How To Avoid Common CLM Implementation Pitfalls - Bernadette Bulacan

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0:00You're listening to the Contract Heroes Podcast, your one-stop shop for all things contract management. And now here are your hosts, Marc and Pepe. Hello, everyone, and welcome to another episode of Contract Heroes. Today, joining us from Icertis, Bernadette Bolican. Uh, Bernadette is the chief evangelist at Icertis. She's also a global council member of the World CC, and has an extensive knowledge in the CLM space. We're very excited to have this conversation. So Bernadette, welcome, and, uh, we can't wait to get into this conversation. Marc, I'm so excited to be here, and I'm glad that schedules all worked out for it to happen. So we're, we're just gonna go ahead and, and jump right in, Bernadette. So, you know, the first thing that we wanted to talk about, how have you seen the, the CLM space and, and legal departments change over, you know, the past five plus years? Yeah.

0:58It, it's funny, I was thinking about not just the last five years, but, you know, I, I have been in legal tech and working with legal departments for over two decades. And if I think about two decades ago, like, we were still in paper, still, you know, still people talking into little microphones and little cassettes, you know. Like, that was, that was really high tech back then. I think I was, um, I was working with one legal department, and I challenged them to what was the most innovative technology or the most transformative technology. And of course, like, everyone of our peer group pulled out their s- their, their cell phone and said, like, you know, "This electronic tether actually has been the most transformative technology." Um, but I was reminded how multi-generational legal departments are, because their chief legal officer, clearly the most senior person in the room, the most tenured person in the room, had this look in his eye, and he said, you know, "The technology that was most transformative in my career was when we introduced the IBM Selectric typewriter."

2:04And he's like, "It wiped out an entire floor of word processors." And at that point, he wasn't thinking of, like, word processors, like computer word processors. I mean, he was talking about human pro- word processors. And I mean, I just share that because, again, like, we are, as legal professionals, on this incredible transformative trajectory right now. And for some, it feels like it's really slow going. For others, it feels revolutionary. But it has been, you know, whether we're talking about the last, you know, 50, 20, 10, the last five years I think has been incredible, especially for CLM. And I think CL- CLM is not, you know, is not new. Icertis has been around for 13 years. There were, there were clearly predecessors to, to us.

2:56But I'm just reminded that we are at a particular inflection where all eyes are on CLM, and it reminds me of five years ago, or maybe even seven years ago, when all eyes in legal tech were, was on e-billing and spend management. And it reminds me five years ago before that, when all eyes were on e-discovery. But right now, all eyes, all legal departments, and I hope we get to talk about why I don't think of CLM as, as legal tech. I hope we have to take a more expansive view. But I understand why, you know, why legal departments have their hands on it. But it is such an exciting time for CLM. I'm excited about all of the technologies, quite frankly, that are available. I am a believer that, um, on this front, as it did for those other trajectories, whether it was e-billing or e-discovery for the profession, rising tides lifts all boats.

3:54Having all of the, the, the, the options, I think, drives innovation for all of us. It makes for a smarter buying population and user population. So I'm really excited about that. You know, I think, especially when I look at legal departments, I am so excited for legal department operations professionals, and how, um, how this can be transformative to their career as well, especially CLM, because it, you know, for all these reasons that we'll talk about, because it, it, it, it extends them outside of the legal department. So I'm just so excited about what I see for the legal profession, for legal departments and their use of legal tech, what it means for the people, whether it's the attorneys that are practicing or these operation professionals that are really helping change the landscape. I just think it's such an exciting time, and I know that you see that, you see that from your seat. I definitely see it from my seat, you know, being within one of the tech, or being in technology. Yeah.

5:02And, and I think, you know, it's... I, I think we'll go ahead and jump right into, I think that's a good segue into, you know, why, why is CLM more than just a, a legal tech tool, and why should other departments be excited when, uh, the- their organization is out there evaluating vendors and, and looking to, to put something like this in place? Um, you know, how do you see other departments benefiting from, from CLM? Oh, gosh. Yeah, I was just on a panel, and one of the panelists said, "You know, if I had, um... If I could leave you with one, one idea, and it's that we have to eliminate this notion that, like, the contract is just the, the four corners of the contract and the words that are in there." Because when we do that, we only think about when the legal department h- holds that contract. Um, we only think about it as this collection of, of clauses and the negotiation, the, the hand-to-hand combat. And so I understand why- A lot of CLMs focus on legal departments because there is a hyper-focus on pre-execution items, uh, the pre-execution actions related to the contract.

