Everyone agrees that managing contracts and the contracting process is critical today, but not everyone agrees on the best way to start—or when. With 2022 around the corner, now might be the time to delve into contract lifecycle management (CLM) and learn how template standardization, aka harmonization, can be the most effective way to empower legal team efficiency, reduce risk, and lower cost.
Earlier this month, Prashant Dubey, VP of Contracts Solutions & Disability Inclusion at Elevate, and Danielle Haugland, Global Alliance Director at Agiloft, hosted a webinar discussing how CLM enables you to establish management controls of your contracting through building a contract repository and standardizing your templates. While CLM offers a unified platform for creating, editing, tracking, and renewing contracts across their entire lifecycle, it is the establishment of a high integrity contract repository and the consolidation of templates that maximize the success of its implementation and results.
If you’ve ever felt that trying to find a particular clause in a specific NDA was like looking for a needle in a haystack, or if you’ve ever scrambled to come up with the precise language for the provisions in a contract (you know you have), then watch this on-demand webinar here to find out more. It’s time to automate the random tasks so you can focus on practicing more law.
What is contract template harmonization?
Simply put, contract template harmonization is the standardization of templates to create consistency and efficiency. Contracts can be viewed as the DNA of an organization, defining its rules, risks, obligations, and culture. If your organization has multiple agreements with deviations in provisions for the same contract type, it is time to reduce the number of templates you use and standardize your legal language within; the variability not only creates possible confusion but also increases volatility. The best way to avoid inconsistencies and to streamline the contract process is to consolidate your working templates.
“Contract template harmonization is a critical element in creating a fluid implementation process and also the foundation of achieving efficiency” -Prashant Dubey
How to get started?
Your best bet for starting the process of contract template harmonization lies in a contract repository, which is where CLM comes in. But that requires you to have a contract management system with a dynamic repository of contracts.
Viewing the process from the back to the front allows you to filter through your history to extract the most relevant content and develop the best standard templates for your own organization—and we hope you will narrow them down to one or two for each contract type. There may be some initial pain, but it is quickly outdone by the gain. Here are some of the steps:
- Review and settle on which of your material agreements contain the most relevant and trusted content
- Integrate them into your CLM ecosystem to establish a high integrity repository
- Extract rational metadata to consolidate the versions of your agreements and establish standard templates, ensuring consistent language, creating a clause library, and identifying fallback provisions.
“A seriously underrated step is template standardization; so much discovery goes into the task.” -Danielle Haugland
“A high integrity contract repository provides the foundation for real improvement.” – Prashant Dubey
For a demo on how to use metadata to build an entire clause library for use in template standardization, follow Pascale Laviolette, Product Manager at Agiloft, as she discusses how to Automate and Collaborate with the Agiloft Contract Assistant for Microsoft Word.
Why does it matter?
Contracts are at the core of any organization. The better the grip on contract management, the better the efficiency and risk reduction, for which consistency is key. Contract template harmonization is a great first step in achieving that consistency within contract types, providing the same starting point in negotiations and a standardized language for clauses and provisions. The result? Easier maintenance, accelerated cycle time, reduced costs, and more time for lawyers to practice law. It is, as they say, a no-brainer.
“Standardized language in provisions (can) reduce negotiation intensity, accelerate cycle time and enable lawyers to practice more law.” -Prashant