Contract Review Software Manage Contracts Faster

Contract review software takes the hassle out of managing agreements. It helps you stay organized, reduce risks, and handle contracts with ease as your business grows.

Overview

Challenges

Benefits

Role of AI

Features

Implementation

Best Practices

What is Contract Review Software?

It is a tool designed to assist businesses in analysing and reviewing contracts quickly and accurately. It helps users identify important clause terms, negotiations, obligations, and identify potential risks without the need for manual intervention.

By automating the contract review process, it reduces the likelihood of errors and ensures compliance with legal and organizational standards.

Challenges in Reviewing Contracts

1) Complex Understanding of Legal Terms

Lawyers often write contracts using formal legal language and terms that can be hard to understand for someone without a legal background. Words like “indemnity, or “arbitration clauses” might confuse readers, making it difficult to grasp the exact meaning and implications of the document.

Misinterpreting or overlooking these terms can lead to agreements that don’t align with your business’s interests or even create potential liabilities. With help of AI users can easily summarize the clause and understand the terms.

2) Identifying Potential Risks

While reviewing a contract, it’s crucial to identify any risks that could negatively affect your business.

These risks may be hidden in the fine print, and it’s easy to overlook terms that may later lead to financial loss, liability, or legal consequences.

Carefully reading each clause is essential, but it’s time-consuming and requires keen attention to detail.

3) Negotiating Terms and Conditions

Contracts are rarely perfect for both parties upon initial drafting. Negotiating the terms to ensure they are fair, balanced, and aligned with your business goals can be a challenging process.

This requires strong negotiation skills, a clear understanding of the contract’s implications, and the ability to effectively communicate your concerns.

The challenge lies in striking a balance between advocating for your interests while maintaining a positive working relationship with the other party.

4) Managing Multiple Contracts Simultaneously

For businesses handling multiple contracts with clients, vendors, and partners, keeping track of every document can quickly become overwhelming.

Each contract has unique terms, renewal dates, obligations, and deadlines that need to be monitored.

Without a proper contract review and approvals in place, it’s easy to lose sight of critical details, miss deadlines, or overlook compliance issues, which could result in financial penalties or damaged relationships.

5) Ensuring Compliance and Legal Validity

Another major challenge is ensuring that the contract complies with all relevant laws and regulations, whether local, national, or international.

A contract must be legally valid to be enforceable. Overlooking this aspect can lead to serious legal consequences, including disputes or penalties.

Additionally, staying updated on changing legal requirements and incorporating them into contracts can be a daunting task, especially for those unfamiliar with regulatory complexities.

5 Benefits of Contract Review Software

1) Saves Time by Speeding Up Contract Reviews

Contract review software eliminate manual processes, allowing you to review and finalize contracts faster.

By automating repetitive tasks like clause matching and formatting, it ensures that time-consuming steps are completed within minutes instead of hours

Misinterpreting or overlooking these terms may lead to agreements that don’t align with your business’s interests or could create potential liabilities

2) Reduces Risks with Automated Issue Detection

Contract tracking software identifies issues such as unclear terms, non-compliance, or unfavourable clauses.

By flagging these risks early, it helps businesses avoid costly disputes and ensures that every contract aligns with legal and business standards.

This proactive approach minimizes errors and boosts confidence in the agreement.

3) Keeps Contracts Organized and Easy to Track

With all contracts stored in a centralized location, you can access, search, and manage them effortlessly.

The contract tracking software provides features like version control, contract expiry reminders, deadlines, and status updates, ensuring nothing slips through the cracks. Staying organized improves visibility and simplifies audits or reviews when needed.

4) Improves Accuracy with Compliance Checks

Compliance is crucial in contracts, and the software ensures you meet legal and regulatory requirements.

It checks for standardized language, spots non-compliant terms, and provides suggestions to align contracts with your organization’s policies. This accuracy reduces the chances of oversight and builds trust in your agreements.

5) Streamlines Workflows for Better Efficiency

By automating tasks such as notifications, approvals, and contract renewals, the software optimizes workflows across teams.

This ensures a smooth collaboration between departments, saving time and effort while improving overall productivity. With fewer bottlenecks, your business can focus on growth.

How AI Helps Assist Managing Contracts

1) Summarize Clause with help of AI

AI-powered contract review software automatically generates concise summaries for each clause in a contract. This helps users quickly understand key terms and provisions without needing to read the entire document in detail.

The summary can highlight important points, such as payment terms, liability clauses, or termination conditions, streamlining the review process.

2) Updated Clause Templates

AI can analyse historical contracts and legal standards to provide up-to-date clause templates. It helps businesses ensure their contracts reflect current legal trends and regulations.

The software can suggest new clauses or modifications based on evolving laws, ensuring contracts remain compliant and up-to-date.

3) Get Alternative Clauses

It enhances contract flexibility by suggesting alternative clauses. It can recommend different wording or structures based on industry best practices, previous contracts, or specific user preferences. This saves time and ensures that the contract language aligns with the organization’s legal and business needs.

4) Summarize the Clause

With help of AI users can summarize the clause and can focus on specific clauses and generate a brief, easy-to-read version.

