Why centering your contracting transformation on technology can lead to its failure (and how to stop this)

Nearly 70% of Chief Legal Officers (CLOs) planning to invest in technology over the next 24 months will invest in new or updated contract management tech, according to the 2023 ACC Chief Legal Officers Survey.

Still, Gartner predicts that by 2025, corporate legal departments will capture only 30% of the potential benefit of their contract life cycle management (CLM) investments.

Better contract management is clearly a priority for in-house legal teams – and one that they’re willing to invest in, but those investments rarely live up to their full potential. Why?

For most organizations, the fundamental issue comes down to an overly simplistic view of the contracting ecosystem.

Common view of the contracting ecosystem

In many organizations, “contracting transformation” and “CLM tech” aren’t just mutually inclusive, they’re virtually synonymous.

It’s easy to see why: CLM software promises tremendous improvements – if successfully implemented. So, for many teams, the contract ecosystem equals CLM tech. With stories of failed CLM tech implementations so common, many have adjusted their view of contracting to include a thin layer of process (but only those decisions immediately surrounding tech, like workflows, templates and playbooks).

Legal departments endeavoring to transform contracting are generally guided by this viewpoint, tempted by the promises of AI silver bullets, and it severely limits the (necessary) scope of their project.

A broader view of the contracting ecosystem

Because the common understanding of contracting is too narrow, “contracting transformation” often falls short of anything remotely transformative.

A broader view of the contracting ecosystem must consider the approach to work, contract artifacts, contract data, people, and culture in addition to tech and a more comprehensive understanding of process.

These inputs help inform a target operating model – a vision of contracting built on a clear understanding of demand and supply capacity, guided by the objectives of stakeholders across the organization.

Why consider all contracting inputs during contracting transformation projects?

In instances where bad contracting processes lead to consequences, the tech is rarely the central issue. Failed CLM tech implementations are generally derailed by deep-rooted, systemic issues, such as departmental silos or bad contract data (no surprise given that the average organization holds commercial data in 24 different systems).

The cost of poor contract management

Poor contract management costs companies 9% of their bottom line, so it’s little wonder that so many teams are eager to improve. Tech solutions have sold many in-house legal teams on the promise of “plug and play” improvements, but reports on CLM suggest that transformation generally takes at least 12 months – and often much longer. alarmingly high rates of CLM tech implementation failure (and the fact that 30% of legal departments who currently have contract management software in place acknowledge that it is underutilized) tell us that CLM software isn’t a silver bullet.

Technology is a powerful enabler, but only if it’s implemented thoughtfully as part of a larger strategy – it can’t solve operational issues. When organizations approach contract transformation from too narrow a viewpoint, they don’t realize that they should be considering broader issues at all. The larger, critical context goes unseen.

Better contract management helps mitigate risk, save money, and generate revenue faster. But achieving a contracting target operating model takes planning and legwork, which can only begin once a broader perspective is established.

Designing a contracting target operating model

Designing a target operating model starts with an assessment of the current state of contracting to understand capabilities and uncover opportunities for improvement.

Before this assessment can begin in earnest, it’s important to do some early legwork. Take the time to complete initial tasks like developing a project plan, identifying key stakeholders, and collecting project data. This is particularly important in industries where a large percentage of the workforce is involved in contracting – such as telecoms, where the average organization involves 26% of its workforce in contracting. Not only is it more difficult to identify key stakeholders in these instances, but it’s also easier to forget someone.

Assess the contracting current state

With a plan in place, teams can analyze data and stakeholder needs (through interviews or questionnaires), define and prioritize pain points, and conduct root cause analyses. Because so many organizations know something is causing issues within their contracting ecosystem, but few have clarity on exactly what that is, a root cause analysis is a critical step in connecting the dots.

At the end of the assessment, organizations are left with greater visibility into the current state of their contracting, including a view of process, operations, pain points and underlying causes.

Understanding the current state is vital. As the saying goes, you don’t know what you don’t know. Less than 11% of organizations view their existing contracting process as very effective, so it’s clear why many teams want (or need) to improve contract management. But without an understanding of the starting point, they can’t see where breakdowns are occurring or how much improvement is truly possible.

With the current state established, design of the target operating model through future state visioning can begin. This involves efforts such as conducting a future state workshop and identifying barriers to achieving the desired future state, then assessing and simplifying the path to the desired future state (including with respect to CLM tool functionality).

Establish a contracting capacity model

A key part of target operating model design is understanding and quantifying both demand and supply – the “why, how and what if?” behind both sides of the equation. This process entails some further examination of the current state. Ask questions like these around both the supply and demand sides to create a capacity model:

Demand side questions to identify contracting capacity:

• Is all current contracting necessary?
• What are the demand flows?
• What segments and types of contracts?
• What quantitative measure of complexity drives resource matching? How is this being done today?

