Best Contract Management System Includes Extractive AI

A contract management system is a digital solution designed to streamline and automate the management of contracts. A contract lifecycle can take months to negotiate if the legal team executes a contract manually. A legal team can shorten the contract lifecycle with robust software incorporating extractive AI.

An enterprise legal management platform provides the best contract management system because they are integrated. Now that AI has hit the market with force, contract management benefits and so does the law department. Contract management solutions with extractive AI help legal departments efficiently handle contract creation, execution, and analysis, and ensure compliance and risk mitigation.

Best Contract Management System Benefits

The benefits of the best contract management system, as opposed to a mediocre application, deliver the benefits listed above and include improved organization, enhanced compliance, reduced risk of errors, and increased efficiency. A contract repository provides the ability to archive completed contracts for easy reference in the future. The enterprise legal management system addressed earlier showcases special features that enable the best contract management system for users.

One particular benefit, that bears mention, of an integrated ELM software and CLM application is linking contracts with matters. Lawyers managing complex legal matters can efficiently access that matter’s respective contract from one accessible dashboard. The benefits of this type of contract management system exceed most of the other contract lifecycle management applications on the market today. Legal teams can improve tracking of contract milestones and deadlines and ensure that obligations are met and renewals are managed proactively.

Another key benefit of contract management solutions is the use of templates. Contract templates can be specific to the practice area and the type of contract being developed. Rather than a team starting from scratch with every contract, utilizing winning contracts repetitively is smarter. This saves time in contract drafting, minimizes errors and informs legal leaders about where contract clauses originated, which leads to extractive AI.

There are archived contracts that should be used frequently; however, the contract management system is poor and cannot extract the best clauses, terms and conditions or language. The use of extractive AI changes all of that. Contract management benefits most from AI because clauses and terms can be easily pulled and reused. Lawyers can determine if the clauses require editing.

AI contributes to contract management by automating routine tasks, such as data extraction and contract review, and providing insights through advanced analytics. AI can also help identify potential risks and ensure compliance by analyzing contract language and terms.

Features in a newer contract management system are more oriented to AI. Extractive AI, for example, can pull clauses and facts from an archive of contracts for use in contract development. This capability is significant as the contracts in archives likely never see the light of day. Forgotten documents can be hidden in old folders or the cloud that should be used to draft new ones.

Why Select the Best Contract Management Solutions

The section header is a bit facetious, because, why not? Every legal department wants the best contract management system to make more mature decisions about vendors, matters and budgets. It’s possible, however, that the features don’t come to light until a demo is set up to learn more.

Primary features of a contract management system typically include contract creation and authoring tools, a centralized repository for storing contracts, automated workflows for approvals and renewals, compliance tracking, and reporting and analytics capabilities.

These features promote collaboration, efficiency and productivity by providing a centralized platform where all stakeholders can access and manage contracts. This reduces the time spent on manual tasks and allows legal teams to focus on more strategic activities.

Reporting and analytics capabilities should not be taken lightly. This data delivers opportunities for legal leadership to make data-driven decisions about the overall success of the legal department based on performance, contract adherence, budgets, and the services that outside counsel provides.

We addressed enterprise legal management software regarding contract lifecycle management. Legal departments that select ELM software benefit from the integration of contract lifecycle management applications. While users of this robust powerhouse combination of ELM and CLM don’t consider hidden benefits (instead, they use the software to improve workflow), legal operations professionals select the best ELM software and contract management systems for scalability and integration with the tech stack.

Security features and the volume of contracts flowing through a law department are critical aspects of whether ELM software exceeds capabilities and can scale with the growth of the law department. Conjoining the best contract management system with the best ELM software can significantly enhance legal department operations and overall business performance.

Contract Templates Are Key Feature in Contract Management Platform

Templates in contract drafting are pre-designed documents that provide a standardized format and language for creating contracts. They serve as a starting point, ensuring consistency and compliance with legal standards. Using templates can significantly speed up the drafting process, reduce errors, and ensure that all necessary clauses and terms are included.

While not every contract has to start with a template, it is highly recommended. Common contract types like NDAs, service agreements, or employment contracts do well when started from a template. This type of information rarely changes, so the clauses can be extracted or repurposed without more time devoted to review. Templates help maintain uniformity across contracts and can be customized to fit specific needs.

Newer templates often incorporate the latest legal requirements and industry best practices. It's beneficial to seek updated templates to ensure compliance with current laws and regulations. These templates may also include modern clauses addressing emerging issues, such as data privacy and cybersecurity. It’s important to ensure that updated templates include references to any AI regulations. More AI regulations are on the horizon, and vendors that supply AI services must comply with transparency about how they deliver artificial intelligence.

Drafting a contract without templates can lead to inconsistencies, omissions, and increased risk of legal disputes. It may also be more time-consuming, as each contract would be created from scratch. Templates provide a reliable foundation, allowing legal professionals to focus on tailoring specific terms rather than reinventing the entire document.
To summarize why the best contract management system includes enterprise legal management software, matter management, workflow applications, and financial management applications in addition to vendor management, legal departments need only look for this type of integrated software to scale for the future. Contact us to learn more.