Contract authoring is arguably the most important stage in the contract lifecycle management process.

Without it, there’s no contract to approve, edit, or sign!

But contract authoring is about more than simply drafting up a quick agreement. 

A strong contract authoring process leverages modern tools like templates and artificial intelligence and includes risk mitigation protocols and approvals workflows to protect all parties privy to a given agreement.

In this article, we’ll explore the basics of contract authoring. Here’s what we’ll cover:

• What is contract authoring?
• Why is contract authoring important?
• What features or tools are used during contract authoring?
• What software do you use to write a contract?
• Making contract authoring simple with SpotDraft

What is contract authoring? 

Contract authoring is the formal term for the stage of the contract lifecycle where the agreement is written.

In some cases, it may be referred to as contract drafting. The two terms are synonyms.

In modern CLM processes, the contract authoring process is not often one that is started from scratch.

Rather than starting from a blank screen, those responsible for authoring the contract (who are often legal team members but, in some cases, could be sales leaders or business owners) use templates and pre-drafted standardized language to build out agreements.

Contract authoring is also the stage where key terms like delivery dates and the responsibilities of each party are formalized prior to being signed off on.

Also read: Contract Lifecycle Management Process: All You Need to Know

Why is contract authoring important? 

The importance of a solid contract authoring protocol is difficult to understate. The lack of a well-established process here can lead to poorly drafted agreements that slow down approval processes at best and, at worst, put your business at risk of a contract dispute.

However, a good contract authoring process mitigates this risk by using a clause library with standardized language that’s pre-approved by legal.

Then, it integrates with other tools (like your sales CRM) to automatically pull important data into the agreement, minimizing human error.

Another issue that arises as a result of poor or non-existent authoring processes is that key clauses can end up scattered across multiple documents. 

But when contract drafting is managed in a centralized location (the contract lifecycle management process), teams can better organize contract data into a primary agreement with addendums attached and referenced where required.

Also read: Contract Repository: Everything You Need to Know

Lastly, there’s the consideration of workflows to manage contract authoring.

An effective contract authoring process is one that is clearly documented and enforced. 

That is, all team members who are responsible for drafting contracts have access to SOP (standard operating procedure) docs, and automated workflows are set up to ensure they’re followed. 

To execute all of the above effectively, you’re going to need some help from a contracting tool.

Let’s now turn our attention to the features and tools that the best legal teams use to create effective and efficient contract authoring processes. 

Features of Contract Authoring

Templates and clause libraries

Contract templates are a critical component of modern contract authoring processes.

Large organizations may create hundreds of contracts a month when you consider employee documentation, sales contracts, and vendor agreements.

A good CLM tool allows you to build templates with pre-approved terminology, so the relevant team member isn’t starting from scratch or requesting that legal draft up new agreements each time.

For instance, a procurement team member might have a collection of templates for different supplier agreements. They’ll select the relevant document, add key details, and swap out sections from the clause library as appropriate. Then, they’ll seek approval as per your contracting policies.

Which brings us to our next feature:

Workflow automation

Workflow automation helps teams work faster and ensure compliance with internal legal policies.

The most common example of workflow automation in practice is the approvals workflow.

‍“Although a CLM solution might seem costly in the early stages, companies should have it in place and build workflows within the tool to process contracts better. By doing so, they can keep legal costs low in the growth stages and close deals faster. Moreover, they will have clear visibility into the contract pipeline and use their legal resources to optimise workflows better for yielding maximum results.”
~ Igor Poroger, Director of Legal, EMEA, Vectra AI
How CLMs Empower Legal Teams in B2B SaaS Companies

Once a staff member is done drafting up a contract (using a template, of course), it's routed automatically to the relevant manager or legal team member for approval before it gets to the customer or new employee.

Conditional logic can help handle more complex use cases. 

For instance, you might have an internal policy that new vendor contracts with pre-vetted suppliers only need approval from the procurement leader, but the legal team must run a risk assessment and sign off on the agreement for new suppliers.

Also read: What is Contract Automation? Expert Tips & Insights

CRM integrations 

Contract authoring is made a whole faster, easier, and more accurate when data is directly imported from the tools you’re already using.

One of the most important examples of this (and one that’s easy to implement if you’re using a CLM platform) is an integration with your CRM.

By connecting these two platforms, sales teams can quickly import key customer data such as the client’s company name and address, preventing errors during the contract authoring process.

Also read: 6 Must-Have CLM Integrations for Streamlined Workflow and Higher ROI

AI-powered authoring 

Teams focused on efficiency can take all of the above to the next level with an AI-powered contract authoring tool.

Imagine you’re drafting a new sales contract.

Your CRM (let's say it’s Salesforce) is plugged into your contract creation tool, so all of that customer data and deal information is automatically imported.

