Defining contract management processes with Tim Parilla

Made with speech-to-text software, so a few words may be off.

0:00Welcome to another episode of Contract Heroes, the show where our guests, and sometimes us, provide best practice recommendations on all things related to contract management. Hi, everyone, and welcome to another episode of Contract Heroes, where we're not the heroes, our guests are. We got a good one for you today, and thanks for joining us. Tim Parilla from LinkSquares is joining us. Uh, before we flip things over to Pepe to discuss what we're gonna be talking about today, I'd like to turn things over to Tim, have him give a, a quick intro, maybe a little bit more on his background and, and then from there, we'll, we'll dive into the topics for today's discussion. Thanks, Marc. Uh, happy to be here today. Um, I'm the chief legal officer at LinkSquares. I've been at LinkSquares for about eight weeks now.

0:59Uh, but most recently I was general counsel at DraftKings and, uh, spent the, the previous seven years there as first in-house counsel building the team, um, through the, through the astronomical growth and, uh, you know, and some of the controversy of 2015 as well. And then, you know, uh, thankfully to, to what by all accounts is, is an outstanding outcome for, uh, for the company with the, the transaction that took DraftKings public in- Mm-hmm... April of 2020. So now it's on to the next adventure at LinkSquares. Well, that's great. And, uh, you know, LinkSquares, LinkSquares is, is definitely, uh, gaining a lot of traction out there. Uh, we're bumping into it more and more and, and seeing other folks that are kinda turning to them to, uh, to handle their contract management needs. Uh, you know, Pepe, do you wanna, uh, give us kind of an overview of what we're gonna be talking about today? Yeah. We wanna talk with Tim to talk about some of his experience with some of their clients.

1:57There's a lot of things that we can, uh, talk about regarding contract management, but I think we wanna focus, uh, Tim, on what in, in your experience, what are like the main pain points that some of your customers that are looking for a CLM system wants to get solved? Yeah, absolutely. So I think, I think there, there, there are a couple of things. I think from a, from a general counsel's perspective, you're, you're constantly looking at whether your team is, is, is serving their internal clients within the organization, um, in a, in a way that keeps those clients happy. And anybody who's worked in an in-house capacity recognizes that one of the, one of the most important metrics that the business looks at by and large is how quickly they get their contracts turned around, right? When there's red lines and so on and so forth. Um, and so there's, there's always a desire to sort of at the absolute highest level minimize turnaround time, right?

3:03And that's, that's for contracts, that's for lit- uh, really anything that you're doing, right? And, and so, so from the general counsel's perspective, that's what you're looking at. From the person who's actually sort of looking at the contracts, reviewing the contracts, um, you know, at least in my experience and, and, you know, the teammates that I've worked with and, and when I was in roles where I was the one actually going through and, and, and reviewing those contracts and managing that workflow, for me it was, it was being able to very quickly and easily, um, alternate from one project to another. Right. And, and, and it, uh, 'cause, 'cause you think about as commercial counsel at an organization doing a ton of different types of agreements, like uh, commercial coun- like I'm not talking about something where it's like, "Okay, we have one agreement. We're making changes here, there, and going," right? That's... Like, that stuff is a little bit different. Um, here I'm talking, like, all right, you're doing major strategic deals, right?

4:10You're doing, you're doing deals that are not deals that you have a form agreement for, or deals that, um, you know, that, that you just sort of can push paper on people. Um, you know, these are, these are more deals that are heavily negotiated and so on and so forth, and they're kind of mixed in with sort of those form agreement deals that you do that just sort of fill time. They're super easy, usually have, you know, a, a pretty, you know, a pretty robust way of managing those, you know. Or if not, you develop one on your own, whether it's spreadsheets, whatever it may be. Um, but, but what's really, what can be really challenging is you're doing a deal with, uh, you know, with a major sports organization. Um, and then you go ahead and you send those redlines across, and then you're immediately onto the next deal with another major sports organization or a television production company or whatever, right? Or you're going and you're, you're dealing with a settlement agreement with some litigation that you have going on, or you're going and you're dealing with an employee matter, or you're dealing with something, right?

