Contract Lifecycle Management Systems Comprehensive Guide

All Stages of the Contract Processes

It involves all the stages in your contract processes, including drafting, negotiation tracking and logging, approval, sending and receiving feedback, ongoing management, accessible storage, and contract organisation.

This addresses lawyers' pain points directly, for instance, by offering you centralised document storage - for easy access - streamlining the review process for complex documents and drastically reducing your legal compliance issues, all while helping your contracts remain more organised and searchable than ever before through automated, efficient management processes.

By leveraging technology like Pocketlaw's digital online CLM, CLM systems enable your business to automate and streamline these stages for greater efficiency, cost reduction, compliance, and accuracy.

Top Features of a CLM

Contract Lifecycle Management systems bring many features to the forefront when it comes to managing your contracts. 

Some of the top features consist of the following:

☑ A CLM helps you to streamline your legal processes by offering you both customisable and expert-crafted legal templates and playbooks. As a result, these tend to be designed to automate, standardise, and enhance your legal operations efficiently and sustainably.

☑ Help you to revolutionise your legal operations by improving your control, speeding up your processes, and scaling operations. They can also further help your team collaboration, making legal task management more efficient and integrated with other platforms such as Slack to help further enhance transparency.

☑ Utilise AI and LLM technology for superior legal data analysis. With a CLM, they can also help introduce AI into your business by automatically tagging metadata and converting complex data into actionable insights automatically for you. 

☑ Offer you a top-tier security contract repository that offers you, advanced search abilities and seamless integrations, making your contract management functions more of a strategic asset.

☑ Features such as e-Signature and automated workflow solutions come next by offering you and your organisation integrated approval workflows and integrations with DocuSign - simplifying your document signing.

☑ Contract automation features allow you to customise legal templates into dynamic workflows for quick, precise contract creation. Boost efficiency, minimise errors by 80%, and simplify your contract lifecycle overall.

☑ Automatically improve contract editing, reviewing, and redlining with AI-powered tools. They are specially designed for collaboration and negotiation to enhance your team's productivity and accuracy.

☑ Powered by cutting-edge LLMs and trained on legal data, AI used by CLM systems can aid you in drafting, reviewing, and summarising your contracts. 

☑ Automate and manage contracts efficiently across all your teams. A CLM AI-powered solution covers the entire contract lifecycle, from creation to eSigning and tracking.

Table of Contents

• What is a CLM?

• What Makes an Effective CLM?

• Some of the Key Business Benefits a CLM Brings

• How Do You Know If You Need a Contract Management System?

• What is the Best Way To Start With a Contract Lifecycle Management System?

• Are CLM Systems Suitable for All Sizes of Businesses?

• How Does a CLM System Handle Contract Renewals?

• Can a CLM System Help With Regulatory Compliance?

• Is The Data in a CLM System Secure?

• What is the Cost of Implementing a Contact Lifecycle Management System?

• How Long Does it Take to Implement a CLM System?

• Can a CLM System Manage Contracts in Multiple Languages?

• How Does a CLM System Improve Collaboration in Contract Management?

• Ready to Transform Your Contract Management?

What is a CLM?

A Contract Lifecycle Management System, also known as a CLM platform, is a cloud-based contract software solution, such as Pocketlaw, designed to manage the life cycle of your company's contracts. 

These are more advanced platforms built out of a need for companies who suffer from the legal headaches contracts can bring to ensure complaint, templating, mass editing, and control, to name a few areas.

Consequently, companies like Babybjörn improved efficiency 6x by streamlining their legal flows with Pocketlaw’s CLM.

"We improved efficiency 6x by streamlining legal flows with Pocketlaw. Now each department is handling their own standardised legal tasks."
- David Grünbaum, General Counsel, Babybjörn

Consequently, these are more than just places for you to upload your documents and be down with them. Instead, they offer you more end-to-end contract management capabilities, including:

Contract Creation and Templating

Contract Creation and Templating in a CLM system significantly streamline your contract drafting process. 

This allows you to easily automate your own in-house legal templates or use our own pre-built templates to get your legal policies in place within minutes. 

Offering you and your team customisable legal templates, which have been drafted by our legal experts and have standard clauses, ensure consistency and compliance across all your contracts in seconds.

