Author: Gloria Qiao, Founder & CEO of Trusli
Our last article gives you an overview of the various legal tech applications. If you don’t have any system yet, one of the first things we recommend you implement is a Contract Lifecycle Management system or CLM. Here is what a CLM is and why you need to implement one right away.
1. It’s a central depository of your agreements
Some law firms still have each of their associates store their documents on their hard drives (I really hope they are not storing the paper copies in their drawers). This is a flawed approach: 1) it prevents others from sharing firm-wide templates and precedents, 2) it may cause a lot of confusion about where the latest documents are for a certain client and matter, and 3) finally if someone were to leave, you may lose those documents forever.
Most law firms have gotten out of that state and have a central document depository system, be it google drive or dropbox, and it is a big step forward. If so, why do you need a CLM?
A CLM allows you to tag and categorizes all your documents by the client, matter, type of agreement, date entered into, expiration date, term, etc. Instead of filing all the documents in “folders,” you can add these tags, and the documents become easily searchable. This is a much better and more agile way to organize and share documents.
2. A CLM also allows you to self-define the fields
This sounds great, but what if you are trying to find a specific kind of precedent or agreement?
For a simple example, you want to find a purchase agreement for hardware with an unusual indemnification clause and limitation of liability where the supplier’s liability is uncapped.
When you are filing away all agreements, you can self-define the other “fields” you want to keep track of, such as indemnification clauses or limitation of liability terms, and search for specific ones. This approach makes your knowledge base much more accessible for other associates at the firm to pull specific kinds of precedents. In addition, if a client has a specific question about a certain clause in their agreement, you can easily find the relevant information.
3. A CLM can act as a reminder/calendar tool
Since you are keeping track of the agreement date, term, and expiration dates, you can also enable reminders so that if an agreement is about to expire, you give a 90-day, 60-day, and then 30-day reminder to renew it. This way, you will never accidentally forget something has expired or is about to expire and can work on it ahead of time. Of course, you can always keep track by entering the relevant dates in your calendar, but in this case, the system keeps track of these dates for you.
4. A CLM is a great internal and external collaboration tool
Let’s face it; lawyers love Microsoft word and redlines. However, others these days prefer to be able to collaborate on documents in real-time as opposed to sending stale documents back and forth via email attachments. Internally, you can collaborate with team members to ensure everyone is aligned. Some systems, such as Ironclad, even allow counterparties who don’t have the CLM to use the same to provide feedback.
In addition, a CLM allows you to enable excellent version control: it can identify which document has been sent by which party to the other party and even run redlines for you among different versions. It can also keep track of signed documents of the same, which leads to the point below.
5. Many CLMs connect with signature software
Finally, a CLM can also integrate with signature software such as DocuSign and DocSend, so you can further automate your workflow. Because of the adjacent nature of the CLM, some ERP companies such as SAP or document signature companies such as DocuSign have rolled out their CLMs.
6. Trusli can help you further automate your workflow with our software
If you already have a CLM system, congrats. You are one huge step ahead of many of your competitors. Our software can connect with your CLM to enable the true automation we envision. No need to go from email to the CLM; our automation will pull relevant precedents for you.
If you don’t have a CLM yet, don’t worry, we can help you set up all your documents in our system along with the same logic. Although we are not focusing on features such as redlining or document signature yet, we have enough capacity to help you organize your documents and pull relevant templates based on your self-defined requirements.