Legal Analytics and CLM: Creating Value by Working Together

Legal analytics has revolutionized contract lifecycle management (CLM). A recent blog post on Cobblestone’s website addresses common questions about how legal analytics and CLM benefit each other.

What are legal analytics?

Legal analytics involve collecting and analyzing contract data, and include metrics like total contract numbers, average values, budget trends, and yearly spending comparisons.

How do legal analytics benefit CLM?

• Risk mitigation: Contract clauses that have led to conflicts can be identified by analyzing historical data. Risks can be mapped and assessed, ensuring compliance and reducing legal disputes.
• Contract performance evaluation: Analytics reveal key performance metrics such as contract cycle times, renewal rates, and dispute outcomes.
• Cost reduction: Analytics also identify inefficiencies in contract management, leading to cost savings by optimizing workflows and resource allocation.
• Contract negotiation support: By analyzing historical negotiation data, negotiation strategies that yield favorable outcomes can be developed.

How does CLM software enable legal analytics?

• Data extraction and organization: Software tools allow structured data extraction from contracts, enabling effective analysis and standardized template creation.
• Advanced searching and reporting: Users can perform detailed searches and generate reports based on specific criteria, enhancing data-driven decision-making.
• Data visualization: Visualization tools like dashboards and graphs make complex data more understandable, helping identify trends and outliers.
• Integration with external data sources: Integrating with systems like ERPs and CRMs enriches contract data, providing a comprehensive view for more accurate assessments.

What are the common challenges in implementing legal analytics?

• Data quality and availability: Ensuring accurate, complete, and up-to-date contract data is critical for reliable insights.
• Data privacy and security: Protecting sensitive contract data necessitates robust security measures such as access controls, encryption, security attestation, and compliance with data privacy regulations.
• User adoption and training: Effective use of legal analytics tools requires training for legal professionals.

How does legal analytics revolutionize contract management?

Legal analytics transform CLM by providing insights that mitigate risks, evaluate performance, reduce costs, and enhance negotiation strategies. Organizations can overcome challenges with proper data management, security, and user training.