Contract management is an essential competency for any legal department, yet many in-house lawyers still employ ad-hoc processes across the contract lifecycle – leaving them exposed to risk.
Here we debunk 5 common myths about contract management that hold many legal departments back from adopting technology that can boost efficiency and help them create value.
Myth 1: My contracts won’t be safe in the cloud
Thinking that your contracts are safe when they are stored in a filing cabinet or on your laptop is not only outdated but also dangerous. Unlike hard copies or locally stored contracts (or any legal documents for that matter) that can be easily damaged, lost, misplaced, or stolen, cloud storage protects you against authorised access and data breaches. In the age of GDPR, you really cannot afford take chances with how you store or share contracts with personal data! When it comes to data security, cloud providers need to adhere to some of the strictest regulations around – making it the best choice for legal departments and IT departments who do not want to hassle to maintain corporate servers.
Myth 2: My manual processes are just as effective to manage contracts
Manual processes waste time and money. Take contract drafting for example. If you still rely on “cut and paste” templates to draft contracts you are putting your business at risk if a key term is omitted in a contract due to an error. On the other hand, by using templates and document automation tools, you can actually provide the business with “ready to sign” contracts quickly.
What’s more, with contract management systems Legal can set rules and workflows so that everyone knows who is responsible for doing what and when. With smarter, more collaborative tools, you can be even more effective, while reducing risk and providing value.
Myth 3: I won’t have visibility over contract data unless it’s in my spreadsheet
When contract data is scattered in different files that are “out of sight, out of mind”, businesses can easily miss deadlines or fail to fulfill obligations, exposing themselves to financial and legal risks. One of the best things about cloud-based legal management software is that information is centralised, allowing employees across the organisation to access information as needed in no time. These systems also provide insights over who is responsible for what, facilitating better contract performance. Legal can also set alerts for renewal dates and enable electronic signatures so that no time is lost during contract approval and no key dates are overlooked.
Myth 4: Accessing my contracts will take me more time
How much time does it take you to find a contract in your filing cabinet or print a contract every time a new version is drafted? And that is assuming you know where the contract is!
When your contracts are stored in a single repository, you can find them quickly, often by running a search. When you know where your contracts are, you can dramatically cut down the time it take for you (and your colleagues!) to find and track contracts.
Myth 5: I will lose control over my contracts
You may think that managing your contracts in a shared platform means you will lose control, but that couldn’t be further from the truth. Cloud-based contract management software actually increases the control you have over your contracts because it standardises processes. Not only are contracts are stored in structure ways, but you can define workflows and communicate clearly who is responsible for which contracts. This leads to more accountability and reduces risk.
Want to gain better control over contract management processes but not sure where to begin? In our latest whitepaper, we explore 5 scenarios of inefficient contract management and how legal technology can you take control and mitigate risks. Get your free copy here.