Contract management vs contract automation: what's the difference?


Legal technology relating to contracts is plagued by jargon. Contract management, contract review, contract workflow automation - each term covers certain parts of the contract lifecycle.

Contract management and contract automation can cause confusion, due to the fact that they address similar needs. This post will clarify what is meant by contract automation and contract management and address the differences between the two types of software.

If you want to see contract automation in action and compare the tools for yourself, hit the button below. But if you want to find out more about how the two contract tools differ, keep reading.

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What is the contract lifecycle?

To understand the differences between contract management and automation, it’s useful to look at the entire lifecycle of the contract first.


Most people create contracts in legacy software like Microsoft Word. Usually, teams will find an older Word document and copy/paste the information, changing the details as necessary. It can be a time-consuming task, especially if the person needs to create several contracts, but there’s a bigger risk of human error when users are manually adding information into the document.


Business contracts don’t sit purely within legal teams - they can involve and affect several parts of the business, including: sales, procurement, finance, compliance, people and talent, and more. In-person collaboration can be challenging now that remote working seems to be the norm. Communication platforms like Slack alleviate this problem, but still run the risk of creating long chains of discussion where key information is lost under the volume of messages.


The same can be said for negotiations with the counterparty, which involve redlining the document. Negotiations are inevitable - rarely does a contract end up with signatures on the dotted lines without going through some changes, unless the document is rudimentary.

With traditional methods of negotiation involving back-and-forth emails and a limited audit trail of edits, it can be challenging to maintain visibility over the contract, and keep track of versions.


When it comes to agreeing contracts, wet signatures are still the go-to - but there’s been a rise in digital platforms that integrate with eSignature tools, offering flexible, mobile-responsive eSigning across any device. This tech has a huge impact on the recipients of most contracts - saving them time and sparing them the laborious process of printing, signing, and rescanning a document.


Post-signature, this category covers storage and management of the document. Most signed contracts live as a copy somewhere in a shared drive, on personal desktops - or even worse, as hard copies in the depths of a filing cabinet. This makes it difficult to keep track of important information, such as key dates and terms agreed between the two parties. It also adds a mountain of due diligence work when companies are approaching funding rounds, for example.


The signature doesn’t represent the end of the contracting process - instead, a multitude of obligations and key deadlines follow for the parties involved. This means teams need a system in place to monitor contracts as they progress through their post-signature lifecycle. A poor system often leads to missed deadlines, resulting in automatic renewals and cost incursions for the company.

Poorly-managed contract process can have a negative impact on the business, given that 80 per cent of B2B revenue is governed by contracts

What is contract management?

Contract management usually addresses the end-to-end contract lifecycle. If you’re looking for contract management software, you’re looking for a provider that can help you manage contract creation, negotiations, signing, storage, and more.

Contract management software enables teams to self-serve on the entire process, both pre and post-signature. Legal teams tend to invest in contract management when contract volumes become impractical to handle in Word and across shared drives. Poorly-managed contract process can have a negative impact on the business, given that 80 per cent of B2B revenue is governed by contracts.

Benefits of contract management workflows

There are several benefits of implementing contract management software:

  • Scalable. Five sales agreements a month seems doable, but when that number increases tenfold, it suddenly becomes a problem. Users rely on contract management to increase the volume of contracts without needing the extra headcount or budget
  • Collaborative. Instead of relying on Word track changes, email chains, and snail mail, teams can use contract management software to apply changes immediately to a live document
  • Searchable. Having a digital system in place means legal won’t need to dig through folders to look for a signed contract - they can access the document with just a few clicks
  • Compatible. Asking colleagues to change their working routine and adopt new software is always a challenge. Fortunately, most contract management software integrates with other common systems, helping teams build a new way of working into existing routines

Find out more 👀

For more information on contract management software, additional benefits and its use cases, check out our contract management software explainer.

What is contract automation?

When we think about contract automation, the phrase is generally understood to mean processes around contracts that lead up to execution. This is everything in the ‘pre-signature’ stage, namely: contract creation, collaboration and can also include the signature stage itself.

Contract automation providers usually help teams address the following questions:

  • How can you improve the way you create contracts?
  • How can you review and redline documents without losing visibility?
  • How can you approve and execute these contracts within a native browser format?

By using contract automation software, legal and non-legal teams can self-serve on routine legal documents at scale, saving time on the most time-consuming stages of the contract process.

The first lawyer at a high-velocity business might face a huge challenge ahead of them - finding out where contracts come from, and how to standardize the process

Benefits of contract automation workflows

Contract automation platforms have several advantages for teams at high-growth businesses:

  • A single audit trail. Contract workflow automation has huge benefits at the negotiation stage - by collaborating and reviewing contracts in a unified workspace, it’s easier for parties involved to scroll through changes and keep track of edits
  • Version control. The first lawyer at a high-velocity business might face a huge challenge ahead of them - finding out where contracts come from, and how to standardize the process. Contract automation platforms can help, so teams self-serve on a single source of truth, reducing the risk of freestyled terms
  • Getting to ‘yes’ faster. Low-negotiation documents, such as NDAs or order forms, shouldn’t take that much time to agree. By automating the way teams sign contracts, and removing the manual print-sign-scan process, the business can agree faster, and save time
  • Less admin work. Automating the contract process means teams can avoid having to copy and paste from old Word templates, saving time and allowing them to focus on the high-value work they were hired to do
  • Data integrity. Most platforms integrate with your colleagues’ system of choice, and two-way data syncs ensure that all the contract information is always up to date. This makes it easier to implement new software without disrupting the way teams work

Find out more 🔎

If you’re looking for more information on contract automation, the benefits, and how to implement automation software, check out our explainer on contract automation.

Contract management vs contract automation: which is best?

When deciding between contract management or contract automation, it's important to consider the scale and pace of your business.

If you're growing quickly, you'll probably find a contract automation tool to be most beneficial, since automated templates and processes enable your legal and business teams to set up a repeatable process for creating, editing, negotiating, signing and tracking your contracts at scale.

Want to find out more about how to automate contracts at scale? Hit the button below.

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