It’s no secret that as your company grows, you accumulate more contracts, and the contracts become more complex. Keeping track of all these agreements and understanding how they all relate to each other can become a daunting task.

Without a system to manage your contracts, you may be risking missed obligations, inconsistent terms, and lost revenue. On the other hand, a well-designed contracts management system saves time and money, mitigates risk, and helps you deliver more value to customers.

You don’t need expensive enterprise software to get these results. By using AI tools and no-code databases strategically, even a lean organization can create a highly functional contracts management system.

Here’s how to design a system that will scale with you and deliver solid ROI — without a six-figure legal tech budget.

Making a System That Works for You

Any contracts management system should store templates – both contracts and individual clauses – in a searchable format. This way your lawyers don’t have to draft from scratch, and your deal team can find approved wording that lets them reach agreement faster. As soon as the contract is signed, your customer support group can get an alert so they can onboard the new buyer right away. Contracts can be organized by customer, date signed, type of product or service, and/or department of your company. These types of basic features should be part of your system from the beginning.

Your system’s unique advantages will come from the way you think about your contracts, since these insights will determine how your system is structured. Here are a few starting points to consider as you design and customize:

• How can the contracts management system help your sales team generate more revenue? You might decide to tag individual clauses so your business development leads can create customer-specific proposals. Or you might track renewal dates so Sales can renew or upsell before a contract expires.

• Can the contracts management system help you identify opportunities for new services or new pricing strategies? Analyzing customers’ requests over time, through multiple contract versions, can yield interesting insights.

• Compliance is a necessary cost of doing business. What data can your contracts management system capture to show regulators and customers that you’re following relevant laws and industry standards?

• Are you planning to fundraise? You might want to organize your contracts in a way that makes due diligence easier, and impress potential investors with your detailed data on recurring revenue and potential profits.

In addition to the whys of your contracts management system, ask your team who will be the main users. Each stakeholder group will benefit from a different aspect of the system:

Lawyers will need documents that have been parsed carefully and tagged accurately. For best results, ask them to weigh in on any AI prompts you use to analyze and label the documents.

The first priority for customer support and compliance will be SLAs, descriptions of services, and any terms referencing applicable laws or industry standards. This wording can be opaque to anyone who isn’t familiar with the subject matter, and sometimes what’s left unsaid can be just as important as what is explicitly stated. It may help to spend some time thinking about how to clarify and standardize these concepts for quick reference.

Sales may want to focus on a few key data points like pricing, payment timing, and renewal dates. Descriptions of different products or services can also help them target compelling offers to potential customers.

If you’re fundraising, investors may want to see the underlying terms of your company’s most important relationships, as well as executive summaries that support your pitch. Churn risk, exclusivity, and renewal metrics should all be readily available.

Getting Started

Once you’ve settled on a strategy, it’s time to choose some tools and begin experimenting. You might start by gathering 10–20 of your key contracts. The initial focus could be on major customers, deals with especially complex terms, or agreements with recurring revenue.

For security purposes, you may want to redact or remove personal data like counterparty names and contact information, or confidential information about products or pricing. Note that some agreements require their terms to be kept confidential, so these should only be uploaded to a system that you control.

Now you’re ready to analyze the key contracts with your preferred AI. Use an LLM or agent to identify types of clauses, and to compare final negotiated documents with your preferred language. The results of this review can be loaded into a database like Airtable, Baserow, or Grist and shared across your company (again, subject to confidentiality obligations). To automate workflows further, integrate the contracts management system with your CRM, your billing system, and your internal messaging platforms.

Your system will need regular maintenance to stay effective. Regular legal and operations reviews will help refine accuracy and keep your database relevant.

Security and Data Privacy

If you’re using AI or cloud tools to analyze and store contracts, make sure they have appropriate security protocols. Look for certifications of compliance with important laws and standards. Your chosen platform should also support encryption at rest and in transit.

Limit who can view or edit your contract database, and use tools that support role-based access. Many cloud providers offer fine-tuned permission control, letting your employees and contractors see and edit only what they need to.

For additional security, consider using an LLM or agent that doesn’t store your content between sessions and doesn’t use it for training. This will let you analyze contracts with less risk of data leakage.

In Conclusion

With the right design, even a lean startup or a small business can build a flexible, information-rich contracts management system. Thoughtful design pays dividends: you’ll be able to close deals faster and be ready when compliance reviews or investor questions come your way.

Need help getting started? Spark + Sterling can help build contracts management systems and improve legal processes without the enterprise software overhead. Please contact us for more information.