In today’s tumultuous economic climate, in-house lawyers are under increasing pressure to do more with less. Budget constraints, coupled with a growing volume of contracts requiring review, create significant challenges for legal teams. However, by adopting strategic approaches and leveraging technology, in-house lawyers can manage these pain points effectively. In this article, we discuss several options to help in-house lawyers optimise contract review processes without compromising on quality.

Prioritisation and Risk-Based Segmentation

One of the most effective strategies is to prioritise contracts based on their risk and complexity. Not all contracts carry the same level of risk or require the same level of scrutiny. Legal teams can allocate their limited resources more efficiently by implementing a risk-based segmentation approach.

•   High-Risk Contracts: These should be the primary focus and require detailed review. They often include those with significant financial implications, regulatory requirements, or potential impacts on the company’s reputation.
•   Medium-Risk Contracts: These contracts may require a more streamlined review process, focusing on key clauses and potential red flags.
•   Low-Risk Contracts: Routine or low-risk contracts can often be managed with standardised templates and minimal oversight, freeing up legal resources for more critical tasks.

Standardisation and Use of Templates

Standardising contracts and utilising templates for frequently used agreements can drastically reduce the time and effort needed for contract review. By creating robust, pre-approved templates for common contract types, in-house legal teams can streamline the review process and ensure consistency across agreements.

•   Developing Templates: Collaborate with key stakeholders to develop comprehensive templates for various types of contracts, including NDAs, service agreements, and procurement contracts.
•   Periodic Review: Regularly update templates to reflect changes in regulations and business needs, ensuring they remain relevant and effective.

Leveraging Technology and Contract Management Solutions

Adopting technology is crucial for enhancing efficiency in contract review. Contract lifecycle management (CLM) software and AI tools can automate and expedite many aspects of the contract review process.

•   CLM Software: Platforms such as Ironclad and Icertis provide end-to-end management of the contract lifecycle, from drafting and negotiation to execution and renewal. They offer features such as automated workflows, centralised contract repositories, and real-time collaboration.
•   AI-Powered Review Tools: AI can assist in identifying key clauses, flagging potential issues, and ensuring compliance with company policies. Examples of tools available include Flank, Luminance and ThoughtRiver.

Outsourcing

For in-house lawyers facing budget constraints and overwhelming workloads, outsourcing certain aspects of contract review can be a viable solution. the main advantage of outsourcing is that can be scaled up or down based on demand, providing flexibility to manage peak periods without the need for long-term commitments.

•   Outsourcing Routine Reviews: Routine, low-risk contracts can be outsourced to trusted legal service providers, allowing in-house legal teams to focus on higher-value tasks.
•   Outsourcing Complex Reviews: Plume supports in-house lawyers with contract reviews that require a bespoke approach. Its team of senior, former in-house lawyers are experts in all aspects of contracting, so legal teams can be assured that their contracts are in safe hands.  

Cross-Functional Collaboration and Training

Encouraging collaboration between legal and other departments across the business can improve contract management efficiency. Training non-legal staff on basic contract review principles can help distribute the workload more evenly.

•   Empowering Other Departments: Provide training sessions and guidelines to other departments, enabling them to handle initial contract reviews or identify legal issues.
•   Building a Culture of Compliance: Promote a culture of compliance and awareness throughout the business, ensuring that employees understand the importance of contract terms and conditions.

Continuous Improvement and Feedback Loops

Implementing a continuous improvement mindset within the legal department can lead to long-term efficiencies. Establishing feedback loops and regularly reviewing processes can help identify areas for improvement and ensure that the contract review process evolves with the business needs.

•   Regular Audits and Assessments: Conduct regular audits of the contract review process to identify bottlenecks and inefficiencies. Use these insights to refine workflows and adopt best practices.
•   Soliciting Feedback: Encourage feedback from legal team members and other stakeholders involved in the contract process to gather diverse perspectives and drive improvements.

Managing an increasing volume of contracts under budget constraints is a significant challenge for in-house lawyers. However, legal teams can enhance their efficiency and manage workloads by adopting a strategic approach that includes prioritisation, standardisation, leveraging technology, outsourcing, cross-functional collaboration, and continuous improvement. Embracing these strategies not only alleviates the pressure on legal teams, but also ensures that the quality and integrity of contract reviews are maintained, and risk is appropriately managed across the business.

If you’d like to explore how Plume can help your legal team manage its contract reviews more efficiently, please get in touch!