Zycus recognized as a ‘Strong Performer’ in The Forrester Wave™: Contract Lifecycle Management, Q2 2023  Read More

CLM and Contract Analytics Saving Cost for Legal Operations

With the ever-increasing workload and complexities in the legal departments, the need for legal operations efficiency is growing. According to a survey conducted by Thomson Reuters, 81% of all legal departments surveyed have dedicated legal operations staff, which denotes a 24% increase than the previous year.

Historically, the legal operations were born as corporations increased in size, and the pressure on the general counsels became overwhelming. One of the critical responsibilities of the legal operations is to decide what is economical for the company; this includes — strategy, risk, and financial management.

With time, the role of legal operations has expanded and evolved. Some of the external and internal drivers responsible for this evolution are as follows:

  • The increased cost of legal services
  • The exponential boom of new technologies
  • More complicated rules and regulations
  • Increased Mergers and Acquisitions
  • Achieving more with fewer resources without compromising the quality
  • Exposure to new organizational risks
  • Changing talent models and requirements
  • Expansion of businesses in multiple locations

The three A’s — Automation, Artificial Intelligence, and Analytics are changing the way the legal operations function. Legal departments are steadily moving from manual and paper documentation to digitization and automation, thus, speeding up the workflow. AI and analytics are already making their mark. AI and RPA technologies are being used to draft contracts using standard templates from libraries, sort contracts based on their categories, and fetch any document on the go using a multi-parameter search. Analytics, on the other hand, help with complete visibility through advanced search and protect enterprises by identifying and mitigating contract risks.

With the change in the workflow, the focus of legal operations has also shifted from risk management to metrics-driven cost savings. The three A’s supervise the entire contract lifecycle management, including risk management, thus, freeing the legal operations staff from laborious tasks to focus on more high-value and strategic activities that help save cost for their organizations. Bringing in digital transformation has been one of the top goals for legal Operations, which involves identifying technology solutions that are adaptable to their evolving contract management needs for organizational growth.

Automation & Contract Analytics Addressing Legal Operations Challenges Via KPI Measurement

Some of the many day-to-day challenges which take over legal operations teams’ bandwidth and efficiencies are highlighted below:

  • Unpredictable time commitments for vendor management and financial reporting.
  • Document assembly and workflows for matter intake from people across the organization as well as contract review requests  
  • Poor workflows for incoming requests from multiple teams, leading to misalignment between priorities and time spent on an issue.
  • Spending too much time in inbox or redlining documents in Microsoft Word, leading to process bottlenecks or versioning issues.
  • Not being able to project spending, which is an increasing mandate from finance.
  • Unable to objectively quantify the value of work done (closing deals, audit unreadiness, issue resolutions, etc.)

Some of the other high-level challenges are:

  • Process improvement and change resistance within the teams
  • Getting stakeholders from other areas of the business to work cohesively with legal 
  • Collaboration among the team members as well as across departments
  • Visibility into contract information like expiration or renewal dates
  • Integration with other platforms like Salesforce
  • Lack of proper metrics to measure contract performance

Now, let’s see how contract automation and analytics can help address the issues mentioned above & more:

