Using Contract Management Software to Limit Legal Liabilities

Corporate legal departments are inundated with contracts, with large companies commonly managing tens of thousands of contracts simultaneously, according to The need for timely creation, revision, and completion must be balanced with the necessity for accuracy and thoroughness. Faced with these challenges, the enormity of the contract load can easily weigh down legal departments.

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So it comes as little surprise that legal teams are usually staunch supporters of the use of contract management software, which can automate much of the legal work associated with contracts.

As Law Technology News puts it, “Contract management software promises to help attorneys gain the upper hand on contract creation, storage, organization, and related tasks by providing tools designed to streamline routine processes.”

But utilizing contract management software isn’t just about making life easier for the legal team. A quality contract management software system will facilitate valuable integration of legal with other business units involved in the contracting process, as well as provide safeguards to ensure proper, consistent legal language and the inclusion of all necessary provisions.

Using Predetermined Templates with Simplified Language

One of the most-significant benefits of contract management software is that it makes it easy to implement standard-language templates (with preapproved alternate language options). With the capability to carefully craft electronic templates, rather than reinventing the wheel for each contract, the legal team can focus on simplifying the language to remove “legalese” and make the contracts more understandable to both employees and customers.

With a standard library of contract templates and legal clauses, it’s easier to educate employees on the meaning of specific terms and their uses – leading to increased employee buy-in and helping company representatives in their contract negotiations with customers.

As contract templates and clauses are standardized, it’s important that they be developed with input from stakeholders throughout the organization, so that all departments will be on the same page in terms of contract management strategy. This inclusive approach facilitates a balance between risk mitigation and business objectives.

Reevaluating as Part of the Process

To gain the maximum advantage from contract management software, companies need to constantly reassess their standardized language. Changing circumstances, business objectives, and other factors can lead to certain language being frequently revised. When this happens, the template or preapproved clause in question has lost its effectiveness.

Companies should make it a part of their overall contract management system to quickly adapt standardized language to create new “starting-point” documents and clauses.

Getting Contracts Where They Need To Go

One of the most troubling problems of traditional, paper-based handling of contracts is inconsistency in how and when the legal department becomes involved. This makes managing workflow a nightmare for the legal department and eventually contributes to mistakes and delays.

An efficient contract management software solution will have pre-established and automatically enforced guidelines for when contracts should go to legal, as well as for the specific legal team members to whom they should be routed, depending on factors such as contract type, customer type, and contract stage.

This routing control allows relatively simple, low-value, low-risk contracts to be assigned to non-attorney staff, allowing attorneys to spend their valuable time on the most high-value, high-risk contracts.


The use of contract management software to automatically route documents to the appropriate people and to standardize legal language in easily accessible, up-to-date, and compliant digital formats will result in reduced negotiation cycles and less demand on the legal department’s resources due to lowered demand for attorney intervention. Ultimately, these benefits translate into higher productivity- and increased profitability- for the entire legal team and company.