Contracts are the backbone of all commercial relationships. They help businesses clearly define the parameters of a working relationship to ensure they meet everyone’s expectations.

Even before agreement terms take shape, contracts have a far-reaching impact throughout an organization. They affect functions as diverse as risk management, compliance, procurement, sales, and finance. Contract data defines how those key functions must operate, which becomes even more complex across a company’s contract portfolio.

CLOC ReCharge Webinar Series – Optimization & Efficiency

This presentation will focus on how to harness, measure, and present legal department data in order to tell the story of the legal department, both within the department itself and outside of it, through data-informed dashboards.  

 

We will discuss: 

• How to capture and measure data for commonly tracked key performance indicators, such as matter counts, cycle times, and workload balancing

• How to turn harnessed data into dashboards and how to use those dashboards to make business decisions

• Cautions and pitfalls of using data as a storytelling device

Organizations find themselves locked in a fierce struggle against their own data. Legal teams are being engulfed by an overwhelming avalanche of information and enterprise data volumes are doubling every 2 years. In this whitepaper, we provide 7 crucial readiness steps to conquer the data avalanche and emerge victorious in your legal use cases.

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.

 

In a recent CLOC Ask the Experts webinar, legal operations experts from the Northwestern Pritzker School of Law, Uber, NCR Corporation, and DocuSign shared why the digital transformation of contracting processes is essential for legal teams today. A modern contracting process can make your legal team more efficient, unlock scalable support for other business teams, and unearth a trove of useful data. By transforming your contracting process, you can drive efficiency and contribute real value to your organization.

Here are the three important reasons why legal departments and legal operations should modernize their approach to contracts.

1. Improve efficiency while reducing risk

With increased pressure on margins and a challenging economic climate, legal is beholden to budgets more than in the past. According to Nancy Kumar, law vice president at NCR Corporation, these new constraints make driving digital transformation and continuous improvement all the more critical. By partnering with sales and members of the legal department, legal ops can improve contracting processes and save their organization significant time and money.

Sandy MacDonnell, senior manager of legal operations at DocuSign, saw this firsthand. By implementing DocuSign esignature at her former workplace, she saved the company an estimated $1 million in the first year alone. “We no longer had stacks of papers sitting around,” MacDonnell says. “Legal was no longer being that cost center.”

Just as electronic signature tools and digitization have improved efficiency for countless legal teams, so too can building integrated contract management processes across the organization. A contract lifecycle management (CLM) tool like DocuSign CLM consolidates all contracts and related data in one place, and automates key generation, approval, and signature tasks, allowing for more connected workflows.

It also makes it easy to track obligations and milestones, which can greatly reduce contract value leakage, says David Silbert, senior director of Agreement Cloud strategy at DocuSign. “Everyone works so hard to get their favorable terms into an agreement, but if you’re not actually tracking what you’re entitled to under that agreement in the real world…you’ve left dollars on the table.”

Improving contract management not only enhances efficiency but also helps legal teams reduce risk. Centralized repositories and systems lead to better security and allow you to easily find critical documents, while best contracting practices prevent recency bias or missing unfavorable terms during negotiations.

2. Allow your legal team to scale

Historically, legal teams have taken a reactive stance to address problems in the contract process instead of a proactive one, entering the picture after a problem has been identified. This hinders an organization’s ability to scale, notes Dan Linna, Jr., senior lecturer, and director of law and technology initiatives at Northwestern Pritzker School of Law and McCormick School of Engineering. 

“Through innovation and transformation, we really have an opportunity to shift to a prevention mindset,” says Linna, Jr. “We need to think about how we can design systems and processes to identify and prevent problems early when the cost of addressing them is lower.”

A potential solution lies in automation and data. By leveraging automation, legal can build processes that provide employees in other departments access to legal guidance, as well as self-service options like pre-approved terms and clauses. These new systems and processes are not only more efficient, freeing up time and supporting growth, but they also mitigate risk. Pre-approved terms and contract workflows, for instance, help catch non-standard terms, reducing risk exposure. Meanwhile, analytics can help identify and predict outcomes, empowering legal teams to avoid undesirable downstream consequences to poorly written contracts or unclear obligations.

