10 contract lifecycle management (CLM) best practices

Effective contract management can speed-up sales cycles and generate revenue faster for your business. But effective contract management can only exist when you have the right contract processes and practices in place.

This is why businesses are turning to Contract Lifecycle Management (CLM) software.

Contract lifecycle management (CLM) is the process of managing a contract throughout its lifecycle. It begins during the pre-signature stage and finishes during post-signature and is typically a digital process.

CLM software simplifies and improves contract processes across the entire business by using automation and digitalised workflows. Automating workflows can create many businesses benefits, such as mitigated risk, increased efficiency, shorter contract cycles and faster revenue generation. So much so, that Goldman Sachs state that contract negotiations speed up by 50% with CLM software.

To help businesses enhance their CLM processes and ensure their teams get the most of their CLM, we recommend the following 10 contract management best practices.

‍

10 CLM best practices

1. Automation

If your business deals with a lot of contracts, it’s essential to automate the lower-value contract work, such as contract creation.

However, automation can only get you so far when it comes to contract creation tasks. With the best CLM solutions, you can simplify the task even further by enabling your non-legal team members to self-serve.

A self-serve approach for teams such as sales, HR, finance, and procurement not only reduces the legal team’s workload but also empowers these teams to draft their own contracts. This streamlines the overall contract process and significantly accelerates the contract lifecycle.
‍

{{testimonial 1}}

With Summize, non-legal users can create the lower-value, high-volume contract (e.g. NDAs) in under two minutes, straight from familiar business tools such as Outlook, Teams, Salesforce and Slack. Explore all our integrations to learn more.
‍

2. Pre-planning

CLM is designed to address inefficient contract process. But to address this, businesses should map out their current processes and establish a clear understanding of the current state to highlight areas for improvement. Using this process, businesses can better align their use case with CLM vendors and determine their ideal future processes and CLM benefits.
‍

3. Reporting

Reporting on activities is crucial to spotting contract opportunities and mistakes. Many businesses fall into the trap of not keeping up with their signed contracts until they’re due for renewal or expiry. But this can dramatically increase business risk.

When the obligations and T&Cs of an agreement are not met, the risk of termination and even litigation increases. Regular contract analysis allows organisations to make better-informed decisions by spotting inefficiencies and meeting obligations.

"Summize has allowed us to have a cleaner contract repository, better handling of supplier renewals contracts, better ability to pull data on legal risks and obligations in aggregate". Rosie Hawkridge, Legal Counsel at Littlefish.

To enhance your the reporting stage of your CLM process, choose a CLM solution that incorporates AI into its contract analysis tool. The AI will help to identify potential red flags in your contracts, allowing you to detect risks that might otherwise go unnoticed.

Take a look at Summize’s AI contract analysis to fully explore the functionality.
‍

4. Integrations

Users don’t need another all-in-one platform like many traditional CLM solutions. Such solutions often require extensive training and take users away from their work. Therefore, for successful user adoption, native integrations within already-established collaboration tools are crucial for business-wide CLM success.

Enabling users to carry out contract tasks in their existing tech stack creates faster and more efficient contracting. This is why Summize uses an integrated approach to CLM, working within the familiar tools your business already knows and uses.

"Summize's ability to integrate into MS Teams and Word has empowered business users to self-serve and their flexibility and openness to suggestions from both the Legal and Digitalisation team has meant that Summize now fits neatly into our user experience." Kristel Graham, UK Chief Compliance Officer at Kloeckner.

Non-legal users don’t need to log into the Summize platform, instead they continue to work in the likes of Outlook, Teams, Slack, HubSpot and Word, while accessing simplified contract processes through the Summize integration.
‍

5. Central repository

Contracts continually move and change over time, and teams must keep up to date with their content. They should be stored in one place and tracked – two things manual contract management processes can’t provide.

A central repository enables legal teams to manage all their contracts effectively, joining the dots across the business. Summize’s contract repository provides instant summaries for every contract and highlights the risk across all your portfolio to unlock better results and actionable insights.
‍

6. Standardise contract authoring

Manually creating a contract is time-consuming and prone to human error. By standardising contract authoring tasks, businesses can ensure consistency and compliance while accelerating the contract lifecycle.

Pre-approved templates and clauses allow for risk mitigation and compliance, allowing non-legal users to quickly and seamlessly create contracts without legal intervention.

“The main benefits I have seen through using Summize is how much time we have saved. It's so much faster to create a contract through the Teams integration and has freed up the legal teams time to focus on more high-value work.” Neeltje Bramer, Legal Counsel at IONITY.

With Summize, your team can use Teams, Outlook, Salesforce, HubSpot and Slack to create contracts in under two minutes. The contextual Q&A and pre-defined contract creation fields make contract authoring an easy and compliant task.
‍

7. AI-powered reviews and redlining

The contract negotiation stage can be the most time-consuming stage of the contract lifecycle. If completed manually, it can create bottlenecks in the sales cycle, impacting revenue generation and increasing legal risk.

Therefore, Artificial Intelligence (AI) is a fast and effective starting point for standardising your approach to contract negotiation. AI contract reviews and AI redlining allow legal teams to seamlessly review, analyse and redline contracts in no time.
‍

{{download 1}}

‍

8. Train the users

CLM has rapidly expanded beyond its initial focus on contract authoring and legal department improvement. Many solutions now connect to core applications, integrated with business-critical systems to inform essential decisions.

For commercial users, day one will likely be their first time seeing a CLM solution. Therefore, businesses must plan to train their commercial users effectively to ensure business-wide CLM adoption.

This is a key part of Summize’s implementation process. We provide regular one-to-many training so that your entire business can easily take part in quick, informative training sessions without the pressure.

Discover even more best practices when it comes to achieving a successful CLM implementation.
‍

9. Arrange existing contracts

CLM is for all agreements, new and old. But businesses must do some housework on their existing contracts before uploading them. Your CLM solution is only as good as the content that you have stored inside it.
‍

10. Analyse performance

A CLM solution holds vast quantities of data on your contracts. This data provides a window into the real-time visibility of your contract portfolio.

By regularly analysing the performance of the data, businesses can track contract response times, negotiation cycles, request type, status, owner and more. This allows teams to create custom reports to evaluate performance and KPIs and optimise processes.

“Being able to actually provide insights back to rest of the business can be a really powerful tool for legal. So if I can go to our CEO and say, “Every contract that came in this month, I reviewed it and turned it back around to the stakeholder in under 24 hours”, this provides confidence to the business that the legal team is doing their job to the best of their ability and I think that's really powerful.” Tom Pratt, General Counsel at Summize.

‍

Achieving all the CLM best practices with Summize

Even with the best intentions to maximize the potential of your CLM, achieving this isn’t possible without the best CLM software in place.

Summize is the best contract lifecycle management software that can get your whole business onboard to ensure full CLM adoption and success.

For non-legal colleagues, the user experience exists within familiar software such as Gmail, Outlook, Salesforce, Teams, Slack, HubSpot and Jira. No need to log into another platform or learn a complicated way of contracting.

For legal teams, Summize offers you the innovative CLM features you would expect and more, including instant metadata extraction, automated tasks, audit trails and analytics, smart repository and AI-enhanced review capabilities.

Book a demo with our contract experts to explore Summize in action. Share your contract challenges and priorities, and we'll show you our CLM features that will streamline your contract processes.