6:11Are we using the right clauses, the battle of the forms, the negotiation, the red line? And clearly, there are opportunities using technology, process to, um, create efficiencies in that process. I think there is... But as anyone in the business knows, whether you are, you have a legal hat on or, uh, a line of business stakeholder, you know that all of the value related to that contract is realized after execution in the hands of, of others. And they're not the ones that are concerned so much about limitation of liability or kind of all of those clauses that the lawyers are, like, so incredibly, professionally, um, expertly negotiate. Those pieces that drive value are those ones that belong to the business. So that statement of work, the delivery, acceptance, all of those things belong to the business.

7:13And so what we encourage legal departments to do, espe- and, and legal officer professionals, especially as they're thinking expansively, is to think about what happens to the contract before it ever comes to legal and ask, d- should it come to legal? Do we have policies where we're, policies and processes and technology that enables the business so that a certain level of agreements, high volume, low liability, don't ever have to be reviewed by legal? And w- so that's everything kind of before it gets into the legal department. And then can we think of ways to, um, can we think of what the contract looks like outside of legal, and what the business needs to perform and realize the intent and the purpose of those agreements? So again, I think if we have this expansive view, right now a lot of the technology and the processes focus on that portion when it is in the legal department, and understandably.

8:20But I think if you wanna realize the value of enterprise-wide contract life cycle, so looking, like, the, the, the operative words there are enterprise-wide, that these, these assets benefit a wider range of stakeholders within the business. And then the life cycle is not just the time that it's within legal during that, during that, uh, during the pre-execution portions of that life cycle. Um, and I think if you have this expansive view, not only will you find efficiencies and take out friction across the entire life cycle of, of contracting, you'll also find data that will, again, uh, just be a, a value multiplier for an organization at, at enterprise-wide. Right.

9:11There's, there's a lot of things that you can do with the CLM, and one of the main reasons why a lot of the companies are seeing the benefit on not just automating the, the, the management of contract, but it's just, uh, communications between the whole company with the legal department, right? Because at the end, the manual is, it's, the, a, a contract is the manual of every commercial relationship you have with external parties, even either if you're on the buy side or, or in the sell side. And when you see the, the contract is, is a technicality because at the end, the ones who wants to close the deal is procurement, it's sale, they, they just want to bring new vendors, uh, faster than before. Or sales, they just wanna close a, a, a deal. And there's a lot of things that people, not only, like, companies, but the people inside the company needs to work with each other so you can have, like, a very, uh, efficient CLM implementation, right? Yeah. Because maybe the technology is going to facilitate you, like, some of the automations, but you still have to go to the basis, like, what are, like, the, do you have to, uh, reasonable terms so, so you can close that deal?

10:23Because if you, i- if you can automate, you know, all the administrative part, you still have to work on the clauses. And there's a lot of things that, that you gotta do before jumping into technology. And, well, I think we've been on the space long enough to see the CLM implementation f- fails, right? Because there's a lot of things that you gotta take care of before, uh, doing this. And, uh, so Bernadette, I wanna ask you now that, like, what do you think are some of the pitfalls to watch out for when starting your implementation? Yeah, Pepe, I think you hit the nail on the head, right? Which is- ... CLM technology, um, can be incredibly powerful. It can do a lot of things. And companies want it to do a lot of things, but they try to do it all at once. Um, and so I think one of the pitfalls is they fail to kind of create phases around that implementation.

11:21And so I think the companies that I've seen have been most successful have been to have a really large vision, the vision that I just described to you. Not what it can just do in this department, um, not what it can just do, you know, post-execution processes, pre-execution processes. Again, it could do so much, and what they fail to do is to talk, think about what can we do in smaller phases, whether, um, whether that is with a particular clause template, maybe a particular region. Like, whatever that MVP might be, what, it, it brings so much value to the, to the long-term implementation. I was, um, I, uh, was recently comparing it to, to kind of running a marathon. And that, like, you need to interval train. Sometimes you're going to be sprinting, and you're gonna learn a ton in that sprint.

