No matter what industry your business resides in, chances are you’re regularly dealing with contracts. Contracts are the backbone of business, allowing organizations and their clients to exchange goods and services while keeping all parties safe from potential litigation.
It’s safe to say that any company’s current, past, and future contracts constitute a record of how that particular company does business. A goldmine of information is locked inside this record of contracts, including data pertaining to the amount of time it takes to close deals, changes in revenue over the years, and even which contracts utilized the most effective language. Whether your company handles thousands of contracts or just a few, this information could be the key to renovating your contracting process and maximizing your business potential.
So how do you access your contract information? Many companies may find themselves overwhelmed at the prospect of cataloging data from thousands of past and current contracts, but there are technological solutions available to help. In fact, the future of contracts lies in one of the latest and greatest innovations in the legal-tech space, contract lifecycle management (CLM).
What Can You Accomplish with CLM?
Many lawyers may be a bit wary of CLM technology at first. However, the goal of CLM is not to replace the legal department, but rather to enable its employees. This enabling is accomplished via the features of a CLM, such as automation and AI. Automation and AI work together to reduce the number of menial tasks performed by lawyers, freeing up their time to be spent on more pressing matters or even on strategic decisions that could pave the way toward accomplishing long-term business goals.
Aside from improving quality of life for lawyers and anyone else who touches contracts, CLM solutions also provide easy access to a huge amount of data. The cloud-based contract repositories inside these solutions often have search functions that allow you to pull up and review a document from anywhere, helping remote workers stay informed and giving anyone with access the ability to gain more knowledge about the company’s contracts. Backed by the knowledge of how your contracts are functioning, you may be able to make improvements to the contracting process that will help maximize revenue and save time in the long-run.
Obstacles of CLM Implementation
As with any solution to a problem, CLM is never perfect, especially in the early stages. You’re bound to meet with a few obstacles throughout your journey, but there are ways to prepare for those obstacles in advance. Let’s explore a few of the challenges you may run into during a CLM implementation as well as potential ways to manage those challenges.
One of the biggest problems that companies face during or after CLM implementation is user adoption. Shelling out money on a technology solution doesn’t necessarily guarantee that employees will make the effort to use it. Human beings are creatures of habit, after all. If using Microsoft Word and email has been working for employees so far, then why should they suddenly take the added effort to make the switch to a new platform?
There are many ways to facilitate better user adoption, but two that we recommend are training and champions. Without proper training on how to use a new software, users can easily become frustrated and give up, resorting back to the old way of doing things because it’s what they know how to do. Even if you don’t have the time to provide in-depth training to an entire department, you should at least make sure that anyone who will be working closely with the tool has a handle on the basics and that there is a troubleshooting method in place. Setting up a hotline that offers live-help for problems can be an extremely effective option.
Champions work hand in hand with the training aspect of user adoption. During implementation, select a handful of individuals who will receive intensive training on how the CLM solution works, to the point that they’ll know the technology like the back of their hand. These champions can then not only provide support for other employees who have trouble operating the software, but also talk up the benefits of the solution to their peers. Even the most adamant skeptics may be more likely to be swayed into thinking positively about the solution when they hear about it from members of their own workforce rather than higher ups. After all, those working alongside them understand their daily struggles and can better explain how the solution works to accommodate them.
Implementing a CLM solution is a massive change, not just for the legal department and those who work the most directly with contracts, but for the entire organization. Oftentimes, CLM implementation may be accompanied by a cultural shift within the company, integrating the new technology into the already existing structure and adapting on its behalf.
In order for a cultural shift like this to be possible, higher ups in the organization also need to be on board with the implementation and back it from the start. Executives may have their own expectations for the solution’s performance, as an expensive technological investment like CLM is typically not undertaken simply for its ability to improve quality of life. There are ROI expectations to be met as well. The key here is to understand and manage the expectations of executives. Be realistic in terms of what the solution will accomplish for the organization and the timeframe it will take to do so.
Contracts will not become efficient overnight thanks to the implementation of CLM. Technology is merely the tool that helps lawyers and employees from other departments manage contracts more efficiently. You will need to assess and re-evaluate your actual contract processes to make sure they’re optimized and ready to make the most out of your CLM solution.
There are numerous points of entry when it comes to adopting CLM into your organization. A natural first step is to evaluate and renovate your contract processes to make sure you don’t end up automating a clunky, overly-complex process. Simplified, streamlined contract processes are necessary to achieve maximum efficiency from your CLM tool.
Many companies also choose to begin by creating a contract playbook that will allow the CLM to draft simple contracts via templates and offer suggestions as amendments to contested clauses during negotiation. Before you dive into your contract playbook, however, you may want to consider integrating a contract repository first. This collection of data may make it easier to create the standardized templates necessary for the contract playbook, as you can utilize the language from actual past contracts that seemed to be the most effective.