Supply side questions to identify contracting capacity:

• Where, how and by whom is contracting done?
• What are the productivity metrics? Is this optimized?
• How will technology affect productivity?
• How do low-touch and no-touch contracting assumptions affect the capacity model?

A clear capacity model better illustrates future state potential, and the gap between that vision and the current state.

Envision the target state and map a path

A target operating model is driven by a number of inputs across the contracting ecosystem, each of which bring benefits that grow more pronounced when they build off each other.

This marks an opportunity to prioritize changes and identify quick wins. For example, if an organization realizes that all current contracting is not necessary, or that expensive resources are currently handling low-complexity contracts, they may find opportunities to affect change and realize savings quickly.

From here, organizations have enough information about their starting point, target operating model and potential roadblocks create a map that links the current state of contracting to the future state vision.

Depending on the current state and target operating model, this roadmap may include improvements, negotiation artifacts, process flows, technology enablement and change management.

Achieving the target operating model

Once developed, implementing the contracting target operating model requires three key workstreams: artifact development, contract management system (CMS) enablement and data migration.

Updating contract artifacts

During artifact development, teams can leverage the information gained throughout the assessment and planning process to update their master service agreement (MSA) or other primary agreement templates. With these foundational artifacts in place, teams can update ancillary documents and finally, develop a playbook.

As part of this workstream, teams can harmonize or consolidate remaining documents to work alongside the new MSA. They will also develop an index of provisions for their clause library, which supports the creation of playbooks inclusive of rationale for standard risk positions, acceptable fallbacks and use-cases, escalation protocol and more.

Selecting the right CLM technology

Part of CMS enablement may involve selecting CLM technology. It’s important to leverage a complete understanding of user and system requirements to select a solution with features that align to stakeholder goals.

But of course, even an ideally suited CLM tech solution is only one piece of the puzzle. A data hygiene plan, which focuses on ensuring the data going into the new system is correct (and correctly formatted), and a system to ensure more seamless, widespread adoption help ensure that the tech does its job as an enabler of process.

Migrating (clean) data

Given that bad contract data is one of the main roadblocks that ruins CLM tech implementations, a carefully considered contract and data migration plan is critical once technology has been selected. As part of the contract and data migration process, teams must create a data hierarchy and metadata validation report to better understand the value of their contract data (and to ensure that it is complete), followed by a migration plan (outlining details like who will do it and when it will be done).

By completing efforts like metadata cleanup and contract clause analysis to ensure that contract data is being leveraged properly and consistently, organizations achieve a clean, complete, easily searchable, de-duplicated and properly tagged document corpus in their selected CLM technology platform.

These steps support the journey from current state to target operating model. But once achieved, the TOM still has to be maintained – much like any optimized state of being, it requires upkeep.

The value of holistic contracting transformation

If the risks of too narrow an approach to contract transformation are wasted investments, organizational incongruity and ongoing revenue leakage, then the benefits of a broader view are just the opposite.

What’s more, when a contracting target state is achieved, work is aligned with the resource(s) best suited to handle it.

Contracting transformation case studies

The assertion that a holistic approach to contract transformation drives results isn’t conjecture – it’s based on years of experience.

For example, a multinational healthcare company engaged Factor to support procurement contracting transformation. At the time, the team handled 4,500 contract requests per year, but the process lacked oversight and standardization.

By designing – and continuously optimizing – a streamlined contracting process, Factor now supports 6,000 contract requests per year for this company while achieving a 25% reduction in cycle time.

In another instance, a Top 3 Management Consulting firm engaged Factor to assess current contracting processes, desired future state and complete a root cause analysis for the implementation of contract lifecycle management technology. As part of this process, Factor completed a large-scale document review across a variety of document types, including MSAs, SOWs, NDAs and more. We uncovered and provided qualitative data on issues that must be resolved before CLM tech can be implemented, avoiding a failed implementation.

In still another example, an educational publishing company was looking for cost savings, associated process improvements and operationalization. Factor introduced self-service contracting for lower complexity contracts – with the right tooling and training, they are now executed by business managers, contract owners or purchasers. This speeds up time to contract for business stakeholders and increases capacity for higher complexity, strategic contracts.

Additionally, we have helped the legal team refine templates, create playbooks and train their team members to enhance their contracting capabilities. As a result, the organization has seen 35% shorter cycle times across all procurement categories.

There’s no denying that technology is a critical part of modern contracting, but organizations that zero in on CLM and gloss over the bigger picture sow early seeds of failure. If a contract transformation project is a key objective for you, start by shifting your perspective – take a broader approach and realize faster results.

For more on how to drive the greatest impact from your contract transformation project, get in touch.

Contract management represents one of the largest resource drains for organizations of all sizes.

The American Bar Association tells us that “a typical Fortune 1000 company manages between 20,000 and 40,000 active contracts at any given time, at least 10% of which are misplaced, difficult to find … or otherwise unmanaged or forgotten.”