5:15You, you have just sort of all of these things going, and then five days later a contract comes back to you and your sales folks are like, "Hey, will you get on this real quick? Like, there's not that many edits," blah, blah, blah. And you're like, "I completely forgot that we're even doing this deal because it's been a week and so much has happened in that time," right? And so, um, you know, uh, there's, there's this aspect of, of trying to figure out how to best organize and get, get up to speed on all of the many things that you have going as quickly as possible. And, like, stating it maybe a little bit differently is that what, uh, as, as a leader of a legal organization, what I'm always trying to do is find ways to maximize the amount of time that my attorneys are s- are spending doing things that only my attorneys can do. Is every bit of time where they're doing things that like, like digging through emails to try to find history or chasing someone's like, "What is that person's email address?"

6:16Or like, "How many other versions of this agreement do we have?" Um, like that is not the best value for what is probably some of the highest paid, uh, people in, in the organization, right? So maybe I'll stop there for, for just a sec. It's a lot, I think. Yeah. There's, there's a lot of things, and I, and, and like in our experience with Marc, there are even some organization that they don't have all that process well defined before jumping into a, a digital platform, right? I don't know i- if you have seen that kind of, uh, situations where even w- with big corporation, that they don't have, uh, defined contract management, uh, process, and then they wanna move forward and to have a dig- a digital one. Have you... W- what, what would you recommend to people that want to become more efficient and, and when they're looking for a, for a, for a platform for contract management? I think probably the, the biggest thing is, is trying to figure out what the problem is you're solving. So are you trying to solve a problem where you're trying to reduce the workload on your legal team? And, and by workload, I mean the work that only your attorneys can do. Like, are you understaffed- Right... and you need a technical solution to help you?

7:45Like for example, let's say your, you know, you have your litigation department and, you know, there's only one suit going on, and so you have a handful of professionals in there who can manage, you know, the electronic discovery with the tools you have in-house and pr- productions and things like that. Like, that's, that's a very, you know, very reasonable thing to do, as opposed to like, "Oh, I need to go out and find a e-discovery solution." That, a lot of that is, like, volume based, like, "I don't have the people in-house, and so I need someone to come and help me, and some sort of technology to come and help me." Then there's the other aspect, where I have, I have the people to do the substantive legal work. If they're just, uh, you know, i- if, if there was just a way where they could focus on that work and weren't losing so much time doing other things. Um, and, and so, so there, I think as soon as you identify, identify that, it helps you to say, "All right, these are the most important things to me." Um, the other, I mean, the other side is the, the type of business that you're in, right? Let's say I'm in a business that engages in a lot of M&A activity.

8:57Well, now a lot of your legal work is surrounded, uh, i- it, or is, uh, is grounded in due diligence and building different types of disclosure schedules and things like that, right? Um, and so finding technology that, that provides the insight into your executed contracts becomes sort of the critical thing. So, so it really is sort of a first step identifying what, what your real needs are. And, you know, I mean, from, uh, from, from my perspective and, and what really drew us to, to LinkSquares in particular at DraftKings was that LinkSquares worked, was able to get that data out of our contracts, even though we didn't have a form contract.

9:47Like everybody else is like, "Oh, well, you either need to go and do this other thing, or we can help you going forward, uh, but you have to, you have to, like, basically customize and, and, like, self code every single contract you have." Which, which is kind of the problem in the first place because prior to, prior to using a, a, a contract management solution, a, a tech provider, most people, whether... And, and early stage companies, a lot of times it's the CFO who, who gets tasked with doing this, is like you're executing contracts, then you're doing your first round of financing or, or something like that, and you've got, you, you have, like, a spreadsheet with a list of all your contracts and whatever information you thought was important at the time. And then inevitably you go into your financing, and you end up having to build a disclosure schedule around some type of data that you didn't keep track of in your spreadsheet, or your spreadsheet's not up to date, uh, because you just don't have time at a growing company to, to invest in that, um, which is, which is extremely normal.

10:59Um, and so, you know, you, you really, uh, you really can't... Like it, it, it provides no meaningful value if you have to go and train software, right? Like, it really doesn't, like the time to value is so long, and it's so, it- it's just such, such a monumental, um, you know, consumer of your time to just to get on board, um, that, you know, it almost doesn't make it worth it. And I think that's, like when you look at the total addressable market for sort of the contract, uh, the, the, particularly like the pre-signature, um, pre-signature tools that are out there, like there's, there's, number one, there's no clear leader. Number two, the market penetration is extremely low, right? And, and that's why, is, uh, you know, there, there's, there's really, there really hasn't been any, anyone that, that reduces that time to value.