12:18There are gonna be some actions that are gonna, or some phases that will be kind of longer sprint, uh, longer, just longer runs, maybe up a hill, and you're gonna learn a ton there. But by breaking it out into phases, you will get incredible dividends. You will have a better understanding and playbook about what these implementations should look like, what information you need from, from different stakeholders, what technology, how they think. That will make you faster in the next, in the next phase. It will create a team of champions and confidence so that you have people saying, like, "They, they were able to accomplish this, and I have great confidence that they're going to be able to accomplish something even bigger at the next implementation." I mean, I think just those two things, having that playbook and that knowledge, um, and then creating a team of champions that have, that can actually see outcomes, will help you with each of the successive implement, uh, phases after.

13:21So that is- Right... to me, one of the biggest pitfalls. I, I would also say the second pitfall is not having a strategy about integration. So I know we've been talking about processes that need to happen. One of the processes that I think needs to have some more time is what systems are we going to integrate into. And again, Pepe, you were talking about, like, about data and the importance of having contract data. I want organizations to think about not just having CLM data, but what happens when you can take that data and easily integrate it with other enterprise systems data. And that goes back to Marc, the conversation we were having earlier. It is not just CLM data in a silo. It, that is, that... Don't get me wrong, incredibly powerful, but the force multiplier is contract data mixed with other enterprise data, whether it's, whether it's CRM data because you're a sales, ERP data, human resource, you know, data from, from those systems.

14:27That is where, um, you are gonna see incredible dividends with your CLM. And again, that is not just a legal department play. It is a wide play. And I think if you, your, your, uh, enterprise-wide deployment will benefit if you have that strategy in place. Right, and it will also help with adoption of the new software, right? When you do it on phases, because if you wanna go with the whole company, all the regions, with all the different de- departments, of course it's gonna take longer. And because- Mm-hmm... I mean, it's, it's a, it's a big change always when, when, when you wanted to, uh, implement a new kind of software. And you need champions in every department so they can explain why is this going to be useful, so it doesn't look for the rest of the company like, "Oh, we have to learn how to use this new piece of software because legal department wants to, uh, to, to-" "... close contracts faster." It's not like that. I mean, it's going to help you because in that way you will be able to maybe not having to knock the door all the time to legal de- department when you need a contract.

15:35Maybe you, by this way, you can become like a self-service contracting department for certain contracts, right? Mm-hmm. It always, there, there are, there are some that we need to review it by legal. But, and I love it when you said about the data because I think that this, when you do a CLM implementation, this is a long-term relationship. You use the data, you analyze the data, and then you can see how you can make it even more efficient. Mm-hmm. How you can make your contracts, uh, shorter, or you can make the negotiation process shorter. And well, with having the data you need on, at your fingertips is important for every department. But what does this mean when it comes to contracts? Oh, gosh. I think that is the question that every department that is going through CLM needs to ask themselves and their business partners. I, I... And it goes back to, again, like these systems can capture so much data. I've been, when I work with organizations, I, you know, I break it out into kind of a, a crawl, walk, run.

16:39I think a lot of organizations, first of all, just have no idea kind of all of the contracts that are at, at hand, just the, the number and volume of agreement, the number, the, the value, the actual commercial value of all of those agreements, where those agreements are stemming from, whether it's a business. Especially if you're in a legal department, I'm constantly thinking about staffing and resourcing. So who are the clients, my internal clients that are, are using the most resources and, and, and why? And so I think there's just kind of landscape data, and that, those are just data. Those are not insights yet. They are not KPIs. That, that is just raw data that you can co- collect. And then kind of as companies mature, we see them looking at things like turnaround times or taking a look at deviations, whether it's deviations in standard language, deviations from, um, workflows and, and processes, 'cause I think that's where there might be some unhidden risk that, you know, when you actually aggregate those deviations, that can become, that can be actioned. You know, a good example there is, you know, we see organizations taking a look at where, where they see deviations in language and thinking, "Is this a issue with my template, and do I need to change my template?

17:58Has market, has the market changed, so this is no longer market acceptable? Um, or is there a range that I can share with my business team so that we don't have to have that negotiation? We know that, you know, from here to here, it's actually acceptable, acceptable risk that we're willing to take." Um, or maybe it's a question of having to better train my teams on that template and best practices or creating a playbook- That reflects some of the data that you see. I mean, those are the things that I get incredibly, um, excited about for legal departments, uh, and for the business, is how this data will change behavior, change behavior and, and, and take friction out. But again, the way that you get there is you build really great and deep data pools, and you do that with really strong implementations and technology. And I wanted to double-click on something that you said earlier.

