Contract Management: Do You Need A Responsive Legal Team?

Corporate legal teams are the sole agents of identifying opportunities and streamlining contract management. They play a critical role in ensuring that companies function in a safe and compliant environment. For this reason, all divisions and operations must adhere to the guidelines set forth by the legal division. Or else the business might end up facing legal, operational, and financial repercussions. However, in many cases, a lack of reach or responsiveness can spur employees to bypass legal counsel.

A responsive legal counsel is the need of every business. Countless obligations and contracts hound the legal team of scaling companies. Therefore, the legal department must set priorities to ensure time for high-value tasks. Using contract management software, the legal team can respond consistently and proactively in a way that saves time and increases revenue. Before we dive into how online contract management software helps, let’s discuss why a responsive legal team is necessary.

Why do businesses need a responsive legal team?

Contracts are the basic foundation of a business relationship. They specify a company's obligations, rights, and rules for dealing with its partners, customers, suppliers, employees, and other parties. Since a business agreement plays such a crucial in the daily operations of an organization, the legal department must take special care to oversee the contract management lifecycle. Without proper intervention from the legal, there’s no guarantee for the competency or compliance of the business contract. Hence, having a responsive legal team is essential for several reasons:

• Timeliness

Legal issues often require quick action and response. An in-house legal department's primary responsibility is assisting the business in navigating the legal risks that may arise during normal business operations. A responsive legal team can provide timely advice and assistance, helping organizations avoid potential legal pitfalls and resolving issues before they escalate. It can include providing legal guidance on contracts, compliance with regulations, intellectual property, employment law, litigation, and mergers and acquisitions. 

Legal proceedings, such as court filings, responses to legal complaints, and appeals, often have strict deadlines. Failure to comply on time might lead to legal consequences, such as default judgments or sanctions. A responsive legal department is necessary to avoid severe consequences for the company, such as monetary losses, legal liabilities, or reputational harm.

• Risk management

A responsive legal team can help you identify and manage legal risks, ensuring the business complies with applicable laws and regulations. Organizations can reduce the possibility of expensive legal disputes by taking the initiative and staying on top of potential legal issues. The legal department must proactively identify legal risks associated with the company's daily operations, such as regulatory compliance issues, contractual risks, and potential litigation risks.

The legal department must constantly be on guard and knowledgeable because they are responsible for the company's legal advice and strategies for compliance programs, contract negotiations, and dispute resolution. By only working closely with other departments within the company and timely response, the legal team can ensure contractual risks are taken care of effectively.

• Cost-effectiveness

Early intervention and proactive legal advice often result in cost savings for businesses. Legal issues can be costly, both in terms of legal fees and potential liabilities. A prompt resolution of legal matters can reduce expenses and stop disputes or litigation from becoming costly. The organization can prevent unforeseen costs by swiftly and effectively addressing challenges with the help of a responsive legal staff. 

The legal department enables organizations to focus on areas that are critical to the business and have the potential for significant impact. They can guarantee effective resource allocation by coordinating legal resources with strategic goals. Lack of mediation from legal in time can cost organizations money. They must continuously evaluate and improve legal processes to eliminate inefficiencies and reduce expenses. Every team across the organization requires competent contracts for their daily operations. The legal team can identify bottlenecks, streamline workflows, and implement best practices to minimize operational charges. They can regularly review processes to identify areas for optimization and cost reduction.

• Reputation management

Legal issues may significantly affect your business's reputation. A responsive legal team can help organizations develop and implement a legal strategy that aligns with their business objectives. They enable companies to mitigate the adverse effects of legal disputes and protect their business's image and reputation. It involves analyzing various areas such as compliance, intellectual property, contracts, employment practices, and public statements. 

A consistent and proactive legal counsel can assist businesses in reaching their goals by working closely with different departments and comprehending their individual needs. By identifying potential risks early on, organizations can take measures to mitigate them and protect your organization's reputation. They help to ensure that employees understand the importance of acting per applicable laws, regulations, and company policies. By fostering a culture of compliance, businesses can minimize legal and reputational risks that may arise from unethical behavior. Through an efficient contract management process, the legal team helps to develop strong relationships with key stakeholders such as customers, employees, investors, and the community.  

How does contract management software improve the legal team’s responsiveness?

What do businesses want? They want world-class legal minds to safeguard their organization against contract risks. The legal department must, therefore, consistently respond to the demands of the business. They must incorporate practices and tools to streamline the contract management process to deliver value to the company. Contract management software can speed up the legal department's reaction time throughout the contract lifecycle. Here’s how:

• Contract request 

Contract management software can significantly enhance the responsiveness of a legal department during the contract request and authoring stage. By having immediate access to contract templates and clause library, the legal team can respond promptly to contract requests. They can generate competent contractual agreements in no time, so other departments don’t have to wait around for long.

These templates allow for the pre-configuration of clauses, terms, and conditions to assure accuracy and uniformity across all contracts. Legal teams can speed up the creation of contracts and reduce drafting and negotiation time by using pre-approved templates. Furthermore, advanced contract management software integrates smoothly with business apps to let other departments self-serve contracts. Sales, HR, and procurement teams can initiate contract requests while the legal counsel stays in control.

• Contract review

Contract management software facilitates the automation of tasks associated with the contract lifecycle. Organizations can route contract requests to the appropriate individuals through pre-defined workflows for review and approvals. It enables the legal department to monitor current contracts and act quickly. 

Automated notifications and reminders help keep the process on track and ensure timely responses. Moreover, contract management software enables the legal department to quickly find and navigate crucial terms or risky clauses inside the agreement within the agreement using advanced OCR and AI capabilities. The version history allows legal teams to track contract alterations over time and react accordingly without delay. It streamlines the contract creation process, minimizing delays and bottlenecks.

• Contract inquiries

Business agreements contain a wealth of information for various departments and processes. Contract management software provides a centralized repository where the legal department can store and organize contractual agreements. They can quickly locate and retrieve relevant contract templates, standard clauses, and previous versions. By having immediate access to contract templates and resources, the legal team can respond promptly to contract requests.

Contract management software allows users to assign metadata and tags to contracts. Metadata can include crucial information such as contract dates, parties involved, contract values, or contract status. The legal department can leverage contract metadata to filter and sort contracts based on specific criteria, facilitating efficient contract analysis. Contract management software empowers legal departments to generate custom reports to address inquiries about contract performance, compliance, or contract-related metrics.

Conclusion

In summary, a responsive legal team is essential for effective contract management, cost control, reputation management, and strategic planning. Organizations can reduce legal risks and put the company in a position for long-term success by having a legal team that can react to their needs quickly and effectively. 

Legal monitoring is necessary to ensure a company’s operations comply with all the relevant laws and regulations. To guarantee that the guidelines are applied, they must frequently communicate with all the other departments. Contract management software allows the legal counsel to collaborate on inquiries within the platform. They can leave comments, tag relevant team members, or initiate discussions around specific contracts. A responsive legal team can conduct regular assessments to identify potential legal risks that impact an organization's reputation.