12:00A- and, you know, I mean, obviously, like what, what we're doing at LinkSquares with the finalized product, there's immediate time to value. I use it every day. But, you know, I think, I think that's, that's really kind of the biggest, the biggest thing, like some of the biggest hurdles that are out there in, in the space right now Yeah, and, and, you know, just going back to what we were kind of discussing before is, is understanding, you know, what is important to your organization and, and what you really wanna make sure you're getting out of a tool. You know, with so many options out there, you, you need to understand what is important to your company before you go out there and just start looking at, at random CLM tools because maybe they were on a Gartner report or, you know, you, you went on Google and, and maybe they're, they're the first ad that pops up. You know, you, you need to really do some, some internal discussions and, and discuss what, what's, you know, what's going to be important to the organization, what are we looking for, how fast do we wanna get this spun up?

12:54You know, is, is the, the post-execution important? Do we wanna get all of our contracts that are, we're, we're currently trying to manage into a system, or are we looking for something to help us moving forward? I think those are a lot of the questions that need to be answered before you go out there and start to do your research. Exactly. And I think, you know, if I'm, if I'm sitting in the general counsel seat, um, the other incredibly critical thing is reporting. Being able to, uh, to report... Excuse me. And being able to report on, on the activity of my, of my team, um, being able to say, like, "All right, this is what turnaround time looks like for this type of an agreement," is really important. Um, because, you know, as, as, as GC, you're just as much a business unit as anybody else, right? Mm-hmm.

13:46You're here to, you're here to enable the teams to execute, whether that be the product team, whether that be the, you know, the sales team, biz dev, what- whatever, right? Whome- whomever you're working with, you're there to enable. Um, and your, your, your chief executive is, and, and the rest of the executive team, is looking at you to be more than just a lawyer. Right? You have to understand what, what the impact your organization, your legal organization, has on the rest of the business. And any software that you get needs to be tailored to accomplish some defined goal. Right. And- Right... we, we talk about also, uh, the beginning about turnaround time for delivering a contract. And now that we're touching reports, what other KPI would you recommend on legal teams to keep an eye on, uh, when they're looking for, uh, when they're working on an implementation of a CLM platform?

14:46Well, I, what I think is, is also really important, um, is, is understanding what's in your contract. So, so to say, I, I'm not sure that it's necessarily a KPI as much as it, it is sort of like a health report. Okay. Um, I mean, ar- arguably, I guess it would be. But, um, you know, looking at, for example, the, the quali- the overall quality of my contract portfolio, where I can say, you know, X percent of my contracts have a termination for convenience in them, and that accounts for Y percent of revenue. Um, you know, X percent have, excuse me, have some automatic renewal language. Um, and you know, they're, they automatically renew, you know, some percentage of the time. Like, that's an important thing to understand, too, 'cause it's like, all right, well, if they only auto-renew 5% of the time, but you're redlining them 90% of the time, start thinking about how valuable that is.

15:46Um, so, like, there, there's different types of insights, too, that can sort of help you, help you craft and identify, like, what, what sort of major problems are, and all that is sort of in the post, uh, you know, I think on the, on the post-sig side of it. Um, you know, on the, on the pre-signature side of it, oftentimes it is important to understand sort of the evolution of the contract and, and sort of how versions move and, um, you know, under- understanding, like, okay, it took, it took on average five turns, right, to get to signature. Mm-hmm. Right? Well, you know, how does that change with dollar value? And how does that change with maybe vertical, right? Like maybe certain, so, like, if you're in healthcare versus in SaaS, right? Like if I'm, I'm doing, doing contracts with healthcare companies versus other SaaS companies, what does that look like?