Drilling down into the details of the contract management challenge, the situation appears even worse. A 2022 DocuSign survey of more than 1,300 contracting professionals worldwide revealed that:

• Contract professionals take 45 minutes on average to find a completed contract
• 46% of respondents have been unable to locate a contract
• It takes an average of 84 minutes to find specific information within a contract
• 68% of respondents need to access completed contracts at least weekly

The challenge is acute, even for moderate-sized teams. On average, it takes 30 hours of staff time to generate, negotiate and locate a contract. For a mid-sized organization that manages around 500 contracts a year, that works out to 7 full-time employees worth of annual labor.

Fortunately, a digital, centralized contract repository has proven highly effective at improving efficiency of an organization’s contract operations and reducing the number of hours organizations waste searching for contracts.

What is a digital contract repository and why do you need one?

In the simplest terms, a contract repository is a place where contracts are stored. Today it has evolved to mean a centralized, cloud-based storage system for completed agreements. To be most efficient and productive, a contract repository must be searchable by extracted fields and key terms. It also must be easily updated with contract amendments, renewals and legal/regulatory changes. It is a living, breathing tool rather than a static location.

Often the commercial contracts team in the office of general counsel is encumbered by inefficient document generation, review, management and storage processes. Before a signature, in-house attorneys and contract managers are shackled to manual workflows and disconnected systems for negotiating, reviewing and approving contracts. After completion, there are new problems that arise related to managing renewals, obligations and risks. Part of the difficulty lies in not knowing where contracts are kept and part of the problem is the lack of searchability for key data.

According to Gartner, contract generation, negotiation, review and approval can take up to half of a law department’s time. In addition, siloed functions and departments make it harder for legal departments to manage and locate the thousands of agreements and contracts held throughout the organization. Moreover, the office of general counsel is charged with ensuring that proper security and confidentiality are maintained with permission-based, need-to-know access.

Traditional contract storage systems, such as general-purpose tools like Microsoft Sharepoint or a shared drive, represent an unbalanced and inconsistent approach to risk and obligation management. A centralized digital contract repository introduces advanced collaboration features, which quickly improve transparency, efficiency and information security.

A digital contract repository solves many common legal and business challenges

A modern digital contract repository can address many of these pain points, accelerating the contract lifecycle and reducing the burden on staff by:

• Speeding up contract location: With a single source of truth, finding contracts doesn’t have to take hours.
• Reducing the number of systems used: Eliminate the need for constant “swivel chairing” among multiple systems and applications where contracts may be stored and managed (including Microsoft Word, email, SharePoint, shared drives, CLM and CRM solutions).
• Simplifying handoffs among multiple parties: Simplify legal review, negotiations, approval and signature.
• Monitoring of existing contract provisions: Track obligations and treat contracts as codification of business relationships.
• Identifying current vendor relationships: After signing or during contract creation, easily identify prior contractual relationships with the counterparty or with a competitor.
• Screening for nonstandard terms and clauses: Quickly comply with requests to identify current contracts containing provisions such as nonstandard payment terms, force majeure clauses or nondisclosure language.
• Fostering remote working relationships: Empower employees with centralized, online access to templates, ensuring consistency and providing access to a broader wealth of resources.
• Providing multiple departments with real-time access: Legal departments often don’t have permissions to use Salesforce, which limits their ability to access contracts and other critical documents and With CLM’s built-in Salesforce integration, legal, sales and other key functions gain real-time access to contracts.
• Standardizing common sales agreements and contracts: Reducing variance among common documents (like NDAs) will reduce legal/finance intervention and minimize manual review.

A “crawl-walk-run” approach to implementing CLM

While eSignature has changed the way that many organizations execute a contract, there is often not a clear path to a CLM solution that can tame the growing complexity before and after signature.

Fortunately, organizations can introduce the time-saving efficiency of a modern CLM in a modular, step-by-step deployment with DocuSign CLM that adapts and grows as your needs evolve. For smaller businesses, DocuSign CLM Essentials is a great first step to simplify contracting processes. As you grow, you can access AI-powered contract analytics and enable real time activity tracking with DocuSign Monitor for CLM.

Our experts can help your team map out plans for an audit, implementation, training integrations, change management and continued support throughout adoption.

The CLOC Global Institute (CGI) 2023, held from May 16-18, became a pivotal moment in the corporate legal landscape. With months of meticulous preparation leading up to the event, we were determined to ensure that every attendee derived maximum value from their experience. In this blog post, we reflect on and highlight our participation and the insights gained from the conference.

From the moment the dates for CGI 2023 dates were announced, our team embarked on a six-month journey of detailed planning. As the conference drew closer, excitement grew, and we eagerly embraced every opportunity it presented. We actively participated in the sessions, attended various events, and thoroughly explored all that the conference had to offer.

