5 Strategic Ways To Use Contract Process Data in Your Legal Department
Nowadays, most companies have either digitalized their management systems or are actively working toward accomplishing this, making this shift part of the short- and long-term objectives. Among the changes is a transition toward using contract process data within legal departments, creating ease and efficiency in accessing, analyzing, and approving essential details noted in agreements with customers, clients, business partners, and vendors.
For a contract to be deemed legally viable, it must contain the following elements:
Your company’s legal department may often need to analyze, process, and approve agreements quickly to strike a lucrative deal, for example, with a domestic or international client. By using contract process data, your legal team can efficiently create a standardized agreement that meets the laws and regulations of the specific country where it will be executed.
Here are five strategic ways your company’s legal team can use contract process data.
1. Improving legal processes
Oftentimes, when Monday rolls around, many business owners and managers find multiple contracts on their desks still pending approval. Maybe the legal team kicked some of those agreements back with several questions or concerns. Or maybe certain details are still missing and the document needs further review.
As someone in charge of reviewing contracts for a legal department, you may see the value of automatically processing contract data, allowing you to approve or reject contracts based on certain criteria. It’s one of the reasons many legal teams have implemented contract process data using a content management system, or CLM, like Ironclad’s.
CLM helps ease your workload and is essential if you’re handling a high number of contracts the way a legal team usually does. From processing contracts and forming agreements to auditing processes within a firm, CLM creates efficiencies that improve all of these legal processes, which are notoriously time-consuming and often cause delay for all parties involved.
As technology has advanced, relying on traditional paperwork to carry out these legal processes has proven much more tedious and cumbersome, adding unnecessary complications and delay to the contract management process. By contrast, if systems are automated and systematically aligned, a lot of benefits can be availed.
By using metadata, for example, companies can delegate the process of finalizing contracts and conducting negotiations to their systems. This saves time and offers peace of mind. In addition to that, using customer resource management, or CRM, software to list contracts in terms of priority makes legal processes much more manageable. Leveraging contract process data strategically also makes legal processes easier to understand and follow.
2. Forecasting revenue
Forecasting revenue involves reaching an estimated projection of the overall amount your company’s operations will likely generate during a specific time period. Some companies use monthly or quarterly estimates, while others rely on an annual count. Most companies forecast revenue for all three.
The process of forecasting revenue involves a great deal of data collection, collation, and analysis. Essentially, once all of the necessary information is gathered, revenue-related relationships and trends can be spotted within the data, allowing for forecasts to be created.
Revenue forecasting is typically used to spot customer trends and sales projections, but legal teams can benefit from it, too. Spotting future revenue growth trends, for example, enables in-house legal advisors to manage and maximize existing departmental resources. It can also help the legal team track significant contractual data, like the value of existing contracts, and project future income streams based on new agreements. All these forecasts and projections help a company avoid lost revenue by identifying opportunities.
While a variety of software products can help companies forecast revenue trends, many lack the features needed to establish data relationships and trend lines. By contrast, Ironclad’s CRM software allows businesses to keep efficient track of all of these details.
3. Increasing headcount
Retaining legal counsel can get pretty expensive pretty quick. Staffing your legal department with too many attorneys can be fairly costly if your business is new or doesn’t require too much legal insight at the moment.
If you’re taking on many more clients and vendors than before and will be signing more agreements with them, contract data processing systems can help you determine whether increasing the headcount of your legal team is necessary and sustainable. It can also be helpful during the hiring process.
Given that contracts and cases are always subject to regulatory control, you want to make sure you’ve got top legal talent on your team. By inputting relevant job specifications and job descriptions into a contract data processing system along with candidate information, you can easily use the automated software to create a shortlist of potential hires with the type of background you need.
4. Standardizing agreements
Every year, around eight million contracts get redlined — rejected or questioned due to a lack of standardization or human error. This not only harms the parties involved in the contract but also disrupts the legal team’s work, placing a greater strain on a handful of attorneys and legal staff.
Contract process data gives corporate attorneys and auditors a chance to list all of the shortcomings of previous cases, establishing precedents for future reference. Once the precedents are set and a standardized process is put into place, automation and technology can be used to process contracts.
5. Determining priorities
Corporate legal teams work to ensure that the objectives of the organization are met. If the company aims to establish a specific image and make a profit, then the legal team must integrate its processes concerning these objectives. Some contracts and cases bring greater strategic value to a company, while others don’t.
That’s why companies need to know which cases should be prioritized and which cases are to be dealt with later. Strategizing and organizing contract process data doesn’t mean that there will be absolutely no job left for manual labor. Software and contract processing programs contribute towards making this process easier.
Using CLM software, like Ironclad’s, can help legal advisors navigate the most important tasks based on priority.
Be a trendsetter
Improving your corporate legal team’s efficiency is an ongoing process that needs to be supervised regularly. This article has set out some strategies that you can adopt to take advantage of new opportunities and plan for the future.
Strategizing and organizing the legal department through contract process data automation with CLM software, like Ironclad’s, is the most efficient and effective way to adopt the new trends of the industry. It may help resolve murky issues, decrease insecurity, reduce the average amount of time and resources spent on legal tasks, and assist your organization in managing any other pending risks. It will also help the legal team shortlist and navigate between a multitude of cases and contracts.