3. Unlock more and better data

With a digitized contract management system, legal ops can gather useful information to improve legal processes. Features like centralized storage, automation, and analytics all allow for greater insight and provide legal ops with critical data points, including contract volume, time to signature, and context on where escalations occurred.

Document generation forms, which allow your sales team to stay within Salesforce when generating agreements and other sales documents, are another key tool for gathering data. By looking at document generation templates, legal ops can gather metadata to better support their colleagues, advises Jonathan Johnson-Swagel, senior legal and business operations manager at Uber. 

“When groups think intelligently, carefully, and preventatively to identify that metadata at the outset of designing the CLM product and those document generation forms, they end up with a treasure trove of valuable data,” says Johnson-Swagel. “This data can be visualized and tailored to the audience to help them identify and understand trends, highlight risks, and drive business decisions at the management level.”

Kumar adds that document generation forms also provide insight into how often people in the organization use templates. If usage is low, legal operations teams can make adjustments to better meet their needs. Ultimately, better data allows for better decision-making, from financial decisions to hiring.

For Sibert, having technology that provides structured information at scale removes the guesswork from establishing and achieving goals. Rather than answer complex questions about the use case or the business based on best practices or estimates, he can now answer them based on actual information.

“I used to have to explain to people, yes, there’s this thing called AI and it can apply to contracts,” he says. “Now we’ve moved so far past that. People are all bought in on the idea…But the key is having people and organizations think about what they want to attempt to solve for and how to get there.”

Legal ops as drivers of contract transformation

Legal ops teams are well-positioned to help their organizations design and meet goals around digital transformation of contract processes. For one, because the contracting process touches so many disciplines, legal ops works with multiple departments, making them qualified to lead and facilitate cross-organizational change.

Legal ops teams are also practiced at building relationships across the organization and understanding stakeholder needs—essential skills for launching a digital transformation initiative. Kumar suggests legal ops teams consult stakeholders throughout the process to avoid delivering a solution that doesn’t meet end users’ needs.

“As you look for types of transformational activities or process improvements, look at your end-user…and bring them along in the journey,” Kumar says. “You need to understand what their pain points are and what you’re trying to solve for.”

Another strength of legal ops teams is that they’re well-versed in tech evaluation and process improvement, both of which are important for digitizing contract management. They understand the value of an integrated platform, from centralized systems to integrating with other enterprise solutions.

Contracts impact stakeholders across the organization, from legal to sales to finance. Panel members agreed that it’s important to take initiative and not to wait for a business-critical event like a missing contract to start thinking about this technology.

“Everybody should own [this] and be at the table,” says Johnson-Swagel. “CLM is sort of the watering hole where all of the animals of the savanna come together to drink. It’s a peaceful place where we all make business efficiencies and magic happen together in the kingdom.”

To hear more about how and why legal ops leaders are transforming the contract process at their own organizations, watch the full webinar here.

As part of your organization’s legal contracting team, contract details are your domain. During the drafting process you might include every possible clause and rider to cover all the eventualities that might be encountered throughout a business relationship. These lengthy blocks of text can be critical to the success of a contract and anticipating potential risk, but they can also be difficult to wade through to locate specific terms and language. And that’s assuming you’ve found the correct version of the contract in the first place. 

Contract search and analysis, powered by AI, reduces the manual tedium—along with the enormous number of hours and expense—required to find and comb through contractual agreements to pull out relevant language on demand.

As a global driver in contracting technology, DocuSign conducted a survey of 1,300 contracting professionals around the world. The results of this survey reveal how legal teams in today’s contracting ecosystem locate agreements, identify terms, and use analysis to enhance business value. The results show: there are compelling benefits to automating contract search and leveraging AI analysis.

Read on for the insightful findings. 

1. 68 percent of contract professionals search for completed contracts at least once a week

Imagine having to do the same search tasks week after week, all year long – sound familiar? That’s the case for more than two-thirds of contract professionals. Now what if the volume of your contracts is so extensive that the search for completed contracts is a time-consuming daily task? That’s the impasse confronting 23 percent of respondents. 

