State-of-the-art technology to prevent revenue leakage”

Contracts are part of the daily lives of millions of professionals in all types of companies and sectors. They fuel business decisions, facilitate agreements and enable the corporate strategy to move forward, but we don’t realise how much time and resources we waste working on them until we stop and think about it. Or until we look at the revenue leakage that outdated contract management represents each year for our company.

9% of annual sales. That’s what large companies lose due to inefficient contract management, according to experts such as World Commerce & Contracting. Legal operations have a high value for corporations, but 5-40% of that value is lost due to inefficient Contract Management.

All processes in companies are under scrutiny and tend to go digital to save costs and streamline performance, but the way contracts work remains paradoxically outdated. Drafting a legal document from a decentralised Word template, adding paragraphs based on what clients reply to by email, applying changes manually, signing documents by hand… not to mention traveling to sign the documents! Too much wasted time and an open door to errors and legal risks.

This lack of efficiency in legal operations translates into millions of dollars in losses that directly affect the financial department.

Ensuring ROI (return on investment) through legal tech

Fortunately, technology has much to contribute in this respect. Contract Lifecycle Management (CLM) software covers the entire contract lifecycle from start to finish; serves to secure and streamline each step of contract creation and allows legal teams to monitor each step.

This solution starts with the legal department, helping to make their work routine more efficient and convenient at all stages of the document process. It means saying goodbye to an inbox with hundreds of contracts to review, but its potential goes far beyond the legal sphere. All types of departments and sectors benefit from this software. Human resources, finance, sales, operations, procurement…

The benefits of CLM will depend on the needs of the company, the more contracts, the higher the benefits. But that’s not all. In addition to contract volume, the more complicated the company’s contracts or processes are, the better a CLM works, as it is a tool that has no limits when it comes to automating contracts.

On a practical level, the CLM is a solution for all professionals working with contracts and assists in the whole contracting process, which offers automated legal document creation, collaboration and negotiation, electronic signature and secure cloud storage. At a strategic level, it is a software to boost the operations of any company and save a large amount of money annually.

Investing in the present and the future

The Corporate Legal Operations Consortium (CLOC) indicates that the automation of legal processes and the implementation of new technology solutions is a priority for almost 60% of in-house lawyers in companies that invest in technology.

This is good news for the legal tech sector but also for corporations themselves. Lost profits occur when contract processes are slow and inefficient as a matter of course, so companies need to stop and look at how they are managing contracts, to improve them and avoid losses that can run into the millions.

The lack of structured and efficient legal operations not only results in a mailbox with hundreds of contracts for the legal department to review, but also directly affects a company’s return on investment. Otherwise, corporations that establish a measurement of these processes through the use of KPIs will be able to fix what is inefficient, maximize what works and prepare for a better competitive position in their market.