How To Implement Contract Management Workflow?

The best way to implement a contract management workflow in the law department requires an enterprise legal management platform to connect all applications, including contract lifecycle management, work management, AI-powered tools, matter management applications, and other features that streamline the law department. Setting up workflows for contract management with manual processes can be time-consuming and prone to errors. Using AI prompts and tools in legal workflow management streamlines efficiencies and automates workflow in the law department. Below is an overview of various considerations when setting up legal workflow management for contracts, including the factors that affect workflow success.

Factors in Contract Management Workflow

A contract management workflow is a structured process for creating, reviewing, negotiating, approving, executing, monitoring, and renewing contracts. Its purpose is to streamline contract lifecycle management, reduce risks, ensure compliance, and improve efficiency. Each contract management workflow depends on various factors, including:

• Complexity of the Process - A straightforward workflow (e.g., basic contract approval) might be configured in a few days, while a more complex process with multiple steps, integrations and conditional routing could take several weeks.
• Availability of Templates and Pre-built Workflows - If organizations use enterprise legal management software with pre-built templates, existing workflows may be adapted in hours to days. Custom workflows, however, might require extensive planning and testing. LexisNexis CounselLink+ automates workflow management for contracts. In the unified workspace of CounselLink+, users have access to the entire LexisNexis ecosystem. Several hundred contract templates from LexisNexis Practical Guidance are accessible from the ELM software portal. An approved clause library for use in contract management is also accessible to in-house lawyers and legal operations professionals with one click into the LexisNexis portal.
• Level of Integration - Workflows that require integration with other software APIs, create more complexity and a lengthier time to set up steps. Legal operations can confer with the technology vendor, CounselLink, to determine whether the enterprise legal management solution communicates and integrates with other software. This may extend the legal workflow management timeline due to the need for API setup, data mapping and testing.
• Internal Resource Availability - The involvement of IT, legal and compliance teams in the design, validation and approval process can also influence the overall setup.
• Testing and Iteration - The success of a workflow depends on the factors above and testing. Following initial setup, workflows often require pilot testing to identify any necessary adjustments or enhancements. This process could extend the setup by days or weeks, depending on feedback and changes needed.

Is One Workflow the Same for All Contract Types?

Developing a contract lifecycle management workflow includes similar basics; however, extra steps may be required in various situations. Here are some of the considerations that may require additional steps in the workflow for contract management:

• General Contracts: For many standard agreements—such as NDAs, service contracts, or sales agreements—the process steps and approval tiers may be largely similar.
• Specialized Contracts: Some contract types, like government or highly regulated contracts, may have additional review requirements. Contracts oriented to compliance or regulatory reviews include specialized clauses and terms.
• Multi-Party Contracts: While the core workflow remains similar, specific steps, details and timelines may vary based on contract complexity and the number of parties involved. Workflows for contracts involving multiple parties tend to be more complex due to:
• Additional Negotiation Rounds: More stakeholders may be involved.
• Complex Approvals: More internal and external reviews may be required.
• Collaborative Platforms: Use of centralized platforms for transparent tracking and version control is crucial.

LexisNexis CounselLink+ features a contract lifecycle management application that integrates matter, financial, vendor, work, and analytics applications. This unified workspace creates streamlined work processes in a single dashboard, making contracts easier to control with redlining, version control, approvals, and execution.

Phases of Workflow for Contract Execution

Every legal department has its own methodology for work management, which depends on the software used, the department's size, the company's size, the number of outside counsel firms hired, and the complexity of matter management.

The following steps provide an example of timeframes for legal workflow management in contract execution. These basic steps can be expanded upon for more complex workflows, and some law departments may enhance the process with additional steps tailored to their specific needs.

