This is a featured article for the Association of Corporate Counsel (ACC) Tampa Bay chapter’s newsletter series.
How many times have you glanced at the clock after searching for a contract, unaware of how much time you spent trying to find it?
Or worse, how many times were you unable to locate a contract at all despite endless searching?
If either of these scenarios sound familiar, you’re not alone: 71 percent of companies misplace 10 percent of their contracts, according to the Journal of Contract Management. Why? Because they lack a reliable, searchable contract repository where they can store and manage contracts at scale.
But if you think merely purchasing contract repository software is the solution, think again: The amount of thoughtful planning, organization, and priority alignment you do before implementation is equally as important as choosing the right tool.
Unsure how to get started? Here are some pre-implementation planning tips to ensure contract repository success:
First, Why Do You Need a Contract Repository?
No two contract managers or general counsel manage their contracts the same way.
Some still prefer antiquated physical contract storage systems, like filing cabinets. Others dig through email attachments, Excel sheets, or shared drives to store and collaborate on contracts. But these all have one thing in common: Poor contract visibility.
Storing contracts in filing cabinets, for example, requires tedious manual searching and doesn’t provide a holistic view of all of your contractual obligations and terms. This can lead to:
- Missed renewals
- Service gaps
- Outdated or duplicate contracts
- Legal non-compliance
- Productivity losses
But with a designated contract repository, you can access the information you need, whenever you need it, all in one place — and you never have to worry about misplacing a contract again.
AI-powered contract repositories take this even further by introducing powerful search capabilities. With an AI-based searchable repository, you can bulk upload executed agreements and the machine learning models will identify, extract and analyze the contract metadata you want to track — like payment terms, force majeure, governing law, and termination clauses.
Once uploaded, you can do simple, free-text searches to find specific language in your agreements, or even do more advanced structured searches to compare terms and clauses across your contracts.
For example, you can use search functionality to:
- Avoid auto-renewing services you want to terminate by searching for Auto-Renewal or Evergreen clauses
- Optimize your cash flow by searching for Payment Terms and Billing Frequency
- Seize cross-sell or upsell opportunities by searching for Scope of Services
So, now that you know how contract repositories can help mitigate risks and boost revenue…how can you start implementing one for your team?
Step No. 1: Identify Your Top Priorities
Before you implement a contract repository, your entire contract team should be aligned on two things: The purpose of getting a contract repository, and the results expected from it. As you move farther along the process, these priorities will guide your decision-making.
Next, find out what your executive team needs the most. What data do they typically request the most from contract management or legal teams? Do they primarily search for historical contracts or active ones? Is there a reoccurring bottleneck that a contract repository can eliminate? Their answers will help you determine what data needs to be readily available in your contract repository.
After you talk to your executive team, meet with your sales team to discuss ways a contract repository can streamline your sales pipeline.
For example, your sales team can search specific terms and conditions in previous contracts to see which clauses do, or do not, have negotiating flexibility. Plus, they can set up automatic reminders to stay ahead of renewals — a vital source of revenue — and other key deadlines.
Finally, listen to your contract managers and administrators. Since they work with your contracts daily, they’ll have a pulse on what’s most important and why. They can help you with the more granular details, too — including building a list of attributes to configure in the system.
Step No. 2: Organize Your Contracts
Your contract repository will only be as effective as the data you put into it. So, use the intel you gathered in the previous step to determine which contracts you should upload first.
For example, based on your answers from step number one, what contract type will have the highest impact once it’s in the repository? Start there. That way, you can manage your migration in steps instead of having to do it all at once.
For AI-based contract repositories, getting organized also means marking up contracts based on the attributes — terms, clauses, conditions, etc. — your team cares about most. While this step is tedious, it’s critical: This is what allows you to perform granular, structured searches across your contracts later on.
No matter how you structure this step, it takes time. Whether you’re starting with one particular contract type or you’re working backward from your most recent contracts, the end goal is the same: clean data for a clean and effective repository.
Step No. 3: Get Started
Once you’re done with the planning stage, put your plan into action and migrate your data.
By this point, you should already have selected your contract repository vendor. Even though you can get organized without them, you’ll find the process much easier if you can work with the vendor’s team: They can provide pointers on how to effectively handle markup, help you narrow down priorities, map out a migration plan, and ensure a seamless transition.
The work you do upfront will dictate how successful your final contract repository will be. Instead of jumping in headfirst, plan — get aligned on priorities, organize your contracts, and choose a reliable partner — to ensure you get the results you want from your contract repository.
For more contract repository and contract management tips, visit our blog.