This enables contract reviewers to quickly assess a clause’s key elements, such as terms, conditions, and risks, helping expedite the review process without losing important details.

5) Get Detailed Obligations

AI-powered contract tracking software can extract key obligations from each clause, highlighting the rights and responsibilities of each party.

It also provides important details such as start and end dates, specific roles and responsibilities, and the amount of workforce involved in fulfilling those obligations.

This ensures that all parties are clear on their commitments and deadlines, helping track progress and minimizing the risk of non-compliance or oversight.

6) Identifying Risks

Contract risk management software automatically spots potential risks in contracts, like unfavourable terms, clauses that might cause disputes, or non-compliance with rules.

By pointing out these issues, it helps legal teams address them before they become problems.

7) Comparing Contract Versions

AI-enhanced contract review software compares different versions of a contract, highlighting changes, inconsistencies, or deviations from the original template. This makes it easier to track revisions and ensure all agreed-upon changes are made correctly.

8) Understanding Context of clauses

The contract risk management software not only understands the full meaning behind contract clauses but also identifies potential risks and ensures compliance.

It proactively detects unclear terms, aligns language with business goals and legal requirements, and mitigates contract-related risks, improving both accuracy and compliance.

9) Analysing Contracts

It reviews large volumes of contracts and identifies patterns or trends that may not be immediately obvious.

This helps businesses improve their contract management process, make terms more favourable, and gain a deeper understanding of their overall contract portfolio, allowing for better decision-making and strategic planning.

10) Supporting Negotiations

It provides helpful insights from previous contracts, compares industry standards, and predicts how certain clauses might impact the business.

This helps legal and business teams negotiate better deals and make more informed decisions.

Features of Contract Review Software

When working with contracts, it’s important to keep sensitive information safe by using secure software.

A contract tracking software to review and manage contracts should use strong encryption, store data safely, and follow privacy rules.

This software meets top security standards like GCC and US data policies, and the admin will have full control over the data.

1) Easy to use

A smooth and intuitive interface is essential to ensure that team members of all technical backgrounds can efficiently use the software.

It should allow users to easily navigate through documents, track progress, and make edits without requiring extensive training.

A user-friendly design enhances productivity and reduces the learning curve.

2) Integration with Existing Systems

Your contract review software seamlessly integrates out of the box with Outlook and MS Teams.

This compatibility allows for smooth workflows, eliminates manual data entry, and ensures that contract management aligns with other business processes, improving overall efficiency and collaboration across teams.

3) AI-Powered Analysis

An effective contract review software that uses machine learning to analyse contracts quickly and accurately.

The AI can identify key clauses, identify potential risks, and suggest improvements. This technology streamlines the review process, reduces human error, and helps ensure compliance with legal standards.

4) Multilevel Approvals

Contract approval processes often involve multiple departments or decision-makers.

Contract review software with multilevel approval features allows for customized workflows, ensuring that each contract is reviewed and approved by the relevant individuals or teams before being finalized. This feature ensures smoother communication and faster contract execution.

5) Audit Trails

Audit trails are crucial for maintaining transparency and tracking the history of any changes made to a contract.

A contract risk management software provides a detailed record of edits, approvals, and comments.

This feature is vital for compliance purposes and can serve as a reference in case of disputes or future reviews.

6) Digital Signatures

It is essential for legally binding contracts in today’s digital environment. The tool should support secure e-signature functionality, making it easier for parties to sign agreements electronically, regardless of location.

This eliminates the need for physical paperwork and speeds up the contract finalization process.

Implementing Contract Tracking Software in Your Organization

Whether you’re a small business or a large enterprise, the process of adopting a right solution must be done thoughtfully to maximize its potential and enhance overall productivity.

1) Understanding the Need for Contract Review Software

Before doing implementation, it’s essential to understand the value that the contract tracking software brings to your business:

Centralized Data: Traditional methods often result in scattered contracts and missed renewal deadlines. With contract review software, all contracts are stored in a central repository, making them easily accessible and traceable.

Enhanced Compliance: Many businesses face compliance risks because of missed deadlines, expired contracts, or overlooked clauses. This software automates tracking, reducing human error and ensuring that all parties remain compliant with legal and regulatory requirements.

Risk Mitigation: The software tracks critical dates such as renewal and termination, helping you avoid legal disputes or missed opportunities caused by outdated terms.

2) Assessing Your Organization's Needs

Different organizations have varying needs depending on the size of their legal team, the volume of contracts they manage, and the types of contracts involved.

Volume of Contracts: How many contracts does your organization manage annually? The more contracts you deal with, the more complex your tracking system needs to be.

Stakeholder Involvement: Who will use the software? Different stakeholders (legal teams, procurement, finance, etc.) might have different requirements. It’s important to evaluate the needs of all parties involved in contract lifecycle management.

Specific Features: Does your organization require additional features like automated reminders, integration with other business systems.

3) Choosing the Right Software for Contract Management

There are numerous contract tracking software available, but selecting the right one is crucial for successful implementation. Here’s what to consider when choosing.

Ease of Use: Ensure the software has an intuitive interface that is easy for users at all levels to navigate. You don’t want the software to add complexity to the contract management process.

