Pre-execution is the lengthiest phase of the contract lifecycle—and for good reason. During this critical stage, companies can secure favorable terms before a deal has been finalized and mitigate risk by exercising due diligence.

And businesses that successfully do both can save significant percentages of their annual costs while also avoiding inaccuracies and non-compliance issues. What’s more, they can accelerate negotiation cycles by 50%, reduce erroneous payments by up to 90%, and cut contract processing costs by 10-30%. But relying on manual, outdated processes won’t get legal teams that far; achieving results like these is only possible by implementing cutting-edge technology that automates contract review and, in turn, accelerates contract lifecycle management. 

Contract Lifecycle Management Best Practices for Pre-Execution Stages

Forward-thinking businesses have discovered that the key stages of the pre-execution contract lifecycle can benefit greatly from the application of artificial intelligence (AI) and automation technology—streamlining workflows, saving vast amounts of time and money, and improving the contract management process. Here’s how.

Stage 1: For Contract Creation

Not only is technology capable of standardizing key information and routinely-included clauses, conditions, and preferred language in the drafting stage, it can also make it easier to enforce them later on. Once boilerplate language has been established, AI can review agreements and apply it without manual intervention. Naturally, this process entails certain advantages, such as the following.

• Having a single source of truth. By working in tandem with legal tech solutions, businesses can optimize their contracts and develop AI Digital Playbooks to house all pre-approved language, key negotiation positions, and standardized clauses.

• Simplifying templates. Many legal contracts are created from one-size-fits-all templates. AI and automation technology can quickly step in and redline them for problematic provisions while scanning for standardized language and boilerplate language. They can also automatically highlight and escalate certain sections for further legal review. 

Stage 2: For Collaboration

Contracts require cross-department collaboration from corporate and sales specialists to in-house counsel and third-party reviews. The collaborative nature of contracting ensures that all interests are considered; however, bottlenecks can arise during the back-and-forth process. Corporate and sales add downward pressure to complete deals faster, while legal and third-parties bargain for more time. It’s a challenging work environment without the right tools in place, but pre-execution contract review technology can help by speeding up processes and allocating time more efficiently.

• Automate contract redlining and review. When teams are stretched too thin, teamwork breaks down. Automated contract review solutions can “fill in” for a team member and save businesses time and money.  

• Add contextual notes. To speed up a counterparty’s contract assessment, an automated AI solution can make redlined revisions, extract clauses, and insert contextual notes explaining why certain changes were proposed.

Stage 3: For Approval

All stakeholders perform a final review of the negotiated contract. Approved changes are implemented, any lingering errors are revised, and the contract is readied for signing. Streamlining the approval process by applying contract lifecycle management best practices enables companies to move goods and services faster while cultivating positive relationships between all parties. Technology can take it one step further by:

• Pre-approving standard language. Legal teams can focus their attention best when they can see which parts of a contract have already been standardized and amended in negotiations.

• Implementing changes in one click. The ability to approve and insert a counterparty’s changes with a single click greatly reduces rewriting times.

Start Implementing Contract Lifecycle Management Best Practices Today

With a lot to do but not a lot of time to do it, legal teams can’t afford to waste precious time, manpower, or resources. A fully integrated, automated contract review and negotiation solution can address CLM workflow pain points and keep things moving across the entire organization.

LexCheck’s contract review and negotiation solution plays a crucial role during the contract lifecycle—accelerating the process of redlining, cross-referencing contracts against AI Digital Playbooks, and ensuring essential clauses are included in every draft. 

The platform’s AI even recommends insertions and deletions to improve compliance and train new employees in contract standardization best practices. Changes can be implemented with the touch of a button and easily shared with all involved parties, reducing time spent in the pre-execution phase by over 33%.

Schedule a demo to discover how LexCheck can apply contract lifecycle management best practices to your business today. Or contact sales@lexcheck.com to learn more about our product and services.

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