CGI 2023 reaffirmed for us the dynamic nature of the legal operations function, with the professionals consistently striving to enhance their knowledge and skills. We were delighted to witness the overwhelming response to our panel discussion on “Building a World-Class Legal Ops Function.” The session attracted a full house and then some more, underlining the spirit of knowledge within the legal ops community. To complement the discussion, we launched our playbook, “Operating in Lean Times,” which resonated strongly with attendees seeking innovative strategies to do more with less.

The remarkable engagement we witnessed at our booth and the enthusiastic participation in our curated activities affirmed a crucial trend: companies now recognize the significance of Contract Lifecycle Management (CLM) more than ever before. The substantial footfall at our booth and the engaging conversations with attendees showcased a collective awareness of the value that effective CLM brings to businesses. It was truly heartening to witness this growing awareness throughout the conference.

While the conference was undoubtedly a platform for professional growth, we also recognized the importance of fostering connections and creating moments of enjoyment. To strike this balance, we organised a networking evening called “Sundowner with SpotDraft.” This memorable event allowed legal operations professionals to relax and forge meaningful connections in an informal setting.

As we bid farewell to CGI 2023, we carry forward the enthusiasm, lessons, and inspiration, eagerly awaiting future editions of this conference. Our team at SpotDraft is committed to continuing our contributions to the legal operations community, fostering innovation, and sharing valuable insights.

The 2023 CLOC Global Institute provided a great opportunity to connect with legal operations professionals and listen to them talk about what they are looking for in their legal ops solutions. We were also pleased to host a panel session called “Reaching the Summit on Legal Spend” featuring Ryan O’Leary, Research Director, Privacy and Legal Technology at ICD and Stacy Lettie Chief of Staff to the GC and Director of Strategic Planning at Organon, along with Jeff Solomon, our Vice President and Segment Leader for LegalVIEW® BillAnalyzer.

For those who were not able to join us, we’re summarizing a couple of highlights from the session. Among the topics our panelists covered, three of the most compelling for the audience were the discussions on billing guidelines, vendor management, and artificial intelligence.

Billing guideline enforcement

Billing guidelines are an important tool for legal departments seeking to control costs and maximize outside counsel value. When beginning the effort to improve enforcement, legal teams should consider benchmarking their guidelines against industry standards. This can help identify areas where the current guidelines may be lacking. Improving the guidelines themselves will help improved enforcement to deliver even more value.

Legal organizations should also carefully evaluate historical invoices to truly understand what outside counsel firms have been billing for and how well that conforms to the guidelines. This can be a time-consuming project, but it is very important to fully understand the starting point in order to measure the success of the improvement effort later on. The output of this analysis will also be helpful in opening a dialog with law firms about their level of guideline compliance and where they should focus in order to improve it.

Vendor management

An effective program of vendor management leads to positive law firm relationships and well-managed legal spend. Here are two of the keys to successful vendor management, emphasized by our speakers.

Law firm panels: Consolidating the legal department’s work with a select list of firms is essential because it allows the corporate legal team to leverage their spend and improve their buying power. Panel creation is the ideal opportunity to pre-negotiate rates and to ask for the billing discount you want and expect.

Vendor scorecards: Legal operations teams should use a scorecarding tool that facilitates law firm evaluations based on outcomes, as well as more nuanced traits such as billing practices, feedback from business partners, diversity trends, and budget performance. Legal professionals should use these scorecards in annual or biannual meetings with firms and should use them to conduct apples-to-apples comparisons of all the firms they engage.

AI in legal ops

Our speakers encourage the use of artificial intelligence but recommend a well-thought-out approach to the technology. For example, generative AI can be helpful to some legal professionals, but users should never enter sensitive data into large language models (such as ChatGPT) because there is no way to be certain that the service provider will keep it safe.

Also, their recommendation is to look for opportunities for AI to improve existing processes and programs, rather than assuming AI should be leveraged everywhere in the legal department. They suggest developing a gap analysis that can help flag those areas where the organization can get the greatest benefit for the most modest investment.

We are grateful to our guests Stacy Lettie and Ryan O’Leary for helping to make our time at the 2023 CLOC Global Institute such a success. Thanks to everyone who joined us!

About Wolters Kluwer ELM Solutions:

Wolters Kluwer ELM Solutions is the market-leading global provider of enterprise legal spend and matter management and legal analytics solutions. It provides a comprehensive suite of tools that address the growing needs of corporate legal operations departments to increase operational efficiency and reduce costs. Corporate legal and insurance claims departments trust its innovative technology and end-to-end customer experience to drive world-class business outcomes. The company’s LegalVIEW® Bill Analyzer leverages both artificial intelligence and human expertise to help increase legal billing guideline compliance.

“How do I know I’m getting a good price from my law firms?”

Traditionally, that type of data simply hasn’t been available to in-house teams or firms — a fact that causes widespread discrepancies in cost across the legal industry.

In this article, we’ll show you a process PERSUIT uses to find what we call the “true market price” for a legal matter.