The correct contract template is selected based on the deal details in Salesforce, and it's pre-populated with the right clauses based on the value of the deal, the industry and locality the client is in, and the plan you’re selling them.

After double-checking that all of the details are correct, you send it over to the right approval authority using your automated workflow. 

Once they’ve signed off on it, it gets delivered to the client, who, of course, approves the agreement with an eSignature.

Also read: Unlocking the Potential of AI in Contract Drafting: Enhancing Speed and Compliance

The contract authoring process

To learn what contract authoring is all about, it’s key to understand how contracts are written. Here’s a quick look at the typical process businesses follow.

Know Your Contract’s Purpose

Before writing a contract, get clear on what it aims to achieve. What's the goal?

Once that’s set, determine the necessary terms to meet this goal. What kind of contract is it? Which key points will protect everyone involved?

Understanding these basics is crucial before you start drafting.

Put Pen to Paper

If you stick with the traditional approach, you’ll likely start drafting your contract in Microsoft Word. You might build it from scratch, drafting each clause, or use a template.

When working with a template, you’ll select relevant clauses, copy them into a new document, and that becomes your draft. But every contract is unique, so you’ll still need to tweak sections to ensure it’s tailored and airtight.

This manual process can get repetitive, especially if you manage many contracts. That’s why more businesses are turning to contract authoring tools, which make the process far more efficient. 

Filling the Gaps

An essential step in contract authoring is filling in the blanks. Manual workflows often struggle with this; contract documents need personalized details like party names, addresses, and contact info. You'll also need to include specifics like pricing, payment methods, and effective dates.

Accuracy is crucial here. Any missing or incorrect details can hurt the contract's performance or even lead to a breach later on. So, double-check everything!

Review and Approval Process

After drafting the contract clauses, review and tweak it until you're satisfied with the first version. This step is crucial before sharing it internally for a more thorough review.

Challenges of contract authoring

Most contract authoring processes face the same hurdles, and they are:

“One of the revenue leaders I worked with told me, "Time kills all deals; you gotta close deals fast," and I keep this in mind every time I’m pulled into a sales deal.” 
~ Sue So, Head of Legal, Hopin
Commercial Contract Management in Hypergrowth Startups

• Time-consuming admin: Starting from scratch and manually entering details makes contract creation slow, especially for small legal teams.

‍”Another problem we face in contract management is version control - different departments may be using old templates and rolling contracts out manually. We want to implement a CLM solution to have better visibility into our contract pipeline, especially when our business is scaling in different countries.” 
~ Bhavna SinghGC and DPO at Subex Limited

• Lack of control: When business teams freely draft contracts in tools like Word, legal teams lose oversight on terms and wording.
• Error-prone: Manual processes increase the chances of mistakes when copying and pasting from static templates.
• Not scalable: As your business grows, so does the need for efficient contract creation. Manual methods simply can’t keep up.

What software do you use to write a contract? 

So, what type of software can be used for contract authoring?

“It's good for a SaaS lawyer to be tech-savvy because it helps to know what tools are at your disposal and how to use them best. Go to the people who know how to use these tools well and ask them if it's possible to set up the workflows/automations you want within them.”
~ Sue So, Head of Legal,Hopin
‍Commercial Contract Management in Hypergrowth Startups

At the most basic level, free tools like Google Docs can be used to draft contracts. Then, you can download the agreement as a PDF document and sign it using Preview or Adobe Acrobat.

However, this method isn’t exactly the most secure nor the most user-friendly.

Moving up a level in complexity and security, you’ve got contract drafting tools like ClauseBase. These platforms work in templates and AI-powered drafting to improve the contract authoring process.

Unfortunately, they lack a more holistic vision of contract management. 

They are focused purely on the authoring stage and tend to ignore other important aspects of the contract lifecycle like redlining and renewal management.

For this reason, the most effective legal teams use full-scale contract management software, like SpotDraft.

These contract authoring software are more well-rounded, with features that cater to contract authoring and more:

• Signing via eSignature
• In-platform redlining
• Renewal reminders
• In-depth reporting and analytics 

How to simplify contracting as explained by Sarah Fox, Speaker & Consultant | Source: LinkedIn 

Also read: 8 Top Contract Management Software Platforms

Making contract authoring simple with SpotDraft 

SpotDraft's contract management platform allows teams to easily collaborate on contracts at every stage of their lifecycle, offering documented version control and easy accessibility.  

Get off the ground quickly with pre-built templates or import your own Microsoft Word documents and convert file types directly in the platform.

With an AI-powered authoring suite, you’ll draft contracts and have them signed off in no time.

Discover for yourself. Book a demo with SpotDraft today.

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