Best Practices for Digital Transformation in Legal Contracts

Corporate legal teams are accelerating their adoption of digital solutions to improve the lifecycle management of legal contracts.¹ And for good reason. 

As a cost centre with an increasingly strategic role, legal is faced with increased demand, shrinking budgets and an often-overextended workforce.² This makes improving the internal customer experience, addressing legal team management, reducing liability and contributing to profits key priorities. Applying digital transformation to legal contracts is the perfect opportunity to address these challenges and others. 

But how do you simplify a set of processes that can feel as complex as surgery and as tedious as a three-hour Zoom meeting? The good news is that improving legal contracts doesn’t require an all-or-nothing approach. You can take a phased approach based on identified priorities. 

Below is a high-level, 12-step process for eliminating contracting complexity; and for a deeper dive, including questions to ask during each step, read the eBook “Simplifying Legal Contract Management: A Step-by-Step Guide.”

1. Secure executive buy-in

Securing executive approval before you begin the project helps ensure you don’t waste time. Similarly, involving other departments allows you to build bridges across departments rather than create more siloed programmes. As you move forward with this step and the others, make sure you’re not operating on assumptions that you have the right people or know the answers to important questions. 

2. Assess what works and what doesn’t in your current contracting processes

The first step in streamlining the legal contract management process is looking at your existing approach and identifying the biggest gaps and pain points. As you go through the discovery process, it’s important to be transparent. Every answer should be visible to every participant, because each comment has the potential to generate additional points of view and ideas whenever someone sees it. 

3. Determine your priorities to create requirements

Before you begin steps 4 – 10, you need to identify why you want to change your current process and which items are most important. It’s also crucial to remember that the contracting process is part of every line of business, and you can’t do it all at once. You’ll be more successful—preserve your sanity—if you identify why you’re embarking on the project before you begin. 

4. Build a Centre of Excellence (COE)

While you can roll out improvements in your legal contracts and automate other digital processes without a COE, creating one will give you a blueprint for expanding the knowledge you glean from your first use case to other future initiatives and help ensure you get the most out of your technology. A COE is a centralised team within your organisation that manages your implementation roadmap, support model and enablement strategy and provides a way to share standards, best practices and training.

5. Create a central repository

One of the best ways to increase workflow efficiency is with a central repository—a single source of truth for all approved contracts and clauses, as well as all information for each customer and vendor. Centralising your contract storage is only the first step to creating a more efficient contract process. The most successful companies also add contract analytics capabilities to their repository.

6. Create a clause library and contracting playbook

A legal contract playbook is a great way to offer guardrails around self-service opportunities and standardisation among lawyers and contract managers. A lot of what you uncover in steps 1 – 4 will feed your playbook. However, you should view your playbook as a living document that you revisit and update as you discover new insights about your contracting process. 

7. Establish an automated intake process

The intake process is where legal departments often experience significant pain. It can also be one of the most inefficient areas within the contract management workflow. Not only are there multiple requests coming daily from across the company via manual processes,³ there’s no consistency in the information submitted, no filtering and no easy way to review what’s in the queue. 

8. Establish a negotiation workflow

It’s common for a contract to go through several rounds of revisions,⁴ with many different approvers, before being ready for signatures. In its current state, most contract negotiation requires legal review of every unique contract clause or material negotiation point. However, teams still experience errors, inconsistencies and risk. By examining the effectiveness of your current workflows, you can increase the efficiency gains made possible through technology. 

9. Establish a case management process

Case management is intricately tied to your playbook and intake process, and it can benefit greatly from automation. Maintaining version control during revisions is an important part of the process, and technology is the best way to do that. When evaluating options, make sure you can upload multiple versions of a document to the case file, lock final documents and integrate the solution with other internal systems. 

10. Develop metrics and reporting

Many legal teams are working to become more data driven, and one of the key advantages of modern contracting solutions is the rich insights and quantifiable metrics that you can glean from the data about your agreements. Developing a robust reporting structure also allows you to track lessons learned, which is an integral part of change management and improving the overall process. 

11. Invest in change management

Effective change management helps accelerate time to value and deployment speed when embarking on transformation. By tactically planning and allocating resources before beginning your deployment, you’re setting your organisation up for better outcomes and greater adoption. Considering change management techniques will ensure a successful transition to the contracting improvements your team implements. 

12. Define a scalable support model

Building an ongoing support framework guarantees users have a clear path to obtaining on-the-job product assistance, gives you a clear roadmap for what to do when a challenge arises and helps ensure your business stays up and running. 

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By taking a guided, measured approach, tapping the power of AI and leveraging lessons learned, legal can drive change across the enterprise. They can also pave the way for breakthrough innovations, solidifying their role as a proactive, strategic asset that helps the business sell more, hire and procure faster and stay compliant. 

¹ 93% of companies automatically capture at least some information into their systems of record (DocuSign System of Agreement Thought Leadership Study, Forrester Consulting, February 2021)

² 67% of companies say legal must draft and/or approve any changes to agreements (DocuSign System of Agreement Thought Leadership Study, Forrester Consulting, February 2021)

³ 47% of legal departments manage over 1,000 contracts per month, The State of Systems of Agreement, 2020)

⁴The State of Contract Management, 2020