It may seem counterintuitive, but finding a true market price makes the price less important when you select your firm for a matter. By doing so, you can empower your team to better manage risk by choosing the best firm — not just the one with the best rate.

What is a True Market Price?

A “true market price” is the average transaction price that buyers and sellers can commonly be expected to agree upon for a particular good or service. But without transparency and competition within a market — like in legal services — it’s difficult to discover what a true market price actually is.

In legal, that’s starting to change.

In-house teams are under pressure to demonstrate their value to the business more than ever before — and to justify and document their decisions around external spend.

For all these reasons, legal teams are increasingly adopting a new process for engaging outside counsel — one that introduces transparency and competition so a true market price can emerge.

A Four-Step Process to Find the True Market Price for Legal Services

At PERSUIT, we teach in-house teams a process they can use to determine a fair market price for legal services.

Here’s how it works:

Step 1: Segment the matter by milestones and deliverables

Most legal work falls into repeatable patterns. You may not know exactly how a matter will go, but you know the types of activities that often happen.

For example, in litigation, you know there will be depositions, even if you don’t know exactly how many you’ll need. Nearly any matter can be broken down into predictable phases and activities to arrive at the “deliverable” or outcome.

In our litigation example, those milestones and deliverables would include depositions, discovery, pre-trial, trial, appeals, etc. The same concept can be applied to advice or transactional matters as well.

The same holds true even for complex matters such as IP litigation. Certain phases and types of work, like claim construction and the Markman hearing, can be scoped and outlined. It will take some up-front investment, but the process will yield a better environment for competition and transparency with your firms.

Having a library of pre-built templates for many types of matters also helps make the scoping process significantly easier.

Step 2: Invite preferred firms to submit proposals

After you’ve scoped your matter by phase, invite three to four of your preferred firms to submit proposals detailing how they’ll approach the work.

Ask them to submit their price estimate, a summary of how they’ll approach the matter, and any other information you’ll consider when awarding the work (DEI, relevant experience, etc.)

If you’re doing this manually, you can send emails inviting the proposals. Or use a firm relationship platform to simplify the process.

When appropriate, some companies invite bidding firms to ask questions and further scope the matter, helping you ensure a true “apples to apples” comparison when you receive proposals.

Step 3: Use a competitive process

Sometimes, the proposals you receive will have similar price quotes.

In those cases, the competitive RFP process — on its own — has revealed a “true market price.” This gives you confidence that you’re not overpaying for the matter.

There are other cases where you’ll receive proposals with price estimates that are wildly different. In that case, you can’t know if the prices you’re looking at are a true “market price.” It may be that the firms simply don’t know what other firms are charging for similar types of services.

In this scenario, the process we recommend is a “reverse auction” — a competitive process where you set a time window, show the price quotes (or their rankings) you received from firms, then give those firms a chance to revise their price quote.

This is usually done as a live event with a time limit between 30 minutes to an hour.

Here’s an illustration of a real reverse auction taken from the PERSUIT platform.

At the start of the auction, there was a $1.275 million spread between the highest-priced quote and the lowest.

One hour and six minutes later, the price spread had narrowed dramatically, with all four firms having price quotes within $270,000.

In this case, the “true market price” is about $1 million — the price the firms are grouping around at the end of the auction.

Step 4: Choose the firm you think has the best chance of giving you the result you need

At the end of this competitive process, you and your team can evaluate the proposals and make a choice about who to work with for the matter.

It may be counterintuitive, but a competitive process actually makes price less of a factor when choosing a firm.

At the beginning of the auction illustrated above, there was little chance that an in-house team could justify paying an extra $1.275 million to engage with the highest-priced firm competing for the work — unless it was a “bet-the-company” type matter.

By the end of the auction, however, the bid spread had been reduced to only $270,000 between all four firms; even less between the top three.

With the emergence of a true market price for the matter, the decision becomes less about price and more about who is the best team to manage the relative risk and drive the right outcomes.

The Payoff: Make Price Matter Less When Selecting Outside Counsel

Our internal data — which includes over $8 billion in proposals and $1 billion in legal work awarded through the platform — show that time and again the competitive process detailed above takes large price differences out of the equation.

By driving firms closer to a consensus price, or true market value, cost becomes less of a deciding factor than in a traditional RFP process. This price convergence empowers in-house teams to move beyond price in deciding which firm is the best fit based on the things that really matter — experience, strategic insights, diversity and ESG metrics, and more.

You can read more about the benefits of competitive sourcing in our recent report, 5 Myths About Reverse Auctions in Legal. You can also hear about how competitive sourcing strengthens the relationship between in-house teams and their firms in our webinar featuring Gopal Burgher, partner at BurgherGrey, and Kimberly Williams, head of Legal Operations at SMBC.

Ready to uncover the true market price for your matters? Sign up for a demo today.

PERSUIT is used by the world’s leading in-house legal teams to engage outside counsel in a way that’s more fair, more objective, more diverse, more equitable, and more effective for everyone involved. Learn more about PERSUIT.

