2021 CONTRACT TECH BUYER’S GUIDE
Contracts are the lifeline of commercial enterprises and also the most common challenge faced by growing and established companies, alike. As business becomes more complex and faster paced, contracts need to keep up. The only way to keep pace and scale is to apply technology to the contract management function. The right tech solution will help expedite contract creation, negotiation, execution, and overall management across several departments simultaneously. As the variety of contract management related systems expands, choosing the right solution becomes increasingly difficult.
During my time in-house, I was responsible for managing global contracting processes and the technology associated with them; specifically I deployed a global enterprise repository. Now I work with corporate legal teams who are selecting contract management systems and preparing to change their contracting processes. I know first-hand the challenges associated with evaluating, choosing, and deploying technology solutions, while minimizing impact on current business momentum and meeting unique requirements of a complex matrixed business.
This guide is a follow-on to the Legal Tech Buyer’s Guide, focusing in depth on Contract Lifecycle Management (CLM) systems and technologies designed for specific functions within the CLM. It is impossible to create a complete list of all the technologies on the market as new entrants appear regularly and categorization of the solutions continues to evolve. This guide is intended to create some clarity in a complex area of LegalTech, and assist readers on their contracting journeys.
About Lucy Bassli
Lucy began her career in private practice including as an associate at Davis Wright Tremaine, then spent 13 years at Microsoft, rising to Assistant General Counsel, Legal Operations and Contracting. She was responsible for the legal support of all global procurement and managing Microsoft’s global contract repository. Her experience as Deputy General Counsel at Snowflake, a high growth tech company, informed her founding of a modern law firm and legal operations consultancy, InnoLaw Group PLLC which specializes in contracting efficiencies.
RAISING THE BAR WITH CONTRACT SOLUTIONS
Contracts are the currency of every organization, but they have become more complicated over time. Gaps, omissions, and ambiguities are commonplace, despite best efforts to anticipate every scenario. Contracts have also become more complex as the risk and compliance environment has changed. CCPA, GDPR, and many other regulations have introduced new challenges, and the risk associated with noncompliance has increased.
Prior to signature, creating contracts from scratch is highly inefficient, and negotiating special clauses typically requires excessive input and business discussions. After signature, legal departments face a continual challenge locating contractual obligations, especially over time and across organization changes. These problems compound at high volume, and deviating from established practices introduces both legal and systemic risk. Maintaining standard terms and consistent negotiation positions becomes impossible as business grows and complexity rises.
In addition, challenges in managing contract process are heightened by increased business speed, making it difficult to monitor and have transparency of every contract. Companies typically lose between 5% to 40% of value on a given deal due to inefficient processes. It is not hard to see why; no two workflows are the same. They vary across organizations, even in the same industry; and across departments within the same company.
LegalTech contract solutions offer a fast track to resolving these challenges and many more while systemizing efficiencies and the delivery of higher quality legal services. McKinsey estimates that at least 23% of a lawyer’s job can be automated, and the Corporate Legal Operations Consortium’s (CLOC) 2019 State of the Industry Survey indicates that 45% of corporate legal teams are actively exploring how to use these solutions.
Contract solutions can be rapidly implemented at scale and have a potent role to play in shaping a modern operating model for legal teams. They bring the benefits of reducing risk while increasing the speed and accuracy of routine legal functions. For example, Gartner predicts that the degree of manual effort required for the pre-signature contract review process will be halved in enterprises that adopt contract solutions.
An additional benefit is that contract solutions keep high-value legal work in-house. Lawyers have more direct control, continue to grow their institutional knowledge, and have customization options over the performance and quality of services delivered to the business.