In a post on 25th January 2021, we looked at some issues concerning contract management, and why this is an increasingly important area for lawyers and legal departments.  However, on a practical level it is easier to say that a law firm or business should invest in contract management tools than for them to actually do it.
A recent report compiled by American-Dutch information services company, Wolters Kluwer and the European Company Lawyers Association entitled ‘Legal Departments in a Digital Era’  provided some interesting findings. The report is an analysis on the ‘digital maturity’ of law firms in five European countries: Germany, France, Belgium, Spain, and the Netherlands. Some of the findings include:
· although 67% of respondents claimed to have a digital strategy, only around 33% of those had a plan in place.
· of the 67% of legal firms with a strategy, only one-third of those had an established budget.
· implementation success rate in legal departments is still very low.
Most commercial lawyers understand the importance of contract management throughout the contract lifecyle from negotiation to full performance of the contract, and often beyond. Given that there are many, many options for such tools as contract management software now available , what is the problem?
There are several. Given that law firms, and businesses, exist to make profit, managing costs – including expenditure on software – is always a key issue. There are always other things competing for a firm’s investment and hard, practical financial decisions must be made. Those in control of a firm’s budget need to be persuaded, and confident, that spending money on contract management software is a sound investment.
Another issue is that firms who do understand the importance of adding contract management software sometimes choose a product that is unsuitable for their needs. There are many different options available, but the needs of every company and firm are different, too. If you can identify challenges and ‘pain points’ relating to contract management within the firm, you can make a much more informed choice about the precise contract management software that the firm needs. Some of the potential pain points include, for example:
· contractual deadlines are being missed, leading to wasted financial costs
· deals are being signed off too slowly, possibly leading to contracts being lost
· slow response times to requests for information about the contract
All of these issues can, and often will, have a negative effect on the value and benefit of contracts. Understanding the types of issues that may arise in any particular firm – and which may be a particular problem – should be identified. This will not only help in relation to persuading budget controllers that investment in contract management tools is effective and efficient, but it will also help when it comes to choosing appropriate contract management software for the firm.
In theory, the decision for a firm to invest in suitable contract management software should be an easy one. According to the International Association for Contract and Commercial Management (IACCM), inefficient contract management can lead to loss of value and cost businesses as much as 9% of annual revenue. If implemented appropriately, contract management tools should not only reduce these kinds of losses, but also free up time and space to focus on other revenue-generating projects.
 Here is a website which explores and reviews just some of the many available contract management software options: https://www.capterra.com/contract-management-software/
One way of managing contracts is to use contract management tools, such as contract management software.