform?
- How can you improve your contract processes after implementing a CLM platform?
- Optimise your contract lifecycle management processes with expert guidance
How can you optimise each stage of your contract lifecycle?
Optimising and strengthening your CLM processes can help you improve productivity and manage your contracts better, thereby reducing risk across your business.
Here are some key ideas you can adopt for optimising your current CLM:
Use automation, templates, and clause libraries
Your business can produce a repository of pre-approved contract templates and clause libraries specific to your industry and legal needs. This will eliminate the need to draft contracts from scratch for each negotiation, saving you significant time. Over time, you will need to ensure that any pre-approved clauses and contracts remain effective and check for any necessary updates you need to implement.
As part of this process, you’ll need to identify which contracts can be standardised based on factors such as the project frequency, value, and the approval levels required. Certain bespoke or higher-risk contracts may not be suitable for standardisation, and you’ll need to give this process careful thought.
Using a central repository will enable easy access to these templates and ensure that everyone who needs them has access quickly and with ease.
Cloud-based tools can help facilitate collaboration between your sales or procurement teams and in-house or external legal counsel. This can accelerate the drafting process and help reduce errors.
A commercial law firm can help you ensure your standardised templates are watertight and legally sound. Your commercial lawyers can draft, review, and update your templates and clause libraries to reflect current legal rules and effectively protect your business over time.
Streamline your negotiations
Streamlining your negotiation process can further improve efficiency. Consider how you can expedite negotiations by implementing a process to automate tasks such as sending out documents and edits, tracking changes, and utilising real-time collaboration features and shared workspaces.
You can use audit trails and version controls to avoid confusion and bottlenecks in contract negotiations. You should also have an internal process for quickly escalating matters to your commercial lawyers, when necessary, for instance, when a complex or high-risk contract review arises that you don’t have the skills or resources to handle.
Gain faster approvals
A robust CLM process can help automate the contract approval process by automatically sending documents to designated approvers based on predefined rules. This eliminates the need for manual routing and chasing approvals, which could otherwise delay progress.
You should ensure that only authorised personnel can approve contracts to maintain control and accountability over the approval process. You could also integrate this with e-signature platforms to allow swift and easy electronic signing of contracts.
Track contract obligations, renewals, and expiry
CLM software tools and platforms can help you manage contracts by sending automated alerts and reminders about upcoming contract key dates, renewals, and expirations. This will ensure you don't miss critical dates and can take timely action to avoid problems, such as breach of contract scenarios.
A central contract repository will make it easy to find relevant information about renewal terms, expiration dates, and any other critical obligations.
Reporting and analytics tools can provide valuable insights into upcoming renewals and expirations, enabling proactive management of your contracts.
By focusing on and improving these processes, you can optimise each stage of the contract lifecycle, which can help improve efficiency, reduce risks, and contribute to better overall contract management and happier customers and business relationships.
What are the benefits of a CLM platform?
A CLM platform can help streamline the key contract stages, including creation, negotiation, review, execution, and ongoing management. A robust CLM platform will help you gain better control and oversight over your contracts, such as accelerating the signing process through features like e-signatures. Advanced CLM platforms can also leverage AI and automation tools to help manage obligations and monitor contract performance. Investing in an effective CLM platform can help your business work quickly, reduce errors and manage contracts successfully.
How do you assess, justify and select a CLM platform?
To assess the need for implementing a CLM platform, you should start by documenting any inefficiencies and risks in your current contract management processes. For instance, look out for areas where manual handling causes delays, errors, and compliance issues, which a CLM system could streamline.
Conducting a cost-benefit analysis is critical. You should compare the cost of a CLM system with the potential savings and risk reductions it can offer. Consider both direct financial savings and the value of improved compliance, faster contract cycles, and reduced legal risks.
It would be sensible to initiate a small-scale pilot project to demonstrate the value of the CLM platform. Here, you can track performance metrics and gather data to show the impact on efficiency and risk management. This evidence will be crucial when presenting your findings to key decision-makers.
When pitching the product, emphasise the strategic benefits of the CLM platform, including how it aligns with your business goals and enhances overall operational efficiency.
When selecting a CLM platform, your business should consider several factors to ensure it meets your needs. The platform should be user-friendly and intuitive, enabling all team members to use it effectively. It should offer customisable workflows and templates to meet your business’s specific needs. Additionally, the platform should integrate seamlessly with your existing systems to facilitate effective workflows. You should ensure that your existing IT infrastructure can support the CLM platform and determine if the solution can scale up with your business growth.
Given the often-sensitive nature of contracts, robust security features to protect confidential information and personal data are vital when using a CLM platform. When considering implementing a CLM platform, seek input from your commercial lawyers. They can assist in identifying legal risks and areas for improvement and ensuring that your CLM strategy aligns with legal rules (such as privacy laws).
How can you improve your contract processes after implementing a CLM platform?
To get the most out of your CLM system and platform, make sure it benefits your business as much as possible. However, remember to focus on reviewing and improving it for maximum value continually.
Steps you can take include the following:
- Training your team: Ensure that all relevant staff are well-trained to use the CLM system effectively and are familiar with it. They should learn how to create and share contracts, manage approvals, and use reporting tools. Training should also cover tasks such as correctly uploading documents, entering data accurately, and tracking agreements throughout their lifecycles. Encouraging your staff to collaborate easily through tasks, messages, and tracking changes will help you work together and with third parties more smoothly.
- Listening to feedback and using data to improve: Gather feedback from users to identify what is working well and what needs improvement in your CLM system and processes. Surveys, interviews, and discussions with users can help identify problems and ideas for new features. A CLM system often collects high volumes of data that can show how well your contract processes are working. Tracking metrics and analysing data, such as how quickly contracts are finalised and how often they’re changed, can help you find ways to make things work better and smarter in the future.
- Regularly checking processes: Conduct regular checks and reviews of your CLM processes. These audits will help you find ways to make your operations smoother and more efficient. By focusing on these steps, your business will continue to improve its contract management capabilities. Ongoing improvements will help ensure your CLM platform gives you maximum benefit, making contracting easier and more efficient for your team.
- Collaborating with your legal team: Engaging a commercial law firm can provide many benefits in optimising your contract management processes. Your legal team will offer expert knowledge and insights, providing an objective view to identify risks and areas for improvement. They can help to ensure that your contracts comply with relevant legal and regulatory standards, reducing the risk of non-compliance. They can help you handle busy contract workloads efficiently and provide strategic advice on complex contracts and negotiations when necessary.
Optimise your contract lifecycle management processes with expert guidance
For high-revenue or fast-growing businesses, managing an ever-increasing volume of contracts can feel overwhelming, but an optimised contract lifecycle management process can transform how your company operates. Streamlined workflows, better visibility over your obligations, and improved compliance are just a few of the benefits CLM can offer as your business scales.
If procurement forms a key part of your contract lifecycle, adopting strategies from a procurement playbook can further simplify and enhance your supplier management processes while complementing your overall approach to contract lifecycle optimisation.
Our commercial law solicitors have extensive experience helping businesses like yours maximise the value of their contracts while mitigating risks. Whether you need support with implementing automation tools, enhancing negotiation processes, or ensuring your contracts align with business goals, we can provide tailored solutions to meet your needs.
