5 Legal Contract Management Traps You Should Be Aware Of
There are several traps we are occasionally in the danger of falling into as customers, employees, companies, etc. while dealing with legal contracts. We have to be careful at all times to avoid these legal contract management system risks as they are not always visible at first. The quality of the services offered by our contract managers goes a long way in telling how satisfied we will be at the end of the day.
Legal contract management is a process that helps organize the flow of contracts between individuals or companies and their clients and partners. Whoever takes up the role of contract creation, authorization, negotiation, and every other part of the process is called a contract manager, and there are so many risks involved with dealing with them. Contract management is an essential process for any organization, yet it can be easy to make mistakes when drafting and managing contracts.
One key area where things can go wrong is in ensuring that all of the terms of the agreement are properly carried out. This includes tasks such as making sure that products are delivered on time and as promised, or that invoices are issued and paid in a timely manner. If any part of the contract is not followed through on, it can lead to disputes between the two parties which can be costly and time-consuming to resolve.
The 5 legal contract management traps
Yes, every venture is a potential risk that we take. But this does not mean we shouldn’t be careful with every contract we append our signatures on. We do not want to do something that affects our businesses in the long run. It is always better to be very careful than to be sorry. Below, we have provided you with a well-detailed list of the five main contract management traps which you should always avoid.
Trap 1: Remote work opportunities
A legal contract management system should provide businesses with remote work options. Remote work options have always been important to businesses, but the 2020 Covid-19 pandemic has made it more vital than ever. Employees have been required to work from home, and companies without remote work options have been crippled.
Contract management software for legal departments allows lawyers to generate, sign, send and receive contracts from remote locations. By implementing a legal contract management software, a legal system does not only become more efficient, but it also becomes protected from unforeseen circumstances. As a legal client, you should always ensure that any legal contract manager you deal with is well equipped to work remotely.
Trap 2: Slow business process
The rate at which you will be able to negotiate and strike business deals greatly depends on how efficient your post-signature contract management process is. When your contract manager takes too much time to prepare and deliver important documents, it will slow down your business process.
Your contract manager should be able to provide error-free contracts and also keep your documents safe at all times. Being serviced by an inadequate legal contract management system puts your business in lots of disadvantages. You will often find yourself missing important opportunities. Your business will be less profitable too.
Trap 3: Wet signatures
A wet signature is a signature appended by a pen on paper. It is the method of contract signing associated with paper-based contracts. The paper-based contract system is outdated, insufficient, and insecure. Since wet signatures are done manually, the process is usually prolonged.
Electronic signatures, on the other hand, streamline the paperwork process. Electronic documents have a much shorter turnaround time, and they can be exchanged in matter minutes. They also cost less and are easier to manage. Electronic documents are also much safer and secure compared to wet signatures.
Trap 4: Offline Tracking
There are several risks involved with the offline tracking of contracts. Offline tracking means that you have to track your documents manually. You can imagine how this slows down the conclusion of business or contract. The documents, in most cases, are neither handled nor stored appropriately, which makes tracking more difficult.
Without an automated solution, there is no transparency in the management of the legal contract. You can’t exactly hold anyone accountable for mismanaging the documents at any time. The organization of documents may be inefficient. So much so that no one may know the exact location or status of a particular document that’s urgently needed. Frantic searches are not uncommon when tracking documents manually.
Offline tracking causes a lot of discrepancies that result in delays and inevitably makes legal contract management slow and unpredictable.
Trap 5: Lack Of Comprehensive Supervision
Without the adequate supervision of the whole legal contract management process, you leave your business susceptible to traps. Comprehensive supervision is essential throughout the lifecycle of any contract, from contract creation down to the conclusion.
Supervising paper-based contracts is very laborious. Even with the best organization and efforts, it is inefficient at best, time-consuming. This is because the full history of a paper-based contract is not easily accessible. However, with reliable software, you will be able to track the full history of your contracts easily. This makes supervision much more reliable, faster, and more effective.
While these contract management traps may seem daunting to avoid, they can all be avoided by shifting from a paper-based contract management system to an automated contract management system. When you work with a legal contract management software, your business will become transformed. Your contract manager will be able to deliver premium contract services from remote locations. A legal contract management software will also boost the efficiency of your business and save you lots of money. There is no losing with legal contract management solutions.