Version control
What is version control for contracts?
Version control is the practice of tracking and managing changes to documents over time. While it's well-known in the world of software development, version control is just as important when it comes to managing legal agreements.
Contracts often go through multiple rounds of revisions during the contraction creation and negotiation stage (see Contract Lifecycle Management for more information on the 6 stages of the contract lifecycle), and keeping track of these changes is crucial. Perhaps you’ve worked tirelessly on a sales agreement before, only to end up signing the original version of the contract, without the changes you negotiated. Whilst it leaves you empty-handed and frustrated, it also can lead to a serious revenue leakage for the business. Version control systems are tools that help teams manage these changes efficiently, ensuring everyone is working with the latest version.
For many businesses, contracts - like these important sales agreements or HR contracts, are like crown jewels. Protecting these documents from errors and unintended changes is essential. Version control allows teams to track every modification, so if a mistake is made, it's easy to identify, go back, and fix it with minimal disruption.
Why is version control important for contracts?
When multiple people are working on a contract, changes can quickly become hard to manage. One person might be updating terms while another is adjusting clauses elsewhere in the document. Without a system to track these changes, it's easy for work to be overwritten or lost, leading to confusion and downstream issues.
However, it is not only on complex contracts where version control is important. In fact, this idea of a ‘four-eyes’ system (where multiple people are looking over a piece of work) is lost on simple agreements where perhaps one person creates, negotiates, approves, and signs an agreement. It can just as easily lead to mistakes with consequences that can be just as serious.
Version control helps teams avoid these problems by keeping a detailed history of every change made by each contributor - we also call this an audit trail. Basically, it ensures that all modifications to the file are documented.
Benefits of using version control for contracts
- Complete change history: Version control keeps a comprehensive record of all changes made to a contract. This includes who made each change and when it was made.
- Improved collaboration: Teams can work concurrently on contracts without stepping on each other's toes. Version control systems allow for multiple streams of work to happen simultaneously, merging changes smoothly and resolving any conflicts efficiently.
- Traceability and accountability: Every change is traceable back to its source, which is crucial for accountability. This level of transparency helps in maintaining the integrity of the contract and can be vital during negotiations or in the event of disputes.
How to implement version control in contract management?
Good version control software should support your team's workflow without forcing you into a rigid process. It should be user-friendly so that all team members can adopt it without a steep learning curve. At the same time, version control has been commodified and is usually just a feature of a more complete CLM tool, which can require more intense implementation procedures.
There are specialised tools designed for document and contract management that offer version control features. These tools often include additional functionalities like commenting, change tracking, and permission settings, which can further enhance collaboration and security.
Conclusion
Managing contracts effectively is crucial for any business. Version control provides a way to handle changes systematically, ensuring that all team members are aligned and that the contract's integrity is maintained throughout its revisions. By implementing version control practices, teams can work more efficiently and reduce the risks associated with managing important legal documents.