Why is there so much contract searching going on? Respondents indicate they’re: 

• Looking for contracts in anticipation of an upcoming renewal (61%)
• Using completed contracts as a basis for drafting new contracts (55%)
• Identifying deviations from terms and conditions (49%)
• Reviewing contractual obligations (45%) 

Along with looking at overall contracts, respondents also note they’re looking for specific information, such as:

• Payment terms and financial obligations (56%)
• Renewal terms (55%)
• Details of service level agreements (48%)
• Legal and regulatory requirements (29%)

Being able to locate completed contracts quickly enhances business performance. It’s a simple equation: when you spend less time finding and sorting through your contracts, you free up time for fulfilling complex obligations and ensuring compliance. AI analytics and search tools offer the power to search efficiently and effectively for contracts and language within them so that your teams can devote more time to strategic pursuits that protect the company and improve the bottom line.

2. Finding specific language in a contract takes more than two hours, on average

According to our survey, the majority of contract professionals spend between one and six hours tracking obligations in a contract over the course of its lifetime. One in four spend more than a full workday in total. Surely there are more productive ways of spending that time.

Typically, retrieving contracts breaks down into two stages:

• Locating a contract (45 minutes) 
• Finding the relevant section or language (84 minutes)

In total, that’s more than two hours spent just locating contracts and language, not even analyzing or applying the information. And that’s only for a single contract—if you consider on average companies generate over 500 contracts per month, or over 6,000 per year, the time cost is tremendous.

What’s more, despite these lengthy searches, in some cases, teams can’t find the right contract. 46 percent of the organizations we surveyed are sometimes unable to locate contracts, and less than half reported feeling very confident that the document they found was the most up-to-date version.

As a result, even with all the hours spent looking for contracts and pulling out language, it’s not always clear that teams manage to identify the final—and therefore actionable—version. By offering customizable, robust search options, AI-assisted tools help legal teams avoid this trap.

3. 65 percent of teams aren’t using integrated tools to manage agreements

Our survey shows why many companies spend so much time on contract retrieval: they’re still using siloed systems which slow them down. The average team uses three or more separate tools to perform analysis, and a majority aren’t using specialized technology: 65 percent still use spreadsheets and email to manage contracts.

The result is lost time. From an efficiency and accuracy standpoint, it’s better to have everything you need to manage agreements in one place, with integrated systems so you eliminate the need to switch between platforms or cut and paste information. Much of the time spent locating contracts and searching for specific language can be reduced by managing these processes from one system.

The absence of automated search and analysis capabilities has deleterious effects on the overall contracting process. According to our survey, the majority of problems are related to the inability to efficiently analyze contracts, which can result in missed payments, missed deadlines and missed opportunities. A more efficient system, making use of integrated technology and advanced AI, helps companies prevent misses caused by disparate workflows.

4. Around half of respondents expect AI to reduce human error and minimize risk in contract management.

Many companies and their legal teams are beginning to heed the call of new contract technology. They’re becoming aware of what AI-assisted tools can do to help their contract management lifecycle: 54 percent of survey respondents say they’ve heard of smart contracts, 37 percent of intelligent search and 35 percent of language flagging during negotiation. And around a third of respondents recognize the power of AI-powered process shortcuts like:

• Automatic data extraction 
• Clause-level text recommendations
• Predictive post-execution analytics

By harnessing the power of technology, legal teams can be part of their companies’ efforts to drive efficiency. The rewards for automation are substantial. 53 percent of respondents expect AI to support human decision making and reduce error in the contract management process and 48 percent expect AI to minimize risk.

The financial benefits of a digitized contract process

According to a Forrester study, a composite company saw a 356 percent return on investment in contract lifecycle management technology over the course of three years. The study found that, generally, a robust contract analysis process can reduce the costs associated with hiring outside counsel to analyze documents, as well as errors in agreements and the risk of exposure.

