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Managing contracts accurately is one of the biggest challenges for the modern lawyer and CLM is a key technology to achieve this. It's not just about creation or tracking deadlines; contracts cut across multiple areas, involve dozens of tasks, and each requires a great deal of precision, organisation and time. But what happens when contracts get lost in emails, key dates are forgotten or manual processes lead to errors? The consequences can be costly, both in legal and financial terms.
This is where CLM (Contract Lifecycle Management) comes in, a tool designed to automate and optimise each of these multiple tasks involved in contract management. However, although CLM greatly facilitates this work, it is still essential to know the tips that enhance its effectiveness and the most common mistakes you should avoid when using it.
In this article, we explore five common successes and five common mistakes in contract management, with practical examples to help you recognise and improve your processes. If you are looking to make contract management a strategic pillar of your business, this article is for you!
This article is also available in Spanish.
In this article you will find:
- 5 wins in contract management with CLM
- 5 most common mistakes in contract management
- How to avoid mistakes and boost success with CLM
- Improve your contract management with state-of-the-art CLM
5 wins in contract management with CLM
Hit 1: Automating the creation of contracts
Case study: A logistics company generates recurring contracts with multiple suppliers.
Practical example: thanks to CLM, the company uses pre-approved templates to automatically generate contracts with customisable standard clauses. This reduces creation time by 40% and eliminates common errors resulting from copying and pasting terms or manual drafting.
Why it works: In addition to cutting time, automation ensures that contracts are consistent and comply with internal policies, allowing the legal team to focus on higher-value tasks.
Hit 2: Centralising contracts on a single platform
Case study: A consulting firm with contracts scattered in emails and physical folders.
Practical example: by implementing a CLM, the firm now has all its contracts digitised and accessible from a central platform. This allows them to find documents in seconds and share them securely with remote teams.
Why it works: Centralisation not only improves efficiency but also ensures full control over documents, preventing security breaches, loss or duplication.
Hit 3: Proactive management of key deadlines
Case study: A legal department forgetting important renewals, missing key renegotiation opportunities.
Practical example: with a CLM, the company receives automatic notifications before contracts expire. This allows a lease contract to be renegotiated in time, saving 15% in annual costs.
Why it works: Automated alerts prevent unwanted renewals and ensure that companies remain in control of their commitments.
You may be interested in: Contract automation with CLM: benefits and challenges for companies
Hit 4: Efficient cross-team collaboration
Case study: Commercial and legal teams were working in isolation, leading to delays in key contract approvals.
Practical example: A CLM enabled both teams to collaborate in real-time on a contract, reducing review time from weeks to days.
Why it works: Collaboration on a shared platform improves communication and speeds workflow at critical contract steps, avoiding errors due to misalignment.
Hit 5: Ensured regulatory compliance
Case study: A multinational was handling contracts that were in breach of local regulations, exposing it to severe penalties.
Practical example: With a CLM, the company set up templates tailored to each region, ensuring that all contracts comply with regulations such as GDPR.
Why it works: Standardisation and automatic validation of clauses minimise legal risks and protect the company's reputation.
5 most common mistakes in contract management
Mistake 1: Lack of organisation and accessibility of contracts
Case study: A manufacturing company lost an important contract because it could not find it in time.
Consequence: Contracts stored in local folders and emails delayed an audit, causing regulatory sanctions.
The solution to the problem: Centralising all contracts in a CLM ensures quick and organised access.
Mistake 2: Missing critical deadlines
Case study: A technology company with a multitude of open fronts and a legal department stretched by tasks and deadlines.
Consequence: Without automated alerts, a key contract expired and the client opted for a competitor.
The solution to the problem: Expiry alerts integrated into a CLM are essential to avoid commercial losses.
Mistake 3: Manual processes leading to errors
Case study: A legal team manually copied an erroneous clause into a high-profile contract.
Consequence: The poorly drafted clause allowed the customer to cancel the contract without penalty, causing significant financial loss.
The solution to the problem: Automating the creation of contracts with automated templates in a CLM minimises human errors that can be critical.
Mistake 4: Lack of communication between departments
Case study: A sales team sent a contract to a client without review by legal.
Consequence: This resulted in unfavourable terms that affected the profitability of the deal.
The solution to the problem: A CLM facilitates and centralises cross-departmental collaboration, facilitating validation by Legal and ensuring that all parties review contracts before they are sent.
You may be interested in: Learn about the advantages of a legal request module.
Mistake 5: Lack of strategic analysis in contract management
Case study: An energy company had no data on the performance of its contracts.
Consequence: This prevented it from renegotiating more favourable terms with a key supplier, missing out on optimisation opportunities.
The solution to the problem: CLM dashboards and reports enable data-driven decision-making, maximising the value of each contract.
How to avoid mistakes and boost success with CLM
1. Customise workflows according to your team's needs
Every organisation has unique processes and a CLM allows you to tailor workflows to suit the specifics of each business and industry. In that sense, you can set up specific approvals for different types of contracts or roles within your company.
Practical tip: define clear stages within the contract lifecycle (creation, review, approval, signature and follow-up) and assign responsible parties to each one. This ensures that contracts do not get stuck at any stage.
2. Implement role-based access controls
Security and privacy are essential in contract management. A CLM allows you to set permissions so that each user can access only the information they need.
Practical tip: create user profiles according to departments (legal, commercial, financial) and define which sections of the contract they can view, edit or approve. This not only protects confidential information but also reduces the risk of errors due to improper access.
Alt text: A smiling lawyer in a suit talks on the phone in a glassed-in office. Bigle CLM article on contract management.
3. Set up key metrics to assess contract performance
Data analytics is one of the biggest advantages of CLM. Beyond managing contracts, use the collected data to measure the impact of Legal on the business.
Practical tip: establish metrics such as average contract closing time, percentage of successful renewals or cost per breach. These indicators will help you identify areas for improvement and demonstrate the value of the legal department.
You may be interested in: Legaltech: how to lead your legal department's transformation
4. Use integrations with other business tools
A CLM is most powerful when it connects with existing systems, such as CRM, ERP or databases. This enables a global view of how contracts impact other areas of the business.
Practical tip: integrate the CLM with your CRM to automatically synchronise customer data in contracts. For example, terms negotiated in sales will be reflected directly in contracts, reducing duplication of work.
5. Conduct regular system and contract audits
The success of CLM does not end with its implementation; it requires continuous monitoring to ensure that it continues to meet its objectives.
Practical tip: schedule regular reviews to analyse how CLM functionality is being used and verify that contracts comply with internal policies and external regulations. This helps to keep the system up to date and optimised.
Improve your contract management with state-of-the-art CLM
Efficient contract management is not just a competitive advantage, it's a necessity. Successful automation, organisation and compliance with a CLM make the difference between strategic management and costly mistakes that can damage your company's reputation and bottom line.
With a CLM, you can transform your contract management, avoid common mistakes and get the most out of every contract. Are you ready to take your contract management to the next level? The future is just a click away!
