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Businesses need to find and maintain ways of being better and faster in order to maintain competitive advantage.
But Legal isn't always given a seat at the table of innovation. While more is expected of the department, Legal is still needs to be on the ball of risk mitigation and protecting the company from worst case scenarios. And while they are expected to be, they aren't often given the chance to be strategic partners when it comes to innovation in business.
There are several ways that Legal can become a department of the future and innovate in their business capacity. One way to do that is with automated contracts.
Traditional contract processes are typically heavily manual and linear. They are often drafted one by one, regardless of whether or not the agreement is personalized or standardized. Even more, the contracting processes is often bottlenecked because one contract must be completed before another one is begun. By implementing software to automate contract creation and presentation, in-house counsel can begin to streamline the process that slows them down significantly and make it more efficient.
The traditional process for standardized agreements has little place in the legal departments of innovative companies. Embracing contract automation can allow greater efficiency, put more time back in Legal's day to innovate, and give Legal the control they need over their own agreements.
Before we dive into the 3 reasons contract automation is a key competitive advantage in enterprise, let's discuss why your contract lifecycle management (CLM) tool isn't enough.
While CLM systems maybe have been innovative years back, today they do not offer much reprieve to the cost - both money and time - of contracts. According to IACCM, the average cost of contracts has increased 38% in the last 6 years.
The linear process that CLM systems require presents roadblocks and demands for time through steps that may be unnecessary. If you have to have every agreement reviewed by legal as part of a workflow, and legal is bogged down, now, so is your deal. It doesn’t make sense to have a “one size fits all” process for high touch, personalized, high value contracts AND low touch, standard, high volume contracts.
A CLM solution also presents the contract as if it’s meant to be negotiated, and that can increase time to sign. It also doesn’t work for signing with people who are on the go and need to be met wherever they are.
Related: The Acceptance Mindset
By abandoning the traditional contracting process, Legal can take an active role in building a modern enterprise set apart from its competitors in its ability to move fast and pivot with constant changes.
Here are three ways that contract automation is a key competitive advantage in enterprise:
In a world that values and implements solutions to enable speed, traditional contracting is too slow to pass muster.
The process of completing traditional contracting workflows is time-intensive and expensive. Constant redlining of contracts that are supposed to be standard in your business prevents you from capitalizing on potential efficiencies.
Many PactSafe customers have found success with shifting their mindset from signing contracts to accepting them. By standardizing contracts and using clickwrap and modern eSignatures as an acceptance mechanism, you eliminate the time suck of linear contract methods. Those extra hours means more contracts can be processed, and that means a better run enterprise.
When you work more efficiently, you enable your teams to focus more of their time on their core competency, which strengthens your overall enterprise.
For your sales team, eliminating redlining in contracts lets them focus on closing more business. With less need to wait around for new clients to redline contracts and submit to the back and forth of terms negotiations, sales can increase their velocity and bring in more revenue for the business.
For legal, this means putting more hours back in your day. While standardizing certain sales agreements would be a lift on the front end, in the long run it means that legal doesn’t need to be involved with every individual contract. This will be good news for the sales team who will no longer have to wait for legal to approve their contracts, and for legal teams who are afraid of rogue salespeople sending out the wrong version of a contract.
A fully automated contract system enabled by clickwrap should mean that Legal sets the terms of engagement for the contracting process. They can handle all changes themselves without waiting on Sales to initiate edits to the contracts or Product to implement them.
In giving Legal full control over that system, you’re allowing Legal to be the best version of itself.
Keeping all steps of contracting in the hands of the Legal team effectively reduces a company’s risk profile. By giving Legal control of their own affairs, the business will become more efficient and able to mitigate risks. Additionally, Legal can become more strategic in the way it drafts and presents contracts, therefore putting the business at a greater advantage the market.
Automated contracts can sound intimidating. But what they can do for your enterprise makes them more than worth it. All in all, automated contracts make you more efficient, more precise by giving Legal full control over the process, and more secure. Quite simply, by automating your contracts, you can set yourself apart from your competition.
For more on how contracts can help you business improve efficiencies and save money, check out our eBook, How Contracts Are the Key to Unlocking Revenue Recovery.