What Types of Contract Approval Software Are Available?
Corporate legal departments are increasingly implementing contract approval software to mitigate risk and improve inefficient processes. However, it can be difficult to choose the right product without knowing what’s on the market. The following guide breaks down five types of contract software and outlines the benefits of each.
Poor contract management leads to limited visibility, inflated costs, diminished negotiation leverage, missed revenue opportunities, and poor compliance. Shared across corporate legal departments is the need for fast, affordable, and scalable contract optimization. Today, technology has finally caught up with demand. Consider the following five software options when innovating your legal department.
#1 Contract Review and Redlining Software
Problem: The workload can be immense for attorneys tasked with providing oversight for all company contracts. Associates must cross-reference agreement clauses and provisions with the company playbook, clause library, standard terms, and latest updates.
Solution: Contract review software can compare a current draft to past agreements, a digital playbook, and specific parameters. Errors, omissions, and anomalies can be flagged and coded based on risk. The capabilities vary widely based on the complexity of the underlying software architecture. The best contract review software incorporates artificial intelligence (AI) and Natural Language Processing (NLP).
#2 AI Review and Negotiation Platform
Problem: Contract management software is essential to get organized, but it often doesn’t go far enough. Legal teams still have to perform heavy lifting by manually mining contracts for data to track compliance, deadlines, and performance. Many hours are dedicated to redlining, reviewing, negotiating, renegotiating, and waiting for the other party to sign.
Solution: An AI contract platform automates contract risk analysis, review, and negotiation, offering context-based revision suggestions that are 100% aligned with company standards.
Here’s how it works:
- An agreement is uploaded or emailed to the platform.
- Within minutes, the AI compares the draft to an AI Digital Playbook and past contracts to return a fully-redlined version with suggested changes.
- Contracts with minimal revisions can be auto-corrected based on set parameters, while heavily redlined contracts can be automatically escalated to senior attorneys.
- All dates and deadlines are saved with automated reminders to prevent missed obligations or opportunities.
- Leadership can tap into analytical data and reports to gain valuable insights into the state of affairs and make improvements where necessary.
Agreements have traditionally required days or even weeks for review and negotiation. An AI-powered contract negotiation solution allows legal departments to complete the review and negotiation process in minutes, leaving attorneys and legal staff free to concentrate on contract escalations, relationship management, and strategic, higher-level objectives.
#3 Contract Lifecycle Management (CLM) Software
Problem: Contracts can be confusing when multiple people contribute to the same document. Who has permission to access the document? Which version is the newest? Is the editing complete? How close is the contract to completion? Contracts can remain in limbo over such concerns, and multiple phone calls and emails between parties are often required.
Solution: CLM software provides workflow enhancement and reduces delays by automatically notifying the right people at the right time with alerts and reminders. Contract managers can see who is accessing a document in real-time and where hold-ups occur. Automated alerts can also help organizations meet key dates and milestones, including contract renewals.
#4 Contract Tracking Systems
Problem: Contracts must be tracked for alignment with the company’s financial goals, compliance abilities and obligations, security needs, and operational efficiency. Manual filing systems inevitably lead to lost contract versions, missed opportunities, poor routing, and slow approval times. These issues may fall under the radar until auditing time, where wasted time and bloated lifecycle bottlenecks become painfully apparent.
Solution: Contract tracking software, sometimes called contract management software, increases visibility from a centralized dashboard, improving access, collaboration, performance insights, and auditing trails. Contract managers can see contract-to-close rates at a glance.
Problem: Much time is lost obtaining signatures. Ink signatures are antiquated and slow, relying on the post, fax machines, or physical meetings to execute contracts. The direct and indirect costs of paper-based processes, time, and postage can be excessive when managing hundreds or thousands of contracts.
Solution: Electronic signature software is now widely accepted and legally binding. Simply incorporating e-signatures into the process reduces send-to-sign time by up to 20%. Not only does the process save time, but it enhances security while improving visibility.
LexCheck’s AI-powered contract review and negotiation platform offers the leading edge in contract approval software. To learn how LexCheck can automate your contract review and negotiation process, contact us at email@example.com. Request a demo to experience the technology first-hand.
Gary Sangha | Founder & CEO
Gary Sangha is the Founder and CEO LexCheck. He's a serial entrepreneur and an academic. Gary previously founded Intelligize, a legal technology company that was acquired by LexisNexis. He's affiliated with the University of Pennsylvania and Stanford University and started his career as an attorney at Shearman & Sterling and White & Case.