DocuSign helps your legal teams search smarter and analyze better

DocuSign is an innovator in AI-powered contract technology. DocuSign CLM leverages AI to uncover insights from existing contracts and the negotiation process. Beyond intelligent contract analysis, we’re continually developing new AI tools to help your team through every step of managing an agreement. 

As we continue to innovate, our priority is always ensuring that our customers have the tools they need to get work done as efficiently and smartly as possible.

To learn more about current trends in contract analytics, check out our ebook on smarter search.

Advice on building an organization that can adapt to new challenges

Two popular sayings in the legal world are 1) people, process, technology, and data are what make a firm unique, and 2) change is constant. So how do those two elements work together? How can you ensure that you have the right people, processes, technology, and data for today’s constantly changing world?

Shearman & Sterling, a 150-year-old law firm, recently asked themselves this question as they undertook a massive data analytics project, as shared in a recent Ask the Experts session for CLOC. The firm had one billion documents, only 4% of which were in their document management system (DMS), that they needed to quickly get into ship shape to meet new compliance standards. By the end of the 18-month project, not only were all documents in an easily searchable cloud repository, but the firm was also able to roll out features that are beneficial to the client like partner dashboards, more accurate forecasting, and revenue models for value-based pricing.

Here’s a look at their pillars of people, process, technology, and data, that empowered their success as a data-driven firm.

People

“The people aspect cannot be underestimated,” said Meredith Williams-Range, Chief Knowledge and Client Value Officer at Shearman & Sterling. “You have to bring your people along in your [change] journey. Your processes won’t matter. People are your culture and culture will trump your strategy any day of the week.” In the Shearman & Sterling’s case, that meant truly making the initiative firm-wide, as opposed to the responsibility of a certain team, with top-down support from the C-level executives.

Part of the success of the people aspect can be attributed to hiring and involving the right people. Lawrence Baxter, Shearman & Sterling’s Chief Technology Officer, touts the strategy of balancing IQ, EQ, and AQ — that is, intelligence, emotional intelligence, and adaptability — in new hires. (A former marketing executive, he has seen his share of companies go under because they are unable to adapt). He also likes to create teams with equal proportions of, 1) veterans with strong institutional knowledge, 2) tenured employees who are willing to learn new skills, and 3) newer employees, especially those from other industries, who can bring in fresh new ideas.

The success of the project also depended on a fundamental understanding that this effort was not about replacing people with machines. As Williams-Range explained, “It’s simply about adapting the processes that we have and enhancing those processes because the amount of information and the amount of data coming at us as lawyers is growing each day. The technology holds the hand of the lawyer.”

Process

In terms of process, Williams-Range believes there’s no one right place to start — the important thing is to simply start. For Shearman & Sterling, the beginning point was understanding clients and regulations at a global scale. Baxter also recommended asking clients what’s working and what isn’t, and using those answers to drive internal change, since what the client wants carries weight. Of course, unforeseen circumstances can also drive change — Baxter said he has seen years of innovation in the past few months.

The team agreed there are no shortcuts when it comes to process improvement. As Glenn LaForce, Global Director of Knowledge & Research at Shearman & Sterling put it, “You can’t shortchange the pre-work that goes into getting to what we call the sexy stuff, all the cool analytics projects. You have to go through, you have to look at your data and be sure it’s clean and in order, make sure you have the right governance behind it and make sure you have the right policies behind it, and that takes time.”

A whole-firm initiative also meant involving the whole firm. The company created a multidisciplinary data steering committee to get an understanding of how each part of the organization was using data and the downstream effects of making any changes. How will a change to a process in HR affect the DMS in eDiscovery? How should workflows be adjusted for the unique needs of finance and the research team? How do you ensure there’s an audit trail?

For Jeff Saper, Global Director, Enterprise Architecture & Delivery Services at Shearman & Sterling, a lot of the process work comes down to reducing complexity. “We create complex environments and at the end of the day, they need to be simplified,” he said. However, this process of simplifying and streamlining cannot compromise compliance, regulatory processes, or confidence in your work.