As digital transformation continues apace across organizations, contracts are gaining more and more attention as an area crying out for automation and data. One leading technology advisory firm reports significant and continued year-over-year growth in inquiries around contract lifecycle management (CLM) as companies grapple with ongoing market disruptions that impact their contractually defined commercial relationships. 

For legal operations, this focus on contract technology can be a double-edged sword. Legal is heavily involved in contracting (naturally), and, in theory, contract technology should make contract processes faster and easier for law departments and for the benefit of the entire enterprise.  

In practice, however, two common challenges emerge: 
 
In some cases, legal teams get put in the proverbial back seat with contract transformation efforts when other departments take the lead in choosing a solution that works best for their use case—one system for procurement contracts, another for sales, a third for corporate contracts like NDAs. Legal is left jumping between disparate systems for reviews, approvals, template management, etc. 

In other cases, legal teams take the lead on contract transformation in their organizations but focus on what the technology can do for legal, not the rest of the company. Little surprise, this approach leads to solutions gaining little to no adoption from other departments that generate the agreements.  

Both these outcomes point to the unique challenge contracts present when compared to other legal processes: they require input and cooperation from across the enterprise. One report, from World Commerce & Contracting, suggests that 25% of a company’s workforce plays a part in managing contracts. Ostensibly, that means any contract management system should be accessible and enabling to a quarter of a business. No small feat! 

The good news is that it can be done. The better news is that legal operations professionals are in the best position to make it happen.  

In one of my favorite examples, the legal operations department at a major technology company worked with its procurement and IT teams to stand up a contracting system that 220,000 employees could access to self-service sourcing contracts. These users are generating 150,000 SOWs a year with little to no help needed from expensive legal resources.  

Key to this successful deployment is the teamwork shown by the legal operations team. They engaged outside stakeholders early and often, understanding what their users need and how they can support them. To borrow a phrase from John F. Kennedy, they asked not what CLM could do for legal, but what legal could use CLM to do for the enterprise. 

This enterprise focus goes right to the heart of CLOC’s description of the desired state for technology:  Create a clear technology vision that spans all of the needs of your organization” (emphasis mine). 

From this and other success stories, three important considerations emerge for legal operations teams that want to drive successful contract transformation efforts across the enterprise: 

1. Listen & Learn: A successful team should work to understand what matters to other departments. Each division will have its own frustrations with contract processes, will see different risks, and will have a wide array of opportunities. A successful blueprint depends on accurate information, which in turn comes from a thorough survey of needs and requirements. 
    

2. Integrate: Integration is the key to widespread adoption. It’s much easier for departments and teams to adopt new solutions when the technology is presented in tools they already use. For legal, this might mean Microsoft Word; for procurement departments, it might be Ariba; for sales teams, Salesforce. Notably, integrations are often overlooked in CLM projects – a recently survey of hundreds of legal operations professionals found that only 1/3 had integrated their CLM into other systems. 
    

3. Align on KPIs: Nothing builds momentum in digital transformation like showing improvements in the areas that matter most. When the team knows which KPIs to measure first, analyzing data can provide definitive results. For example, procurement might say their biggest pain point is the delay in getting suppliers under contract. If so, have the team measure how contract turnaround time improves. When stakeholders can see the immediate benefits of digital transformation, they become CLM champions.  

Contracts don’t stay inside the four walls of the legal department, and neither can any digital transformation effort aimed at gaining value and efficiencies from these critical documents. With the right cross-functional approach, legal operations can get in the driver’s seat for a consequential digital transformation project that will pay significant dividends for the entire organization. 

To learn more about your legal operations peers are addressing the challenges and opportunities facing them today, access this free copy of the 15^th annual LDO Survey. 

The role of legal operations is having its well-deserved moment in the spotlight. There are wide-ranging benefits of adding this team of professional efficiency drivers to your legal team. Publishing firm Legal 500 also pushes General Counsels (GCs) to “unbundle internally” – and establish a legal operations department to improve planning, technology, communication, and financial management – everything beyond giving legal advice.

The advantages are clear, but it’s challenging to go from creating a legal ops team to building one that runs like a well-oiled machine. In this blog, we’ll cover principles that will transform your legal ops team. Let’s dive in!

Build bridges within your business with legal ops.

Communication gaps erode performance. Enterprises often experience these in two areas: financial reporting and sales cycles. But a well-tuned legal ops function bridges these divides.

Financial Reporting

The Corporate Legal Operations Consortium (CLOC) guides legal operations professionals to pursue activities that maximize resources through sound financial management. Often, companies need more visibility and predictability in their budgeting and forecasting. This leads to material cash impacts, including shortfalls and a lack of economic context when making investment decisions.