16:38And what I'm getting at is you have a highly regulated industry from the healthcare perspective, and arguably not as highly regulated of an industry in the SaaS perspective. So, like, having those types of insights as well and being able to, being able to sort of cut and slice all of the data that's in your contracts and, and put them into categories is, is hugely valuable. And it's, it's an interesting insight, too. So, like, you think about it operationally, how can that help me to run my team and, and put myse- put myself and the organization in a better legal position? That's, that's sort of one thing. But selfishly, like, these are insights that the rest of the executive team is like, "Wow, that's actually really cool that, that you're tracking that. That's interesting." And it's like, yeah, well, you know, corp dev, let's talk about some of these deals and let's talk about sort of where we can, where we can, you know, find some efficiencies, 'cause I have these sort of common themes that go through all of our corp dev deals, whatever, right? And that is just an example. Yeah, and I think that's a, a big component.

17:41You know, what we always talk about is, is helping to move those law departments from, you know, from cost centers to revenue generators to show the true value inside of an organization, you know? And, and being able to work in harmony with other departments to make sure that these deals are getting pushed r- across the finish line faster than they were before and, and really proving, you know, the value that, that, um, the team brings to an organization. Yeah, absolutely. It's, it's critical. And, you know, and I think, too, um, my, my, my perspective has always been that software should, should enable, enable people to do things the way that they wanna do it, just in a slightly easier way. Right? Um, you know, imagine if, imagine if you had an operating system for an iPhone that was only in one language, right? That you gotta go and learn some other language in order to use an iPhone, right? So, yeah, like, it just doesn't make sense.

18:34And I think there, there are, you know, there are a lot of sort of CLM platforms out there that are like, "Oh, attorneys, I know that you're used to working in Microsoft Word and Outlook, and, uh, you just recently started using Slack, and, like, you think you're really hip and cool and on the cutting edge now because you're doing it, which is great. Um, but you know what? You're, uh, you need to use this other, this other tool now, uh, because that's what's gonna get you some sort of an efficiency somewhere. Oh, and by the way, your sales team is gonna have to also learn, like, now accommodate you as a legal team and learn how to use that," right? So, so it really is like, for me, it's, is the tool built in a way that's lawyers first, um, and is the tool built in a way that has the lowest friction for the value that it delivers? Mm-hmm, right. And that also bring us to another of the main struggles for a company looking for a CLM platform, which is the adoption of the, of the software.

19:44Because you, you can have an excellent implementation and you can have all the KPIs and reports in place, but once you want to start using that platform, some, a lot of companies, they just fail there because they don't know how to teach their, not only their legal team, but also the internal clients that are requesting all their contracts to use their platform. What, what have you recommend to, uh, any implementer or company that is, uh, uh, that is starting to use a CLM platform to, uh, to not have that much friction? Yeah, and I would say even to add onto that, Pepe, you know, I mean, w- what, what, how are, how are you enabling these, these companies to, to keep user adoption up? Right. You know, get, get folks excited and, and have them be ready and willing to, to jump on the platform and really leverage it to get the most out of, out of the money they just spent. That's, uh, that's a great question. I think, um, you know, I mean, obviously with, with my r- my role is not really a customer-facing role, so I haven't, I haven't really had much of an opportunity to, uh, to work directly with any of our customers and talk use cases, so on and so forth.

20:52Um, but, you know, obviously we just recently came out with the, uh, with the, um, salesforce.com integration to our Finalize product, which is amazing. Uh, it's, it's a really, really cool product. Um, you know, at some, at some point we've gotta get someone to give you guys a demo of it, but, uh, really, really cool, where basically, like, your lawyers can be working in Finalize, going, doing their thing, and, and, like, up, you know, getting, getting new versions of agreements, you know, passed to them, and getting new versions of agreements, edited versions out to, you know, out to the sales folks. The Salesforce f- folks stay in DocuSign. They don't even have to know, they don't even have to know that Finalize is being used. They're just right out there in, um, uh, in Salesforce. And then we also, uh, implemented the DocuSign integration, which is right in the Finalize tool, where, like, as soon as you get to, uh, as soon as you get to, uh, clean drafts that are ready for a signature, you click a button, it creates an envelope in DocuSign, and you put, put in someone's, um, put in someone's email, the other, you know, the signatory's email address.