This, in turn, helps you to elevate your operational productivity, as well as cutting human errors by 80%, and to manage the entire contract lifecycle with unmatched simplicity and precision.

This feature not only accelerates your contract generation from days to hours, and in some cases minutes, but also reduces the likelihood of errors - making the overall contract management process more efficient and reliable than using more traditional means.

Contract & Approval Workflow, Tasks & Reminder Automation

Contract & Workflow automation in Contract Lifecycle Management (CLM) systems significantly enhances your efficiency by streamlining your contract processes. 

For instance, it can easily automate what are routine tasks like contract creation, approval, and renewals, reducing manual errors and saving your team's time.

This leads to faster contracts, sales cycles, and consistent policy enforcement and allows your teams to focus on strategic rather than mundane administrative tasks - which can be prone to error.

Allows you to Build a Centralised Contract Repository

A centralised contract repository in a CLM system offers you a unified storage solution for all your contract-related documents.

This feature, for instance, streamlines your contract retrieval, enhances your data consistency, and reduces the risk of misplacement or loss of vital documents and contracts.

This also allows them to be shared with multiple relevant stakeholders, meaning when 1 key person is out of the office, you and your team can still have access to the contract and continue its vital process without waiting for that team member to get back to work.

As a result, they provide you with easy access to contracts for efficient management and review - ensuring that all stakeholders have a clear and current view of the contractual obligations, which ones are outstanding, and their current statuses, along with metadata around when they were signed off.

Analytics and Reporting

Contract Analytics and Reporting features in a CLM system offer you deep insights into your contract performance and risks.

For instance, they can enable your business to make data-driven decisions by tracking key metrics and identifying trends that you may not see occurring otherwise. 

This then leads to better internal risk management, improved contract compliance, and more strategic planning based on comprehensive contract data analysis.

Allows for Document Metadata Tagging

Contract Lifecycle Management Systems also further offer the capability to tag documents with metadata, allowing for efficient organization and retrieval of your contracts when you need to find them quickly.

This Metadata tagging enables you and your users to categorise your contracts based on relevant attributes such as contract type, expiration date, parties involved, and contract status to name just a few ways you can utilise metadata with your legal contracts.

Integration Capabilities

Such as our Salesforce integration in a Contract Lifecycle Management (CLM) system significantly enhances their utility.

By seamlessly connecting with other business tools, such as Salesforce, for instance, a CLM system ensures consistent data flow and reduces manual data entry.

These integrations can easily see you getting deals signed 10x faster, with data shared between the platforms automatically.

This integration then allows for an immediate sync of your contract's contact data, leading to improved and up-to-date customer information.

Your Legal Team, Powered by AI

The integration of Artificial Intelligence, especially around contract summarising, to name only 1 use case, in a CLM system significantly enhances your contract management efficiency. 

This is due to how AI algorithms can analyse your contract terms, identify risks, and provide actionable insights, all leading to more informed decision-making. 

You can transform your legal processes with an AI assistant.

Pocketlaw PLAI assistant can support you with everything from drafting, reviewing and understanding documents to creating summaries automatically for you.

You can then ask any question in natural language and get instant answers powered by some of the state-of-the-art LLMs available.

E-Signature Integration

The E-signature integration allows for secure and legally binding digital signatures on contracts - expediting the contract execution process. 

This feature streamlines the signing process, eliminates the need for physical document handling, and provides you with a faster and more convenient way to finalise your agreements.

Compliance Management

Compliance management features of a CLM help you ensure that your contracts adhere to internal policies as well as external regulations.

For instance, it can alert you to compliance timelines, reducing your legal risks.

This feature is vital for maintaining contractual integrity and minimising the likelihood of penalties, especially in larger organisations.

Customisation and Scalability

The ability to customise and scale the CLM system according to business needs is crucial. 

This feature allows businesses to tailor the system to their specific processes and grow the system's capabilities in line with business expansion, ensuring long-term utility and relevance.

Collaboration and Negotiation

Contract Lifecycle Management Systems further helps you and your teams create a seamless collaboration between your stakeholders. This then helps to enhance the negotiation processes with real-time updates to contracts, along with shared access. 