Saper and LaForce also stressed that failure is an important part of the process and should not be viewed as a negative — if it happens within a development environment. Finding processes that do not deliver value is just as important as finding ones that do. The important thing, they agree, is learning how to adapt and move forward.

Technology and Data

Again, when evaluating which technology to use, the question ultimately comes back to what benefit will the client receive. For example, Shearman & Sterling decided to move their DMS to the cloud. However, as Saper pointed out, “It’s not about cloud. It’s the agility of what we can do to make things work faster or leaner and hopefully have a better return for our firm.” People wanted to be able to access data anywhere, on any device — a desire that was certainly fast-tracked by the COVID-19 pandemic — and the cloud enabled that.

Similarly, the firm found success in using established technology in new and different ways. For example, the firm used DISCO eDiscovery to sort through and classify emails. Using the platform’s artificial intelligence capabilities, the team was able to classify some 30 million emails in 12 days.

The team developed a clear strategy around who they would partner with to find the right technology. “We’re never going to be a firm that builds technology,” said Williams-Range. “We have talented lawyers and that’s our sweet spot, but we need to provide the right technology and the right system to our people to be as efficient as possible to deliver the best value to our clients. What we do is we look for those partnerships that are going to really work with us.” 

As someone who spent 16 years on the technology vendor side and has seen a lot of finger-pointing, LaForce emphasized the importance of looking for partners as invested in the success of the project as the internal team is, who have governance procedures and skin in the game. “Otherwise, they’re just selling us a product,” he said.

Baxter also noted that the legal landscape has become complicated. A service provider you are in a joint partnership with on one proposal could be a competitor pitching against you in another matter. Cultivating a friendly relationship throughout these complicated dynamics is an art form that will serve law firms well.

Parting Words of Advice

Ultimately, the work of digital transformation is never done, but with the right people, processes, technology, and data in place, the Shearman & Sterling team feel confident they can tackle new challenges that come their way. Their advice to others looking to make the leap? “Just start somewhere,” said Williams-Range. “It can be overwhelming, but just start.”

“Change is not the devil,” added Saper. “It’s ok to continue on a journey as long as you do it safely and securely within compliance. We’re in a different world and law firms have to adjust to it.”

A recent report from Forrester Research,  called contracts the “beating heart” of a business. “Contracts,” the report noted, “define the relationships that companies have with their customers, suppliers, partners, and employees.”

For lawyers and the legal operations professionals that support them, this insight should get hearts pounding. Trained in law school 1L Contracts classrooms and finely honed in corporate boardrooms, corporate counsel pride themselves on being masters of business negotiation chess. As legal counsel, they know what they should fight for, what they can let slide, and what they can ignore; that’s why most legal departments (“Legal” manage a company’s large volume of contracts in-house and rarely outsource this work to outside counsel. It’s also why Legal Department Operations professionals (LDOs) spend considerable time thinking about how to leverage a new generation of business technology to streamline contract management across the organization—and get these critical documents out of people’s inboxes and into the Cloud. (One recent survey put LDO adoption of contract lifecycle management (CLM) technology at about 80%).

Finally, the humble paper contract, and the process to negotiate it, is getting the recognition and upgrade that it deserves.

Is Legal Living Up to the Task?

Even though Legal is one of many “touches” in a contract’s life cycle, its failure to be strategic and act as a valued partner to the business is a frequent criticism. Given Legal’s heavy involvement in the “beating heart” of an organization, it must evaluate if it is doing as much as it can to support the business through its negotiation of these documents.  

• Does it understand what the business needs from its contracts?
• Is it negotiating contracts that truly maximize the value of the business’s relationships?
• Is it negotiating contracts that are fully aligned with the business?

Data Suggests It Might Not Be.

In its recent “Most Negotiated Terms” report, World Commerce and Contracting (WCC)[1] found that legal professionals, when negotiating a contract, focus on clauses that protect the business from a potential failure than on facilitating success. The survey suggests that the contract language Legal spends the most time negotiating is not the language that will significantly impact the commercial outcomes.

Does this mean lawyers have been focusing on the wrong thing?