22:02They go, it sends it just like any other DocuSign, and they click through, they sign. DocuSign sends them a final version. Final version automatically uploads and then is automatically given, um, uh, automatically signals that that agreement has been, has been signed and finalized, and then there you are. You're done. You're onto the next. And, and if somebody has any questions about like, "Oh, like, show me some of the life cycle," I just, like, I just type in the, type in the name, click on it. I've got all the versions right there. I've got emails back, back and forth in there. It's, uh, it's really, like, it, it's, it's really a slick platform that allows salespeople to continue to work in Salesforce. It's a tool for lawyers to keep things organized. And honestly, like, it's, uh, it, the time to implementation is about 20 minutes. Like, it's right there. It's awesome. That's great. And one more thing, Tim. So it's, it's, it's kinda hard for some legal teams to calculate what will be the savings on time and especially money when they want to implement a CLM platform.

23:13And some of them make a calculation depending on the time they can save, uh, regarding the salary that they give to any people that is involved into the contract management. But what would be your advice on legal teams in order to, maybe not a, uh, a general one that can be used for any kind of company, but what are some of the big points that they have to take into consideration for calculating the ROI for an investment in a CLM platform? It's a, it's a great question. I, you know, my, my view is that I think the, there, there's definitely time to value, right? Um, that, that implementation and that ease of use. Like, the longer you have to train somebody, um, the more challenging it's going to be to have broader adoption. Right. Right? Um, if I, if I have a team of 10 attorneys and they need to sit through a week's worth of training and then, like, uh, however long, you know, much longer of, like, setup or whatever, um, that's, that's a massive amount of time, um, that, that I need to factor in.

24:24And that's, that, that goes above and beyond the purchase price. But the biggest indicator for me is, okay, like- How, how often am I gonna have to have recurring training? And if this is that complicated that it's taking that amount of time to get my team onboarded, um, is it, is it really something that's enable- Like, is my team just learning another language, right? Going back to the iPhone example only, is my team really just learning another language? Um, so, so, you know, I think, I think that ease in implementation is really important. I think having, having the post-contract analytics is also critical when you're talking about the person who has to justify the spend, right? Right. 'Cause that's usually your general counsel, and so general counsel is like, "Oh, hey guys, this is going to, you know, I need this budget 'cause it's gonna make my attorneys work faster." That's, like, that's okay. But what's really going to pop with, you know, going to pop with, with the executives and, and your CFO too say, "Listen, this is something that is going to have much broader, much broader implications than just, you know, we're getting contracts done faster."

25:35For example, CFO, when your auditors are going through at your year-end audit and they're asking for a handful of different, you know, material contracts and maybe some of them that have been amended, like, eight or nine times and you've got, like, four or five different line items in your financials that, like, auditors wanna dig into, how many times have you sat there for days and days and days waiting for the legal team to bring you these contracts? That, like, those days are over if you got a good analytics tool. Um, you know, you look at any M&A activity that you wanna, that you wanna undergo, and how much money are you spending on outside counsel to review whether there's a restriction on assignment provision in, in, in your, uh, in your existing portfolios? Oh, and you know, and by the way, um, finance, wouldn't you like to know that 40% of, you know, 40% of our, our contracts that are tied to our income have termination on six months notice? Like, that's, that becomes immediately valuable from a data insight perspective, um, above and beyond just attorneys working faster. Yeah.

26:44Tim, I, I think those are some, some great insights, and I think those are things that are often overlooked maybe by, you know, folks that are more so on the business side of things that might be just put in charge of a project like this. It's, it's not something that they're gonna think about when, when they're going out there and trying to build that business case and, and prove out the ROI to, to show to the stakeholders that this is something that they need to really get implemented. Um, so, uh, Tim, we're, we're, uh, we're coming up on time here. Right. Really appreciate you taking some time to, to chat with us. I, I think this has been eye-opening and, and great to learn more about LinkSquares. Um, if, if folks wanna learn, you know, more about you or connect with you or, or more about the product itself, where, uh, where can they find you? Uh, LinkSquares.com, uh, or you can find me at LinkedIn, uh, Tim Parola. Uh, I'm the one who's CLO at LinkedIn. Uh, feel free to, feel free to add me, so Uh, all right, Tim. Hey, thank you. Thank you for your time. Thanks everybody for listening to another episode of Contract Heroes, and we hope to see you and hear you back soon. Marc, Pepe, thanks so much for having me. Sure thing. Thanks to you.