Given its proximity to deals and contracts, legal ops can share critical reporting that boosts finance team effectiveness. Opportunity areas include: 

• Streamlining invoice review
• Allocating legal costs to business areas
• Deriving spend insights from vendor contracts
• Supporting budget development with centralized reporting

Legal ops teams have become an indispensable part of budgeting and financial planning by supporting activities like these.  

Sales Cycle

When legal and sales fall out of sync, the deal pace slows. To avoid this, legal ops must pinpoint problem areas. This often means eliminating communication gaps by centralizing and integrating both teams’ data and systems.

Practically, this should include creating processes that move contract drafting and management workflows out of the inbox. LinkSquares, for example, built a Salesforce CRM integration within its contract lifecycle management (CLM) platform. This becomes a low-hanging fruit opportunity for many to reduce the email clutter that’s compounding poor communication. Reps benefit from automated contract status updates, and managers sharpen their ability to forecast, assess time-to-close, and predict revenues.

To support sales (or any critical business function), legal ops must also understand what their colleagues need and expect. This doesn’t mean becoming an order taker. Spend time defining common sales cycle disruptors and identifying process risks. Talk to key stakeholders; come up with step-by-step procedures and workflows to improve ownership, clarity, and accountability.

When teams don’t discuss these, sales process confusion turns to frustration. As one legal leader told us, “Communication missteps are rare when everyone knows who is doing what by when.” Once exposed, legal ops must rebuild the processes that once slowed down deals. Consider deploying tools to speed up contract creation by allowing sales to draft or request agreements directly from their CRM. Additionally, consider pre-approved terms or contract language that sales or customer success teams can use without interacting with legal.

Explore self-service reporting as well. Legal ops may streamline communications by adopting software to give business users access to custom contract reporting. For example: Does the revenue ops team need to pull reports on how many contracts renew this quarter or understand how many clients are headquartered in London?

Automate it  – eliminate back-and-forth emails that paint the picture of other teams waiting on legal to comb through contracts. Ready now? Download this guide today.

The rapid growth of generative Artificial Intelligence (AI) promises to fuel seismic changes throughout every aspect of the business world. A quick glance at recent headlines gives a good sense of just how the expanding power of AI-spawned text, images, and media is reverberating: 

• Google added the power of Generative AI to its search engine, allowing users to receive AI-generated summaries to select queries. 

• IBM is launching a new “WatsonX” studio for organizations to create their own generative AI workflows. 
• A Goldman Sachs survey forecast “significant disruption” to labor worldwide from Generative AI — potentially affecting up to 300 million jobs. 

The legal industry will be in the middle of the Generative AI revolution. But what will that transformation look like for the legal world — and how can the industry best take advantage of its promises and potential?  

Three areas of transformation 

These three legal areas will see meaningful opportunities for value from generative AI:  

• SPEND MANAGEMENT. Generated AI can also boost departments’ ability to make sense of their tens of thousands of lines of invoice data by delivering insights into value, helping departments understand exactly what they are paying for. These quick, accessible insights are a powerful way to stop the attorney habit of “rubber-stamping” invoices and address capacity concerns for busy departments. It also increases the quality and speed of invoice review, flagging patterns that can violate billing guidelines (especially for lengthy, complex invoices).  
   
  Additionally, generative AI can assist with vendor management — particularly tough conversations around rate, value and performance. When backed by detailed, insightful data, it is easier to have productive, emotion-free, and surprise-free conversations. 
   
  EXAMPLE: Invoice summarization. Onit integration with ChatGPT provides a quick, insightful summary of a contract’s tasks to analyze overall value – allowing users to glimpse into the hours spent per task, the work done by specific timekeepers, and much more.  
   
• CONTRACTING. With Generative AI’s ability to generate content such as summaries and redlines, Contracting is a natural place where the technology will have significant impact. In fact, contracting is one area where we see more mainstream adoption of AI — for example, most of Onit’s CLM customers use AI in contracting. Fueling this growth? The improvement in legal comprehension by Generative AI; for example, GPT4 passed the bar exam, scoring in the top 90^th percentile on one 2023 tryout.   
   
  These advancements mean the industry can use AI as a co-pilot to run contract playbooks. AI serves as a powerful tool to help reduce some of the repetitive manual work plaguing this part of the process and improve consistency.    
   
  What about post-signature? In an era of constant mergers and acquisitions, regulation and compliance demands, companies often find themselves with questions about the contracts in their repository. AI-driven analysis gives a valuable look into these contracts and their clause libraries, allowing the new company to quickly identify risks and remediate them.  
   
  EXAMPLE: Contract analysis. Onit’s AI Co-Pilot sits alongside you as you review your contract. You can ask it to spot issues, suggest redlining, compare against your template language and flag deviations from your standards. 
   
• LEGAL REQUESTS. This impact is one our CGI panel and audience were extremely excited about; sometimes, the most beneficial use of AI is to remove manual work (like form filling), remove friction and encourage the adoption of our tools and processes. AI technology can help to kick off the workflow with minimal user intervention, automating legal request creation, determining routing priorities, and establishing tracking — removing significant administrative tasks for attorneys. It can also assist as the “first response,” automating common business requests before they go to Legal.  
   
