3 Tips for Putting Legal Operations in the Driver’s Seat for Contract Transformation

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.