In this episode of Contract Heroes, we sat down with VP of Contract Solutions and Disability Inclusion at Elevate, Prashant Dubey. Prashant hails from a varied background, starting out in healthcare for about a decade before moving west in the late 90s to switch industries. Although he knew nothing about software companies at the time, he began working for them and helped several companies build and grow during their early stages. In the 2000s, he stumbled across the legal industry while helping out an eDiscovery company, where he worked for 6 years before taking the reins and starting his own company.
Prashant’s company, Sumati (which means “pure intent” in Sanskrit), focused on contract management because, in his mind, it represented the polar opposite of eDiscovery. eDiscovery fed off unwilling customers in unwilling markets, whereas contract management is something people practice naturally every day as they conduct business, resulting in a larger pool of clients. In 2018, Elevate acquired Sumat. Prashant now works in a role he designed himself that allows him to be a subject matter expert in contract management while also making an impact on the area of disability inclusion. In this dual role, he focuses on helping customers solve their contract management challenges using the capabilities of Elevate as well as advocating for the inclusion of people with disabilities in the legal industry, an area of the field that he feels is far behind and needs to be prioritized.
Throughout our conversation, Prashant drew on his extensive experience working with contract lifecycle management (CLM) software to talk about the growing impact of CLM on procurement departments as well as the key functionalities that proper contract management can accomplish. Stay tuned until the end to also hear about his invaluable tips for anyone on the hunt for the right CLM implementation partner.
Procurement & Contract Management
As Prashant explained, procurement is currently a hotbed for contract management. The goal of procurement departments is to manage categories of suppliers and be able to optimize their spending. The goal of contract management is to help the department augment the value they bring to the company by measuring how well they achieve their mission. Just as lawyers gain fluid contract processes that allow them to practice law more efficiently via contract management, procurement employees also gain efficiency from contract management’s ability to help them be better category managers.
In the past, you would typically see legal departments driving CLM because they were spending too much time reviewing commonplace agreements. This time could be spent on strategic items instead. Now, procurement organizations have started funding contract management in order to put organized processes in place. These look very similar to those prioritized by legal departments, including intake, triage, review and negotiation using playbooks, and standardizing and harmonizing templates.
Procurement departments used to view the legal department as somewhat of a “deal prevention department,” with lawyers dragging out the agreement process. The law department, on the other hand, might view procurement as fast and loose when it comes to risk management. These views can sometimes cause tension between departments that can slow down the contract process even more. CLM systems and good contract processes evaporate that tension by implementing more management controls and lowering the amount of emotion involved in the process.
Prashant also detailed that, in his experience, more and more procurement departments are reaching out to learn about their options when it comes to CLM software. In many cases, departments use purchase-based systems that have CLM modules built into them. However, these modules tend to be rigid and inflexible to the companies’ needs as they develop, especially compared to the more specialized tools available, causing them to seek out a full feature system instead. Since procurement employees need to be able to manage the obligations of contracts as well while dealing with very specific categories, the best option tends to be a fully fleshed out CLM tool.
Key Functionalities of CLM
Aside from contract repositories, which are typically the basis of CLM tools, many companies also seek out other functionalities of CLM software that can make their contract processes run more smoothly. Playbooks are an excellent example. Once a playbook has been created and implemented into the system, the tool can then review third party contracts and locate deviations from preferred language or places where language is missing entirely. In this way, playbooks empower not only the legal department by lessening their workload, but also sales and procurement employees who don’t have to go through legal every time a change is made to a contract. This can greatly improve the efficiency of the contract process and accelerate deals.
One thing that some legal professionals might fear when they hear about CLM is the idea that it could replace legal judgment. However, Prashant stated that, not only is this not the goal of CLM, but it’s also largely impossible. Some CLM tools can automatically redline documents, which is an extremely useful feature. But, other tools take that feature too far by also inserting new language without approval. These types of tools won’t last long in the industry, as they garner too much organizational risk. Rather, the software exists purely to help lawyers do their job more efficiently, not to replace them entirely.
According to Prashant, CLM functionality provides both greater visibility and greater management control. It gives visibility into existing relationships, the most negotiated provisions, deviation of those provisions from the starting point to be evaluated for risk thresholds, and alternatives that can be used as fallback provisions. It also supplies a higher degree of management control by giving more self-servicing power to other departments outside of legal, often augmenting employee confidence.
What to Look For in an Implementation Partner
To wrap up our awesome conversation with Prashant, we asked him to give some advice to any organizations that might currently be looking for an implementation partner. Here are a few of his key characteristics for the ideal partner:
- Understanding that there is an organizational readiness that needs to be assessed before implementation.
- Utilizing an iterative or phased process rather than a “big bang” implementation.
- Recognizing the soft aspects of change management dynamics.
- Configuration of repositories early on in the process.
- Providing user support after implementation that allows users to call and talk directly to someone if they have any questions.
For more exclusive chats with expert guests in the contract lifecycle management sphere along with valuable legal-tech advice, check out past installments of Contract Heroes and be sure to subscribe so you don’t miss an episode! If you have any questions for our guest, Prashant Dubey, he is available on LinkedIn or by email: firstname.lastname@example.org. You can also visit the Elevate website to connect with Prashant and other members of the Elevate team.