  EXAMPLE: Creating a legal request. Onit’s AI integration can read an email chain and automatically generate a legal request.    

This is what our audience at CGI 2023 said when we asked them about the impact of Generative AI. Do you agree with their thoughts? 

Next steps for Legal: Three things to remember 

As Legal takes its next steps into the AI world, it’s a good idea to have these general principles in mind: 

• Keep on top of technology. Designate some time for yourself or ask a team to keep up with the possibilities and enhancements of Generative AI. In a world where rapid advancements happen weekly (if not daily), education and knowledge are king.  
• Address the fear of the unknown. The disruptive effects of new technology can be intimidating for many. Don’t rush or push anyone into this new world; encourage them to learn and engage with the space, focus on opportunities and use carefully tested and validated tools.   

It’s no secret – the number of tools we use on a daily basis has ballooned over the last decade. In fact, a recent study found that “a surplus of digital workplace tools places a cognitive burden on employees, as it takes time for people to stop and think about where to find each tool.” Sound familiar? 

At Ironclad, our goal is to streamline the contracting process – from end to end – to make contracting faster, more efficient, more impactful, and, simply put, easier. In December of 2022, we launched the Ironclad Ecosystem, a network of strategic partnerships featuring the tools you already know and love, like Salesforce, OneTrust, and Zapier. By connecting contracts to the wider business ecosystem, your contracts sit right alongside your tech stack – allowing you to work in (and get more value from) the tools that you’re already using.  

Introducing Slack to the Ironclad Ecosystem 

Today I’m excited to announce our newest addition to the Ironclad Ecosystem – Slack. This is a prime example of connecting Ironclad to the critical tools you’re in on a daily basis to drive efficiency. 

With the new Slack integration, teams across legal, sales, finance, and more can:  

• Stay up to date on your contracts without leaving Slack: Ironclad’s Slack notifications allow you to review workflow details, read comments and get alerted when you need to approve.  
• Customize alerts to meet your needs: Executives who are doing the signing usually need different notifications than, say, a legal team member who wants to be alerted about every approval. With the Ironclad Slack integration, each user can customize their own notifications preferences, to get as many – or as few – notifications as they need.  
• Launch a contract right from Slack using a Slash common: Users can simply type “/request-ironclad-contract” to request a contract, select the contract type from (inside Slack), and then get automatically redirected to Ironclad to complete the exact form you need to start your contracting workflow.  

To learn more about how you can bring the power of Ironclad to Slack, book a demo with our team.

Make Salesforce a one-stop-contract-shop with powerful new feature updates

Salesforce is arguably the most used tool in sales – which means teams are spending a big portion of their day in it. To help sales teams move faster while staying compliant, we’ve invested heavily in our Salesforce integration over the years to bring the contracting process directly into tools they use regularly. In fact, through Ironclad’s Salesforce integration, we’re seeing contract launches happen four times faster when launched from Salesforce, saving your sales users significant time as they try to drive revenue.

With the latest updates to our Salesforce capabilities, companies can now:

• Upload contracts for contract review (redlines) and fully-signed signature packets
• Access Ironclad’s powerful document viewer, including version comparison, document labels, DOCX and PDF downloads
• Communicate via embedded internal comments
• Share documents to the counterparty directly

… all without having to leave the Salesforce interface. And these updates continue to build on the existing integration capabilities, which allow teams to:

• Launch, review, negotiate, and approve contracts without leaving Salesforce.
• Automatically import Salesforce data into contract workflows to eliminate duplicate data entry.
• Ensure data consistency with Salesforce metadata updates automatically reflected in Ironclad.
• Stay up to date in Salesforce for things like contract approval and signature status to keep all parties updated on where the contract stands.
• Centralize agreements associated with an object to see all relevant contracts for a customer in one place.
• Act on contract data by including contract metadata in Salesforce reports.

An Immersive Week in Las Vegas

We announced all these Ironclad Ecosystem updates during CLOC Global Institute, CLOC’s recent annual conference in Las Vegas, where Ironclad was honored as a Diamond Elite Sponsor and the team hosted several sessions on Ironclad product deep dives, customer spotlights, and the future of generative AI and legal work. (Spoiler alert – CLOC celebrity and Ironclad Chief Community Officer Mary O’Caroll says engaging with AI is no longer a choice!). They also gathered customers and industry experts for networking and drinks at an incredible afterparty at the Cosmopolitan’s hidden gem of a bar, The Barbershop.

Looking Ahead

We are excited to continue building out the Ironclad Ecosystem throughout the year – and have some big plans for additional partner integrations in just the next few months. Click here to learn more about the Ironclad Ecosystem, or request a demo for a live walkthrough at ironcladapp.com!