We recorded this special episode of Contract Heroes at the CLM Simplified Academy event in New York City. There, we had the delightful opportunity to talk with three distinguished guests: Mary O’Carroll, Laura Frederick, and Debbie Hoffman.
Our conversations with Mary, Laura, and Debbie all centered around contract management, with each of them drawing from their own wide ranges of expertise in the field to bring new concepts to the discussion. Read on to learn insights about various approaches to CLM implementation, common concerns about contract management from the perspectives of different types of lawyers, and individual experiences actually implementing new technologies.
Mary O’Carrol: Successful CLM Implementations
Mary O’Carroll is the Chief Community Officer at Ironclad and the former Google Director of Legal Ops and CLOC President. Pulling from her experiences at both Google and Ironclad, she offered up tons of advice for organizations looking to implement a CLM.
Starting simple with a phased approach
We kicked things off by asking Mary what kind of approach works best for her customers. She said, “The idea of getting all your stakeholders aligned at the same time and trying to roll out one solution and saying, hey, this is going to be good for everyone is honestly a bit unrealistic. You’re never going to have everyone on the same page.”
So, instead of wasting a year trying to get everyone aligned behind one solution, Mary suggests starting small and simple. Choose one template or contract to refine and automate, then increase the complexity as you go along. Chances are, others will notice the success of that one simple template and suggest more contracts to turn into workflows.
Mary also talked about the ownership of contracts. The truth is, contracts aren’t usually owned by one team within the organization anymore, so implementing solutions has become less about who owns contracts and more about defining the roles and responsibilities associated with those contracts. Whether legal, procurement, or sales wants the solution most, each organization will need to find what works best for them.
The role of CLM technology in maximizing value
The bottom line is that companies need some form of CLM if they truly want to get the maximum value out of their contracts. Otherwise, all operations fall to manual review, which leaves room for bottlenecks and human error. Incorporating systems like a CLM allows you to put controls in place that prevent the mistakes and delays that come with manual review.
Mary stressed that you can’t put these systems in place without first taking the time to figure out your processes. Companies must do the work to set up a decision tree and lay out the entire process before it can be properly automated.
The current state of AI in CLM
When we asked Mary about the role of AI in CLM, especially in regard to Ironclad’s new tools, she said, “AI is very different than it was a year ago.” AI tools have actually begun to change how we work on a daily basis.
You quickly become used to working with these convenient tools that make your job easier and eliminate mundane work to the point that those who work with AI will soon be unable to imagine going back to life without it. It’s like living in a world where you can’t look up the weather or Google the answer to a question.
The industry has to modernize and change because people will expect to have tools that enable their jobs. When employees move to a new job where those tools aren’t yet in place, they won’t be happy. Companies may struggle to retain employees who want tools that they don’t have.
Laura Frederick: Lawyers’ Concerns & Over-Contracting
Next, we spoke with Laura Fredrick. Laura is the founder of How to Contract and recently organized an event called ContractsCon that provided networking opportunities for contract professionals. She has over 25 years of experience working at large law firms and also held a role in commercial contracts at Tesla.
Commercial lawyers’ concerns regarding CLM
We wanted to start off our discussion by learning more about Laura’s unique perspective as a commercial contract lawyer, so we asked her about the main questions most commercial lawyers might have about CLM. She explained that many lawyers know the purpose of a CLM system but are unsure how the system can carry out its promises.
Commercial lawyers are largely concerned with using their knowledge and expertise of risk management to protect the company. They consider hundreds of factors when assessing a contract, and they may want to know how a CLM system can successfully automate without putting the company at risk to all those factors.
How to reverse the tendency to over-contract
Laura has noticed over-contracting in her experience, especially as companies trade templates, redline back and forth, and then wind up back where they started without really making any progress. As we transition toward making contracts more self-service and handing off negotiations to sales and procurement professionals, we need to make sure they have the proper training to carry out these processes with confidence.
“Remember the human factor,” she said. Assure those who might be taking on more work that they won’t be expected to do more than they’re capable of doing. Offer training before asking them to handle tasks like negotiation without the same foundation as a lawyer might have.
Debbie Hoffman: Challenges of Implementing New Technology
Finally, we spoke with Debbie Hoffman. Debbie previously held a position as Managing Associate General Counsel at Western Union and is currently a board director and executive leader with expertise in fintech, real estate, mortgage lending, and blockchain.
The CLM implementation process at Western Union
We asked Debbie to tell us a little bit about her experience implementing a CLM system at Western Union. She explained that it took about a year to get the system up and running and added that the process was very much ongoing. There were always changes and adaptations to be made as the organization and the contracts continued to evolve.
The biggest challenge that Debbie encountered while working with their chosen CLM solution was that there were not a lot of resources to help them after implementation. They had to do most of the management for the system internally, creating templates and doing IT work. It was time consuming to build it out, and oftentimes they didn’t have the extra bandwidth to train staff or create additional playbooks that were needed.
Debbie’s experience speaks to the growing need for legal managed services in the industry. With managed services, organizations can outsource the management of their contract management tools to a dedicated team of experts who is prepared to help them configure the tool so that their internal teams can focus on more pertinent, valuable tasks.
In that same vein, Debbie suggested that CLM vendors offer tier pricing to their customers so that in-house teams can start with step one of implementation and later scale up to more involved management services once others within the company realize the value of the tool and are more willing to invest in its services.