• Define Objectives and Requirements
  • Understand what the legal department aims to achieve (e.g., risk reduction, efficiency, increased compliance)
  • Gather input from stakeholders (attorneys, business units, finance, etc.)
  • Define key performance metrics (cycle time, error rates, compliance checklists)
• Planning and Design
  • Map out the end-to-end process; create process maps or flowcharts
  • Define transfer points, tasks, roles, and approvals; Define decision points and clear approval hierarchies.
  • Identify any integration points with other systems
  • Determine gaps such as missing reviews or lack of automation in approvals.
  • Separate conditions for multi-party contracts if needed (e.g., staggered negotiations, additional stakeholder comments).
• Technology Selection, Integration, Configuration
  • Evaluate and select workflow automation platforms or enterprise legal management software to configure the process based on the design
  • Input templates, rules and conditions for each step (e.g., drafting, negotiation, approval, final signature)
  • Ensure the platform supports version control and audit trails.
• Integration and Pilot Testing
  • Validate the workflow on a small scale before full deployment.
  • Select a sample of contracts (including multi-party examples)
  • Collect user feedback on usability, process clarity and efficiency
  • Adjust the workflow based on feedback
  • Integrate with other systems as needed
  • Run test cases to ensure that tasks route correctly and that expiration dates, automated reminders and version controls work as planned
• Rollout and Training
  • Deploy the workflow after successful testing
  • Train team members and clarify usage guidelines

Once these steps are implemented, ongoing monitoring of the workflow identifies trouble spots and areas working well. Consistent improvement of the workflow and evaluation helps everyone maintain efficiency.

Legal operations can establish performance metrics and KPIs, including time to approve contracts, error rates and other success measurements. The best method to ensure workflow success is to engage stakeholders in the continuous evaluation process and improve the workflow steps as needed.

Timeline to Develop a Contract Management Workflow

The actual timeline of a contract management workflow depends on the specifics of your organization’s requirements, available tools, and the complexity of the workflow. Start by identifying your critical process steps, then plan the integration and testing phases thoroughly to ensure a robust and efficient workflow implementation. Other factors may impact the timeline, including solution review, purchase and deployment or the availability of experts to configure workflow, for example. The timelines below are estimates and vary for each law department. Other factors may come into play, as well. Some legal operations professionals guiding this process may add additional steps or remove some.

• Defining Objectives and Requirements: 1-2 weeks
• Mapping and Reviewing Existing Processes: 2-4 weeks
• Identifying Gaps and Improvements: 1-2 weeks
• Designing the Workflow: 2-4 weeks
• Technology Selection and Integration: 4-12 weeks (depending on customization and integration requirements)
• Pilot Testing: 2-4 weeks
• Training and Full Roll-Out: 1-3 weeks

For a typical contract management workflow, the setup could range from a minimum of four weeks to three months, depending on the efficiency of the planning and implementation processes, as well as technology installation. Other factors come to bear, including complexity and successful integration with existing systems.

Other Considerations in Contract Management Workflow

• Build flexibility into a workflow with automated alerts, tiered approvals, and different routing options. Consider customization for multi-party or highly regulated contracts.
• Embed compliance and risk management checks, including legal standards and data protection regulations. Require review and approvals from compliance experts where necessary.
• Create a user-friendly experience to improve adoption. Ensure that the contract management system provides features like search, reporting and automated reminders.
• Track audits and compliance with detailed logs of all changes, approvals, and negotiations for audit readiness and compliance verification.
• Design the workflow with scalability in mind, so it can easily adapt as the volume of contracts and complexity increases.
  Consider how to engage stakeholders with continuous essential input and feedback from all parties involved—legal, business, IT, and compliance—to refine the workflow.
• Enterprise legal management software, such as LexisNexis CounselLink+, is a legal operations hub integrating contract lifecycle management. The solution is robust and scalable with the ability to draft contracts within the single, unified dashboard. 

TL;DR

To build a contract management workflow, choose enterprise legal management software integrated with contract lifecycle management software. Other considerations include the type of contract, steps in the workflow, the timeline, stakeholder engagement, the approvals process, and ongoing evaluation.

LexisNexis CounselLink+, an enterprise legal management solution, integrates contract lifecycle management into contract, matter, financial, vendor, work, and analytics workflows. Contact CounselLink for a conversation about automating contract management workflows. 

Legal operations guides the contract management workflow, monitoring each step and timeline to reach consensus, to pilot test, and implement. Once deployed, the contract management workflow can be used by everyone in the legal department to ensure accuracy, streamlined efficiency and collaboration among all parties.