  1. Financial reporting: Reporting is one of the essential capabilities of effective CLM software. Besides providing basic alerts on contract status, the software also generates reports on important aspects like the revenue lost due to missed deadlines, the ultimate profitability of each contract by tallying the creation to completion period and the value of the contract, the specific financial impact of non-compliance, and so on. These financial reports provide valuable insights and help teams make strategic decisions.
  2. Intelligent contract review: AI-led CLM systems like Zycus automate contract review and negotiation process as per contract type and/or clause while providing workflow routing based on data values or differences between external agreement and preferred language. During the review, the AI auto-tracks all changes and maintains the latest versions ensuring visibility into every detail like what was changed, when it was changed, who changed it, etc. This not only ensures the inclusion of all necessary clauses but also keeps your organization audit-ready at all times.
  3. Saves cost & improves accuracy: Humans will make errors despite layers of precautions and cross-checks. And there’s a cost for every mistake — be it in terms of money, time, or energy spent on rectifying it. Contract automation tools like Zycus’s AI persona, Merlin Protector, ensure that your organization is safeguarded against such unfavorable circumstances by providing protection against non-compliance. Another AI engine, Merlin Explorer, helps the GSs and legal operations teams to tag high-risk contract terms and clauses that might need special attention during contract review.
  4. Single centralized storage: Traditional decentralized storage of documents can lead to many issues — difficulty in finding the required document on time, losing files, lack of easy accessibility, limited visibility on the contract stages, etc. Zycus’s repository softwareoffers secure and centralized storage for all contracts. It enables multi-parameter search, dynamic reporting, and configurable dashboards. Thus, making it very convenient for the legal operations team to find documents. Besides, with centralization, the teams always have easy access and visibility into the files from anywhere in the world, thus, enabling better collaboration.
  5. Enhanced security: Contracts are crucial and confidential documents. You wouldn’t want to imagine the consequences of spilling coffee over a very critical contract you’re working on, nor would you want it to go missing. Besides saving time and better organization, storing documents on cloud-based software protects them against physical damage or theft, thus, reducing your worry. Now, if you’re concerned about cybercrime, a sophisticated CLM solution ensures absolute protection of your documents — there lies their credibility.
  6. Reduced contract turnaround time: The primary motive behind automation is to speed up the contracting process. CLM systems can take up tedious and laborious tasks like — sorting large volumes of contracts, tagging agreements for faster review, flagging risky terms and clauses, and so on. Moreover, with self-service functionality and a comprehensive clause library, Zycus AI-driven wizard Merlin Guide simplifies contract request intake, cuts down the turnaround time, and increases the accuracy of best first drafts. This reduces the burden of the legal operations teams and allows them to focus on more complex activities that are beyond the capabilities of AI.

Some of the areas of measurement of legal ops that can be made possible with CLM technology are:

  • Increased visibility: It is vital for the legal operations teams to have clear visibility into what is going on in the businesses. An effective CLM helps in identifying opportunities for cost reduction and have sound control on contracts through alerts and notifications on contract expiration/renewal dates, payment deadlines, and so on. Deeper visibility into data and procurement processes allows the legal operations to make smart strategic decisions and provide necessary insights and support.
  • Performance tracking: With advanced CLM, appropriate milestones and metrics can be pre-configured for accurate tracking and assessment of performance, providing visibility into the day to day performance of contracts and alerting the stakeholders in case of any deviation or delays in the milestones configured. Thus, allowing the legal operations to immunize organizations against operational contingencies and ensure maximum compliance.
  • Risk mitigation: CLM solutions help professionals in identifying risks such as deviations from the standard procedure or cost overruns. Building a library of pre-approved clauses, including alternate and fallback clause suggestions, it mitigates any risk at the authoring stage. Moreover, it triggers remediation actions for risk mitigation, suggests alternatives to potentially dangerous words/clauses, or escalate to an alternate path. It also safeguards your organization from the complexities of a rapidly shifting regulatory and compliance landscape.

Considering the capabilities of an AI-powered CLM like Zycus, we can drive home the message that besides reducing the workload of legal operations, contract automation and analytics can also save cost.

To back it up with fact, research by World Commerce & Contracting shows that improvement in contract management processes can have a direct effect on corporate profitability. It can lead to an annual hike in profit of around 10 percent.

Taking over the mundane, repetitive tasks, AI optimizes the legal department’s spend and increases staff productivity in general, which, in turn, leads to more savings as it minimizes the time lawyers spend on non-legal or easily automated tasks.


Mr. Panchal is the Vice President at Zycus. An ardent promoter and practitioner of Theory of Constraints and CCPM, Digesh brings with him deep domain expertise from his long and rich personal experience in manufacturing. In his prior stint at Verdantis, he has led highly complex implementations of Master Data Management solutions for multiple master domains, across various industries and varied deployment models. As a forward-thinking leader with extensive experience in the design, development, testing, and rollout of cutting-edge B2B SaaS solutions, Digesh excels at driving the day-to-day operations of complex enterprises to produce turnarounds. At Zycus, Digesh is responsible for building a best-in-class AI-driven Enterprise CLM software and drive market traction.
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