Contracts are often filed and forgetten. Learn how to measure the benefits of contract management software over spreadsheets and folders.
How to measure the true return on investment in contract management software.
Learn how to measure the true return on investment in contract management software. See how to make quick, practical improvements to your business today.
Contract Management Myths
Solely an administrative cost
It is tempting to see contract management as an administrative burden. Spreadsheets are good enough to keep a list of contracts together.
Purely a process problem
Many business people see the legal department as the “business interruption team,” meaning that contracts take a long time. The myth is that improving the legal department’s contract drafting process will accelerate contract production.
Document management
Yes, contracts are reduced to documents in the vast majority of business deals. The myth is that contract management is just about document management. If we know where the documents are, then the contracts are managed.
Contract Management Facts
Improves financial performance
Businesses operate on a network of contracts for revenue, expenses, assets, and liabilities. Careful management improves financial performance. Software designed to expose the financial structure of contracts and to identify risks can help grow the business.
Demands expertise
To extract more value from contracts, requires a thorough understanding of the risks and opportunities embedded in the terms of a contract. Reports that show performance obligations, insurance requirements, and indemnification provisions add more financial value than processing a language change more quickly.
Promotes better risk management
When contracts are managed as data, instead of words, they can provide insight into the business, especially for the entire contract portfolio.
Return on Investment calculation
DIRECT FINANCIAL CONSEQUENCES
Benefits
Protect revenue
Prevent revenue contracts from expiring, structure revenue contracts for best revenue recognition.
Expense control
Prevent unexpected auto-renewals of expense contracts.
Costs
Licensing
Fees, users, document storage
Subscription or maintenance
Annual fees, escalations
Services
Third party services, internal service requirements
RISK MANAGEMENT
Benefits
Identify and prevent breach of contract, by either party.
Manage legal policy exceptions, like choice of law and indemnification.
Costs
Unexpected losses
Adverse legal rulings with unknown scope.
Loss of remedies
Lack of data prevents timely use of contractual remedies.
COMPLIANCE REQUIREMENTS
Benefits
Avoid or mitigate regulatory violations with compliance reviews based on external legal requirements.
Costs
Government regulatory reviews.
Third party enforcement
Private enforcement rights.
Return on Investment for Lextree
DIRECT FINANCIAL CONSEQUENCES
Benefits
Protect revenue
Prevent revenue contracts from expiring, structure revenue contracts for best revenue recognition.
Expense control
Prevent unexpected auto-renewals of expense contracts.
Costs
Lextree provides an annual subscription for unlimited users and unlimited contracts.
All services are provided on a fixed bid basis.
RISK MANAGEMENT
Benefits
Identify and prevent breach of contract, by either party.
Manage legal policy exceptions, like choice of law and indemnification.
Costs
Lextree provides insight to the entire contract portfolio for proper risk management.
Track legal provisions by document or contract.
COMPLIANCE REQUIREMENTS
Benefits
Avoid or mitigate regulatory violations with compliance reviews based on external legal requirements.
Costs
Lextree support compliance obligation tracking for any type of regulatory requirement.
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