18:57It is about relationships. It's the relationship with the, with the technology provider and having the right team there. It is about having the relationship with the right service provider that, and, and c- advisors like yourselves that c- have this experience, that have know, that have several reps under their belt. Those are the types of relationships kind of holistically that will help with those implementations. And if you have that, if you have the right teams, the right technology, th- the byproduct of that is all of this rich data, um, and that's what's m- really exciting, again, for organizations when they realize, like, the full value of CLM. Yeah, and I, I think, you know, throughout this conversation, everything that we've been talking about is connected. You know, we're, we're, we're talking about data and being able to pull that up, and, and, uh, it's going to allow legal teams to become part of that conversation when they're talking with other departments to show that they're not just a cost center.

19:59Um, and, and that comes back to you need to make sure that the tools that you're evaluating have that functionality. Um, so y- you know, I always think that it's important when you're out there evaluating these tools that you are bringing other parts of the o- organization into the conversation so that you can get an understanding of what's important to them. Because what's important to, you know, the sales team or the procurement team, you know, those are gonna be different things, maybe even different functionality or different parts of the tool that are gonna be important to them. But, you know, at the end of the day, what that allows you to do is, is leverage th- these applications to help you build stronger relationships inside of the organization so that all of the information obviously isn't siloed, but also so that the departments aren't siloed. Yeah. You know, I'm reminded of a story, Marc, about just how legal departments and legal leaders are using data, you know, again, just as you've described, to demonstrate the value of, of their department. And again, it's not anything that we learn in law school about how to use data, right? Like, the, I mean, how many attorneys even use l- Excel, right? Like, like...

21:06And so, you know, I'm reminded of this story about this young general counsel, and he's about to head... He, he shared this with me, and it was about how uncomfortable, the story is about how uncomfortable he was using data. And so what had happened was he was going to his first board meeting, and again, he grabs his, you know, the trusty yellow pad of paper that every attorney has, and he goes to his head of litigation, figures out, you know, gets a couple of bullet points. He writes it down. He goes to his head of M&A, same thing, couple of, couple of bullet points. Goes to his head of commercial contracting, a couple of bullet points. And so he goes into his first meeting, and he's so excited because he has all of this, all of these anecdotes, anecdotes that he's going to share. And so in this board meeting, the h- the chief revenue officer stands up, puts a PowerPoint on the screen, and, you know, shares kind of numbers, pictures, stories.

22:01You know, he talks about the contributions in a quantitative way that his team is making. The chief revenue officer sits down. The head of marketing does the same thing, number of picture stories using data about his team's contributions to the business. And as, like, each successive leader in the C-suite does this, he is like, he says he's just melting inside because he doesn't have this PowerPoint. What he has is his trusty yellow, you know, attorney, you know, legal pad, and it's just not cutting it. And he said, you know, "It was then that I realized, you know, if I wanna be at the table, I have to speak the language of the business, and the business speaks in numbers, pictures, stories." And so that was the catalyst for him to start to understand what data he needed to showcase the contributions of the legal department to the entire business. What numbers, pictures, stories could he tell?

23:04And I think legal departments and general counsel now have the power to tell really rich data stories because the technology is there. And so, you know, going back to our earlier conversation, it is not that you have to measure everything, but you have to be really clear about the story that you want to tell about your legal department and its contributions. And again, with the right technology, the right partners, we will be able to extract that data and help you tell, uh, uh, to tell that value story using the language the business does, which is numbers, pictures, stories, you know, quantitative, qualitative charts and visuals to do that, so that, again, you are still, yes, you are a business person. You just happen to have a legal hat, but you have all of the assets, all of the data to tell that story, and that is, you know, when people talk about, like, "What's your contribution?"

24:07That's how we have to change our, our mindset about, about data. You have to, as a leader, whether it's a legal leader or otherwise, know what are the numbers, picture, stories that you want to tell about your contribution to the company's overall objectives, purpose, and mission. Yeah, and the, you know, the CLM world is growing a lot, and as, as we've been discussing now, there's a lot of things that you gotta take care, right, in order to have a successful implementation. H- which kind of... You gotta know which kind of pitfalls you have to avoid, right? Because the implementation process, maybe does, that's like the marriage, right? But once you, you go live, then you gotta have, like, somebody who can support you during the adoption of the software. And there are a lot of consulting firms that, you know, uh, coming up in the space, and, uh, a lot of have some experience during the, doing CLM, maybe some others doing just, like, workflow, some others just doing, like, automations.