This shared access and real-time updates then further ensure all parties are aligned and can contribute effectively and quickly to the contract's terms and conditions with the latest up-to-date versions.

Contract Redlining

These CLM systems help you streamline your legal Redlining process by allowing all parties to suggest and view changes in your contracts. 

This Redlining feature ensures transparency while speeding up contract revisions and simplifying the process of reaching all parties to agree on the final contract terms.

Approval Workflow

CLMs automate the approval workflow process, which ensures contracts move efficiently from one stage to the next. 

This is done with ease with the use of customisable approval rules and automatic real-time notifications that keep relevant parties informed when changes are made. This reduces delays and ensures your contracts are reviewed and approved as quickly as they can.

Learn how Teya unlocked the potential for growth and success, ensuring a simplified, straightforward, and seamless contract lifecycle management experience

What Makes an Effective CLM?

As we all know, in today's fast-paced and increasingly digital-focused business environments, managing contracts efficiently and incredibly securely is more crucial than ever before.

In fact, according to Gartner, only 13% of legal leaders feel confident that they can manage cross-functional risks without creating a drag on the business.

An effective CLM system not only saves you time and reduces your company's administrative burdens but also minimises the risk of the contracts getting lost or containing out-of-date information - all of which enhances your organisation's overall compliance. 

It accomplishes this by enabling your business's key stakeholders make better-informed decisions, respond more quickly to changes, and optimise your commercial relationships through real-time digital updates that your stakeholders can adapt when they need to - even outside of working office hours - all while reducing your costs at the same time. 

Some of the Key Business Benefits a CLM Brings

The importance of CLM in modern business cannot be overstated. It plays, a pivotal role in the following areas to name a few:

Risk Mitigation

A Contract Lifecycle Management (CLM) system significantly reduces your business risks by quickly ensuring compliance with legal and regulatory standards in real time and en masse.

For instance, it proactively identifies potential contract risks and automates compliance checks - minimising the likelihood of costly legal disputes and penalties from coming in down the line.

Then, when a compliance issue is found, it allows you to quickly and easily correct it en masse.

This increased oversight and control that you get can make a CLM an essential tool for mitigating contract-related risks.

Cost Reduction

When you implement a Contract Lifecycle Management (CLM) system, one of the first things you notice is the significant reduction in your operational costs - because you are automating what have previously been time-intensive routine tasks.

For instance, according to  EY Law and the Harvard Law School Center on the Legal Profession, 20% of every in-house legal counsel's hours is currently spent on low-value, repetitive or routine tasks.

A CLM minimises the need for extensive manual tasks, leading you to free up your lawyer’s time to focus on important legal affairs of the business. 

Cuts down on administrative & human errors

They can also cut down on administrative errors and delays - reducing costly oversights and inefficiencies with your existing contract processes.

This streamlined process ensures that your businesses can manage your contracts more effectively, with a notable reduction in overall expenditure, or just freeing up your internal resources to be able to do a lot more than they were able to prior.

Improved Efficiency

When discussing cost benefits, this follows nicely with the improved efficiencies that using a Contract Lifecycle Management (CLM) system brings to your organisation.

For instance, CLMs allow your teams to self-serve, all while your legal teams can remain in control of the contracts and at scale.

From automating contracts and workflows to allowing you to have a secure, centralised contract repository, it significantly reduces the time and effort required for contract creation, approval, and getting sign-off via e-signing. 

This streamlined approach minimises manual errors and speeds up processes, allowing your business to focus more on your strategic initiatives and less on your administrative tasks to your sales pipeline and contract renewals.

Enhanced Visibility & Oversights

A CLM is not all about efficiencies. It also enables you to see more and allows just the right members of your organisation to access and collaborate together.

This additional visibility and contract metadata and data insights across all your contract processes are accomplished as it provides you with a centralised platform where you and your other key stakeholders can easily access, monitor, and analyse your contract data. 

This transparency ensures that every phase of the contract lifecycle is visible, leading to better decision-making and more effective risk management. 

Such oversight is crucial in identifying potential issues early and ensuring compliance with contractual obligations as well.

How Do You Know If You Need a Contract Management System?

If you and your organisation answer yes to any of the following, you must get a free obligation demo booked today.

