Legacy contracts are legally binding agreements that are either active or have matured. They are very important to any type of company as they contain quite a bit of information about past decisions that could be pertinent to future strategy. As the legal space becomes more dependent on technology, many firms are migrating their processes and documents onto one database of sorts, such as contract lifecycle management (CLM) systems . It is important that legacy contracts are not forgotten during this shift.
A major challenge for many organizations is that they still have thousands of active contracts that they cannot quickly access or retrieve because they are scattered across multiple locations. Very often these contracts are also in multiple formats, from paper-based to electronic.
Migrating legacy contracts from numerous storage types into a structured, searchable database, like a CLM system, has a few advantages.
All documents are in a central repository
The biggest benefit of moving legacy contracts into the CLM is that they are all in one place, alongside newer contracts. This means that all documents can be accessed easily and quickly through one centralized platform by multiple people. This can save a significant amount of time and effort for a company. Legacy contracts are often in different formats and locations, which makes it time consuming to find particular clauses or information.
When legacy contracts are all migrated on to a single platform, it becomes easy and efficient to ensure compliance with the various obligations stated in contracts. Companies can keep track of upcoming dues, payments, and other details without going through multiple documents or using unnecessary manpower. Contracts retrieval to check for specifics also becomes simpler.
Efficient risk mitigation
When all contracts are in a centralized location, companies can use flagging options to put in place reminders or warnings regarding non-compliance of terms. Companies can continually monitor various legal, financial, and regulatory risks within contracts to minimize potential risks. Migrating legacy contracts ensures that they aren’t missed, thereby possibly losing out on revenues.
Bringing legacy contracts into the CLM system means access to a lot more information, which in turn can help companies make forecasts regarding the business with greater accuracy. This can aid not just better strategic initiatives for the company but also better negotiating power for new contracts. It can even help reduce the overall costs and expenses associated with contracting.
Reporting and notifications
Migrating legacy contracts to a CLM system offers companies the ability to create automated triggers for actions critical to the business and requiring urgent attention. This could be reminders of upcoming renewals, payment dues, and other milestones.
Overall, having access to legacy contracts in one place can prove to be cost-efficient, to save time, and to streamline the decision-making process.