No, risk management remains critical. But it does suggest opportunities for Legal to expand its consideration of what makes a good contract a great one. With the help of LDOs, here are some recommendations for corporate counsel to transform themselves from being perceived as mere legal counselors to becoming strategic and valued partners to the business:

1. Consider adding “relational terms” to your templates and playbooks.

First, let’s define a better contract. There is a growing recognition in contracting circles that “relational terms” should receive more attention when drafting agreements. WCC defines “relational terms” as terms that “help us adapt and adjust.”

WCC notes:

“They may include a more formal approach to the frequency and method of communications, or clearer definitions of data exchange, or greater rigor in defining the procedures for change management.”

These relational clauses are:

 “… essential to sustaining relationships, managing uncertainty, and securing improved performance.”

Relational clauses look beyond how a contract relationship might end and focuses on sustaining the relationship and creating optionality for the business when there’s less certainty during the relationship.

The Forrester report cited above corroborates this. Among firms Forrester surveyed, 76% of firms with “mature” contract management programs focus on contracts as not only risk management tools but instruments with which their companies can create value.

• Improve Cross-Functional Alignment by Prioritizing Information Flows and Sharing

Now you might be thinking, “Easier said than done.” How can Legal fully know what the business agreed to or what its delivery teams need to keep its relationships on track?  If an organization’s workflows exist in silos, the answer is, it can’t.

Negotiating more valuable contracts requires Cross-Functional Alignment—one of the CORE 12 from CLOC. CLOC defines Cross-Functional Alignment as  the ability to “create and drive relationships with other key company functions, such as HR, IT, Finance and Workplace Resources.”

To facilitate complete alignment with the business, Legal must gain full visibility upstream and downstream. LDOs should consider working across functions to get corporate counsel involved early in deals and fine-tune the information Legal collects in its intake procedure, such as:

• What is the business trying to achieve with this agreement?
• How should this contract work?
• What are the signals that something is going awry?
• If something goes awry, what additional safety valves should Legal add to protect the business?
• Once a contract is executed, what type of information should Legal share with the business stakeholders managing the contract? 

• Get A Little Help from Organization-Wide Technology and Contract Data Pools

Some highly seasoned negotiators might already use relational terms or have relationships with the business that provide a deep understanding of a transaction or deal. But to scale it and bake it into the process for the benefit of the entire organization, the business needs a shared contracting platform that the cross-functional departments will adopt and use. (i.e., a platform not exclusively built for Legal!).

Organization-wide contract lifecycle management (CLM) creates a single source of truth that all contract stakeholders can trust, to improve contract performance. For Legal, this might mean aggregating conversations and information exchanged between the contracting parties and sharing it with Legal before any drafting and negotiations are conducted. Following execution of the contract, it might mean using obligation management tools to monitor performance and create pools of data about contract risk and performance.  

In the aggregate, Legal can pool data that will improve the entire contracting process by:

• Identifying the most frequent deviations from standard clauses.
• Facilitating template or playbook modifications to address these deviations.
• Identifying repeated sticking points that continuously slow down negotiations (potentially getting business relationships off on the wrong foot)?

Post-execution, Legal can surface insights on contract performance to make data-driven decisions on which clauses and templates are delivering the most value and which are leading to disputes or under-performance. Given the WCC data above, clauses leading to disputes should get a hard look to determine if more accommodating, mutually beneficial language can improve the template.

The Rise of Contract Intelligence

Ultimately, companies can arrive at a place where Contract Intelligence becomes Business Intelligence (another CLOC Core 12 Competency). With full visibility and continuous real-time data, Legal and Legal Ops increase their business impact on the organization – and better yet, have the metrics to prove it.

Legal can experience efficiencies by streamlining contracting processes across the organization. But more valuable will be the data pools and business intelligence created from these more efficient workflows. Contract intelligence goes well beyond contract management. It can empower organizations to continuously improve outcomes by focusing on the “heart” of their business.

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[1] Formerly International Association of Commerce and Contract Management). The “Most Negotiated Terms” report relied on a broad survey of legal and contracting professionals.

