Law departments are increasingly expected to be business partners, collaborating with executives and other functional experts to drive results. Often times, the legal function struggles (or doesn't know where to begin) to develop metrics and data to provide business related legal intelligence to its business partners. One of the quick ways for law departments to provide valuable data to its business partners is to implement a Contract Management System, whether licensing it directly or working with a service provider that uses one currently.
The legal world has been slow to embrace technology to help solve business problems. For example, the contract. Even some of the most sophisticated organizations are still creating and working with contracts in Microsoft Word. Sometimes using an agreement from the last deal that has specific negotiated provisions for that last deal that have nothing to do with the current one. Email remains the primary means of delivery and sometimes...even storage of the contract. See "The Future of Legal Work" by Constantine Limberakis of Corporate Counsel.
Great! Let's go get a Contract Management System!
If only it were that easy. There are no shortage of Contract Management System or Contract Lifecycle Management System providers. Each solution comes with its positives and negatives. Some charge you for storage. Some charge per user. Some charge for you to invite third party collaborators to use the system (such as the other party to the contract). Some charge by number of contracts. It's difficult to do an apples to apples comparison.
And while there are all of those (and many more) issues to review and identify, you also need to know what is the current end-to-end process internally for initiating, drafting, negotiating, executing, storing and analyzing contracts. Who touches these contracts in one way or another? Who will want access later? What other information systems are currently being used and will your functional business partners (HR, Finance, Business Development, Operations, etc.) want to pull data from the Contract Management System into the systems that they use?
7 Key Contract Management System Features
With all of that said, here are 7 features that should be a part of any Contract Management System you select:
1. Multiparty Collaboration - You want a system that allows the other party to the contract to access the contract you're negotiating within your system. You also may want access for advisors like lawyers and accountants.
2. Electronic Signature - Why go to all this effort if the contracts can't be signed electronically within the system? You might as well go back to faxing.
3. Workflow Management - An excellent feature that provides transparency about where the real bottlenecks in the process are.
4. Contract Compliance - Can you audit who made what changes and when? Also great for enforcement of terms.
5. Contract Storage - Get away from shared drives, external hard drives and your email inbox for contract storage. There's nothing worse than the scramble to find "anyone that has a copy of that contract from 5 years ago" and it's a random redline that someone found lingering in their email inbox. The accessibility for all users is also great.
6. Analytics and Data - Want to know how long it takes your form supply agreement to get negotiated and signed on average? Most Contract Management systems will arm you with that data. Identify what data you'd like to have and use that to weed out some of the providers that are unable to deliver.
7. Integrations - Any Contract Management System that you are considering should integrate easily (at no additional cost) with systems like Oracle, SAP, or Salesforce. You should work with your Information Technology team to identify what other systems you might want your Contract Management System to integrate with.
The right Contract Management System can streamline legal operations significantly, standardize the contract process, and arm the legal team with useful legal business intelligence to share with its functional business partners.