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

The role of intelligent contract management in transforming legal operations

According to PricewaterhouseCoopers, the average Fortune 2000 company holds around 20,000-40,000 active contracts. Imagine having to manage such a large number of contracts throughout their lifecycle without any technological aid! Sounds overwhelming right? In most cases, the responsibility of drafting, authoring, reviewing and managing a huge portfolio of high-value contracts falls single-handedly upon the legal function where the execution of the same is largely the responsibility of the legal department operations (LDO) team. And unfortunately for LDOs, automation in contract management is yet to become a common practice. Companies still rely on manual processes for contract management making it a cumbersome, time-consuming episode for the legal team, often exposing the company to risks and omissions.

The evolution of Legal Department Operations (LDO)

Over the past decade, a significant number of disruptions have transformed the way of doing business. Both internal and external drivers like globalization, technology, increased regulations etc., have paved way for a decentralized, refined and modern business model. Legal too has not been immune to this trend and has started to feel the repercussions of these disruptions.

Today, corporate legal departments are often being asked to reduce costs and operate more efficiently than ever before. Legal is also seeing the gap closing between its function and the business. There is a growing trend of LDO becoming a key function in many legal departments as LDOs can free up attorneys to focus mainly on legal while they take care of the legal business operations. With the continuous evolution of legal operations professionals, the very face of legal operations within the legal department is likely to undergo further segmentation and specialization to meet the growing business demands. And LDO is all set to become the connecting thread between legal and business functions. As a result, the new generation of legal operations professionals needs to be well-resourced to help legal better serve the business and to help the business better utilize legal.

Factors influencing the transformation of LDOs

Along with factors like increased regulations, mergers and acquisitions, rising costs of legal services etc. the three main influencers disrupting LDOs are the 3As (Automation, Artificial Intelligence, and Analytics).

Many legal departments still rely on manual, rudimentary processes for their day to day operations. But technology is fast changing that by automating all routine tasks and enabling legal team to process their work at a greater pace and precision. Artificial Intelligence reduces the time taken in doing laborious tasks and allows lawyers to concentrate on more strategically important, high-value and complex work and assists legal operations in using past patterns for improved outcomes in decision making. Analytics takes legal operations one step further by helping identify risks and obligations, predict legal operations costs and utilize past data and trends to aid in business intelligence and operational strategy. Together, automation, AI and analytics are leading to the growth of next-gen legal department operations, and an increased role of knowledge management in legal operations.

The role of advanced contract management solutions in transforming LDOs

For a decade, digital disruptions have been constantly changing business processes across industries, but, adoption of smart contract management software has been a fairly new concept.  To help Legal Operations streamline contracting process and monitor contracts throughout their lifecycles, digitally driven contract management solutions are a necessity. Manual contracting means no visibility into past contracts, no centralized repository, no streamlining of contract language, and no way to track the performance of contracts. This can lead to missed deadlines, auto-renewals, a risk of non-compliance, and increased costs.

Artificially intelligent contract management systems provide an extra pair of eyes and ears to the legal operations team. It automates and streamlines contracting processes to draw maximum value from contracts. Let’s look at how it helps transform the Legal Department Operations:

  1. A real-time view of all past and present contracts

Managing contracts starts with first locating them easily. Often, with contracts stored in multiple locations and shared drives or even physical cabinets, finding contracts alone is a near-impossible task. A centralized repository with a real-time view, easy search options, and personalized dashboard can save immense time and effort in the menial task of searching for contracts. Once contracts are stored at a centralized location, legal operations teams can access them anytime, anywhere and pull out any number of contracts as needed by the legal counsel.

  1. Easy and enhanced contract authoring

A very important task at the beginning of a contract’s lifecycle is to author contracts, often on third party papers as well. Authoring contracts manually means no consistency in contract language, the possibility of missing out certain clauses and obligations, difficulties in extracting information from third party papers and taking excessive time to draft contracts from scratch. This results in difficulties and delays in the review and approval processes as well. This is a cause of concern for Legal operations as it primarily responsible for ensuring all clauses are covered and consistency is maintained in authoring language. An AI-powered contract authoring system streamlines contract language by using pre-defined templates and clauses. A case in point is Forrester Research’ observation that CLM solutions shrink the timeframe required by legal teams to draft and review contracts by up to 80%. The software also enables easy extraction of important clauses from third-party paper making the agreement risk free. Having a standardized language saves review time and a clause library ensures no important clauses or mandates are missed.

  1. Streamlined review and approval process

Legal operations teams are mainly responsible for ensuring contracts cover all the important clauses, are compliant and can deliver value to the company. However, they are not the only ones involved in the approval cycle. Often, as more than one party is involved in the review and approval process, there is a lot of back and forth of contract documents, confusions with the latest versions, unopened emails etc. This results in delays, inconsistencies in contract languages, lack of visibility and bottlenecks. An advanced contract management system automates the workflow, provides a single-view, personalized dashboard, maintains the latest version and alerts the next person in the workflow to review and approve the documents all in a secure, centralized and timely manner. Clear visibility into the workflow leads to increased accountability, faster reviews, and accurate version management.

  1. Accurate post-award performance tracking and analytics

In most organizations, even in this age, once a contract is signed, it goes into storage and is often never given a second look. This negligence in the handling of contracts can cost companies huge sums in penalties and losses. It also affects legal operations costs, budgets, and company reputation. Monitoring contracts to review their performance and ensure they are running on the pre-meditated path is essential to get maximum value from them and avoid any unnecessary risks and expenses. An advanced contract management solution tracks milestones and deadlines, and alerts in advance, thereby helping take preventive actions. It also comes equipped with AI enabled analytical abilities to aid in better decision making. Research from Gartner Inc. shows that nearly 50% of legal departments plan to rely on analytics for process improvement and more than a third of these are set to leverage analytics for legal analysis. Analytics can assist LDOs in gaining insights from all past contracts and identifying trends and opportunities for performance improvement, cost recovery, loss mitigation, and cost savings.


Anthony Scannell is the Director of Sales at Zycus, a leading provider of cognitive contract software solutions. With over a decade of experience in the field, he has become a subject matter expert for Contract Lifecycle Management (CLM), helping organizations streamline their contract processes, increase compliance, and reduce risk. Anthony’s expertise in CLM has helped numerous clients achieve their contracting goals and drive bottom-line results. He is known for his deep understanding of the complexities of the agreement process and his ability to present solutions that meet the unique needs of each client. Anthony’s dedication to customer success and his passion for CLM make him an invaluable asset to the Zycus team.
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