Inconsistencies in Your Contract Creations

If you are seeing variations in your contract drafting, when the contracts are practically the same, and or are noticing that you are also getting compliance issues and misunderstandings occurring, then this would be a key sign.

Difficulty in Tracking Obligations

If you are finding it hard to keep track of contractual obligations and deadlines, and in general, this is a pain point for the company - or something that could be more challenging for you - especially with a large volume of contracts. Then, this again would be another sign.

Limited Visibility and Accessibility

If you answer Yes to having difficulty accessing your current and past contracts quickly, or at all, as well as finding that this hinders your decision-making and contract analysis.

Inefficient Approval Processes

Another reason to look at testing our CLM is if you need help with lengthy or unclear approval workflows - and are finding this is delaying your contract creations and sales pipeline.

Compliance Risks

If you are not sure if you are remaining compliant with contract timelines  and internal policies that require constant vigilance.

Manual Process Inefficiencies

You find your teams have a lot of time-consuming manual processes that are prone to errors and are reducing your operational efficiency. 

What is the Best Way To Start With a Contract Lifecycle Management System?

When migrating to a CLM for the first time, it is essential to have a clear understanding of your current processes. 

If you map your processes first, this helps when migrating over to a new product. This process, for instance, could consist of the following:

Documenting Your Existing Workflows

Ideally, you and your teams should identify how contracts are initiated, drafted, reviewed, approved, and managed.

Then, take into consideration your new CLM tools that were not available prior, what needs to remain the same, or what can change to improve your time efficiency.

Identifying Key Participants

You should also identify and map out who is currently involved at each stage of the contract lifecycles.

Assessing Tools and Resources

Next, you need to evaluate the tools currently in use, such as spreadsheets, emails, or document management systems, and how these can be improved with the new tools you now have in hand.

Analysing Timeframes and Bottlenecks

One of the key benefits of a CLM is that it removes many bottlenecks. You can read how Earthly accomplished this at scale.

For instance, you should note the time taken for each stage of your existing contract processes and identify areas where delays frequently occur that can now be removed.

This mapping provides you with a baseline to identify areas for improvement and integration with our CLM system.

Are CLM Systems Suitable for All Sizes of Businesses?

Yes, with Pocketlaw especially, we have created a platform that scales as your organisation grows and is highly customisable to suit your individual business.

How Does a CLM System Handle Contract Renewals

Contract renewals are handled via automated reminders while simultaneously tracking renewal dates - ensuring timely decision-making and actions on contract renewals are made much quicker.

Can a CLM System Help With Compliance?

Yes, it can track and manage your contract timeline requirements - reducing the risk of non-compliance penalties.

Is The Data in a CLM System Secure?

With our industry-leading CLM, we have implemented robust security features like encryption and access controls to protect your contract data.

What is the Cost of Implementing a Contact Lifecycle Management System?

Costs can vary based on the level of complexity and features that you and your organisation individually need.

Why not book a free demo to see what features you need or contact our team directly to talk through what the most cost-effective solution for you is?

How Long Does it Take to Implement a CLM System?

Implementation time varies based on what you need to migrate and set up. Still, most clients can be set up within a few days to weeks - to a few months for larger enterprise-level customers who have very complex needs and processes already in place that need to be unravelled and mapped out correctly.

Does a Contract Lifecycle Management System Require Extensive Training to Use?

No, we have built the platform to be heavily focused on a great, usable interface with intuitive processes.

Our team is also always on hand whenever you need them to help quickly walk you through using the system and getting the most out of it.

Can a CLM System Manage Contracts in Multiple Languages?

Yes, the CLM system supports multiple languages, and we have built this in from the core - making it very suitable for large-scale international businesses.

How Does a CLM System Improve Collaboration in Contract Management?

We offer many collaboration tools for your internal and external stakeholders to review, edit, and approve contracts efficiently at any time from anywhere.

Ready to Transform Your Contract Management?

Ready to experience firsthand how our Contract Lifecycle Management system can revolutionise your contract processes?

Then, take advantage of the opportunity to see our innovative Platform in action. 

Book your free demo today and step into the world of efficient, streamlined, and intelligent contract management.