Customization: Your contract tracking needs might differ depending on your industry or the type of contracts you manage (e.g., service agreements, vendor contracts, etc.). Opt for software that allows for customization to fit your specific requirements.

Pricing: When selecting the best contract review software, it’s important to ensure that the software offers an efficient workflow while maintaining affordable pricing plans.

4) Establishing a Clear Implementation Plan

Define the Goals and Objectives: Clearly outline what you hope to achieve with the contract review software.
Goals could include reducing legal risks, automating reminders, streamlining contract approval processes, or improving team collaboration.

Appoint an Implementation Team: Create a cross-functional team to oversee the software implementation.
This team should include legal, IT, and procurement stakeholders who will be responsible for coordinating the project and troubleshooting potential issues.

5) Employee Training and Adoption

As the software is easy to use and navigate into the options, there are some considerations.

User Roles and Permissions: Define user roles within the software, ensuring each person has the appropriate level of access based on their responsibilities.

Hands-On Training: Offer interactive, hands-on training for employees. This can include live demonstrations, walkthroughs of the software, and practice scenarios to help employees feel comfortable using the system.

Best Practices for Reviewing Contracts Effectively

1) Highlight Key Dates and Deadlines

Contracts are often filled with important dates, like when payments are due or when the contract needs to be renewed.

To stay on top of things, highlight these key dates so you don’t miss anything important.

This makes it easier to stay organized and ensures you never overlook crucial timelines.

2) Understand the Language and Terms

Legal jargon can be challenging at the initial phase of handling the contracts, but it’s crucial to understand the meaning behind the terms. Ask for clarification.

You might even consider getting the help of a legal expert to break down the complex terms. Understanding the contract fully gives you the confidence to move forward.

3) Centralize All Contracts in One System

One of the key best practices for managing partner contracts is to centralize all contract documents in a single, secure system.

By leveraging contract tracking software, businesses can store all contracts in one centralized location, making them easy to access and review whenever necessary.

This approach reduces the risk of misplaced contracts and ensures that the team can quickly retrieve the most current versions when needed.

Centralization not only saves time but also provides greater visibility into contract statuses, renewal dates, and obligations.

4) Establish Clear Review Processes and Workflows

Setting up a streamlined contract review process is essential for ensuring that no important details are missed.

With the help of contract tracking software, businesses can create predefined workflows that guide team members through each stage of the contract review process.

This could involve reviewing the terms, confirming compliance with legal standards, and involving key stakeholders like finance or operations teams.

Automated reminders and task assignments help ensure deadlines are met and contracts are thoroughly vetted before final approval.

5) Incorporate Automated Alerts for Key Dates

Managing key dates such as contract renewals, deadlines, or payment terms is critical in contract management.

Contract tracking software can automate alerts and reminders for these important milestones, ensuring that your team stays on top of critical dates without manual intervention.

By staying ahead of important dates, businesses can make timely decisions on renewals, renegotiations, or terminations, ensuring smooth partnerships with vendors.

6) Ensure Collaborative Review with Stakeholders

Effective contract management often requires input from multiple departments. Whether it’s legal, procurement, or finance, collaboration is essential during the contract review process.

Using contract tracking software that allows multiple stakeholders to provide input directly within the document can help streamline this process.

Collaborative features such as comment tracking, version control, and real-time feedback ensure that everyone involved has the chance to review and approve contract terms before finalizing agreements.

7) Focus on Consistency and Compliance

Consistency in contract terms and compliance with regulatory requirements is a cornerstone of effective contract management.

When reviewing contracts with a robust system business should ensure that the terms are consistent with company policies and any relevant regulations.

This includes checking for standard clauses, penalties, performance metrics, and termination conditions.

Regular audits, facilitated by the software, can help identify any discrepancies or areas where compliance might be at risk, ensuring long-term business success.

Manage Contracts Effortlessly with CLM 365

When choosing a software to review contracts, selecting the right system can significantly improve the workflow of your business.

CLM 365 is a Microsoft-certified app that helps for managing contracts, mobile responsiveness, and integration of Microsoft 365, Outlook, and SharePoint, where businesses could connect easily with their existing system.

When it comes to contracts, it’s not just about managing or reviewing them it’s about leveraging vendor relationships to drive business growth.

This becomes possible with CLM 365, which empowers organizations to streamline contract lifecycle management and unlock the full potential of their partnerships.

Conclusion

By implementing the SharePoint contract management, businesses can streamline their process, ensure compliance, and reduce risks associated with contract management.

Ready to simplify your contract handling process. Schedule a free demo our experts is ready to guide you.

Frequently Asked Questions

Why is contract review software important?

Contract review software improves the efficiency and accuracy of contract management, reduces human errors, saves time, minimizes risks, and ensures compliance with legal standards.

How does AI assist in risk management within contracts?

Contract review software helps manage contract risks by quickly analysing large volumes of agreements, identifying potential financial, legal, or compliance risks.

It identifies problematic clauses, compares terms with historical data, and ensures compliance with regulations.

This allows businesses to proactively address risks before they escalate, reducing costly disputes and improving contract security.