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Bernadette Bulacan serves as Vice President and Lead Global Evangelist, at Icertis, the recognized leader for enterprise contract management. She shares contract management best practices and innovations with corporate counsel and contracting professionals.

 

Organizations credit digital transformation with reducing costs, increasing agility, and delivering enhanced and new services. A possible unforeseen outcome of digital transformation is a rising volume of digital documents and information generated by business systems.

Digitally managing this increasing volume of documents presents a particular challenge for the legal industry. Law firms and legal departments require easy document accessibility and specific needs around workflow and collaboration.  There is no time in history when these needs have been more acute than in 2020 when remote working is the norm rather than the exception.

Traditional document management systems focused on helping enterprises organize and manage their documents. As these systems’ use increased, users found that they could not meet modern law departments and legal professionals’ needs.

Defining Modern Document Management

Modern document management is the next stage in the evolution of productivity solutions for corporate legal departments and users. These systems deliver an intuitive, consumer-like experience that empowers professionals to work more productively and collaboratively. At the same time, they enable corporate legal departments to be more efficient, agile, and responsive to the changing business environment.

1. Value to the User: The central tenet of modern document management is to empower the user by delivering a dramatically better experience. Its platform mirrors consumer applications like Amazon and Google, with intuitive features that work the way users want to work and requires minimal training. Modern document management starts with a clean, modern interface, accessible on any device, including personal computers, phones, or tablets. These systems store documents and emails with their associated project or matter, so users see the complete picture without bouncing between information silos. And it is seamlessly integrated with the authoring applications that people use every day, including Microsoft Word, Outlook, Gmail, and others.

2. Value to the information: Modern document management adds smart features and capabilities to enhance the value of information stored in documents and emails. For example, it displays document history and other metrics in intuitive visual dashboards and timelines. It anticipates user actions with smart document previews, suggested filing locations, and personalized search. And it integrates seamlessly with the tools legal professionals use, including matter management, contract management, and workflow software.

3. Value to the organization: Improving the individual user experience while enhancing the value of information delivers profound benefits at the organizational level. Modern document management helps legal organizations become more efficient and productive and deliver better outcomes for the business. Increased user experience drives user adoption and increases the amount of content stored in an organized and secure environment.  The system reduces the time spent – across the department – searching for the correct document. More importantly, it retains the department’s institutional knowledge, captured in documents and emails.

4. Comprehensive Governance and Security: The final tenet of modern document management is comprehensive security and governance. Legal organizations have stringent requirements for document security from both internal and external threats. This content requires comprehensive security protections, built on established industry best practices, to secure information assets and govern who can access them. Data is encrypted at every stage of the process, with security permissions defined by content type and automatically applied across all documents or email.

Real-World Case Study

To further illustrate these concepts, it’s helpful to consider a real-world law department example. A large multinational corporation with operations in 180 countries worldwide recently evaluated its legal technology environment. Their in-house team found that they struggled to manage their information resources effectively and identified specific pain points associated with finding, sharing, and uploading information. Their analysis showed that legal department employees needed to search and access four documents every day. The searches fall into three main categories:

• “Easy” searches for documents the user has personally touched recently – 10-20 minutes
• “Warm” searches for documents where the user has some confidence – 30 minutes-2 hours
• “Precedent” searches where the user is looking for previously created content – 1-5 days

When calculating the business impact of this challenge across the department, it became evident that the productivity loss associated with inefficient document search was substantial. They found that data was stored in silos leaving users no single source of truth for business information. The result was a loss of speed and accuracy in searching for information, significantly limiting their ability to find and leverage precedent.

After conducting an evaluation and proof of concept, Legal Operations determined they would roll out a modern document management solution to enable knowledge sharing and leverage their information’s power. They based their decision on believing that they could deliver measurable value by better enabling legal work processes and products. Their objective was to deliver more than a traditional document management system.  They wanted to provide a complete legal information, knowledge, and workflow management solution. A modern document management solution’s core value is transforming how legal professionals get work done, improving productivity, enhancing user experience, increasing knowledge sharing, and improving the overall quality of legal services delivered to the business.