25:09But, uh, how do you know which consulting firm or implementer is good for your organization? Oh, gosh. Well, we work with some of the most trusted partners, like yourselves. Um, and again, what we are looking for is, l- let's be frank, this market is still quite new. It is. But, right? And, like, there is this sense that we are all a little bit building the airplane as, as we are flying it. But, like, these planes are fl- they are in fact flying, and we look for trusted partners. And we've been around long enough now to understand who those partners are. I find that the, kind of at a qual- a qualitative level, it are those that listen, that understand and take the time to hear the challenges and the pains that not just the legal department is going through, but again, encouraging the legal department to understand all of the stakeholder pains. And have done that on, on several, like, they, they have a lot of reps. I think those partners that understand that the end goal, yes, there is a milestone.

26:21Your going live date, your launch date, that is a gigantic milestone, but that is, it is a milestone, it is not the end of the journey. And I was using the analogy of a marathon. Well, we know there's an end to a marathon. It's, it's 23.2 miles, but, right? And so there's an end. But that's actually not, it's actually not a fitting analogy, because we know that you can come to an end, and there's still another, there's still another marathon to go, whether it is a new geography that you're launching, or kind of new technology and functionality that you need. There will always be something. So those partners that not only get you to those milestone events, but are also there with you post those milestone events, knowing that that is absolutely a victory, and you're gonna share and celebrate in that victory, but knowing that there's still more work to be done, those are the people that we wanna, that we wanna align with. People that take the time to listen, that bring a ton of experience to bear, and then who are not just there at this end date, but will travel this road, this proverbial road with you long after, knowing that it is this constant never-ending journey.

27:44Yeah, and, uh, you know, I think this whole conversation really revolves around, um, you know, one, you ha- obviously have to be aligned internally, but, but also externally with, with the software provider that you go with. And if you do have an implementation partner that, that isn't part of the vendor, you know, you need to make sure that they're, everybody's on the same page, and, and that you're all working towards that, that common goal and going on that journey together. You know, and I, I really think that that starts at the, the beginning of the planning phase to make sure that, uh, you do understand the solutions that you're evaluating, you do understand the capabilities that they have, you are bringing in other stakeholders to make sure that everybody has a, has a seat at the table so that a year or two down the road, you know, you're, you're not having to go through this process all over again because you find out maybe your tool doesn't integrate with some of the other applications in your ecosystem, or it, you know, it's not flexible enough to, to do the things that you need it to. And then also, you know, Bernadette, that last piece that you touched on, right?

28:36It's, it, after the implementation, you don't want somebody that's just going to disappear and, and turn and burn and try to go to the next, the next customer. You know, I, I think it's super important that you have somebody that is there to hold your hand, to answer questions, you know, put together some type of package so that even if you, you do have an admin who's, who's working with the system and understands how to configure it, that you have somebody there to ask questions to, to make larger changes, to do admin training. Things like that are, are, you know, what we try and, and are hoping to do for our customers, because we want them to continue to succeed and we want to continue to go on that journey with them. Oh, yeah. Right, and that journey is one of continuous improvement, right? And that is what we aim to do. So again, there, there, there will always be different roads that I've described, like new functionality, new geographies. And for the SOW that you just comple- completed, continuous improvement, that is exactly what we want. That has to be central to how we approach CLM and, and its deployment.

29:37Hey, but Bernadette, this has been, this has been awesome. As we always say here, I mean, I, I think that the folks that we have on this show are, are so passionate about CLM, and you're obviously no different. We could sit here and talk about this for hours, but we do try to keep these episodes fairly brief. Uh, so we wanna thank you for, for coming on, and if folks wanna connect with you, or they wanna learn more about Icertis, or, or any of your partners that are out there, where's the best place to do that? Well, you could always catch me on Twitter at InHouseBern. That's one way. But you can find us at www.icertis.com. And of course, you know, Marc, Pepe, we're just so incredibly grateful to have great partners like you. And so find us through great partner like Koho, like Marc and Pepe. Well, thanks, Bernadette, and thanks everybody for listening to another episode of Contract Heroes. We hope to have you back here real soon.