LIVE: Increasing Legal & Procurements Value Through Technology - Steve Brown

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

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, everybody, and welcome to another episode of the Contract Hero Podcast, and this time we have Steve Brown. He's the senior manager, uh, legal managed services in CLM at EY Law. So welcome to the show, Steve. Appreciate you having me. Thanks, guys. Really, uh, it's a pleasure and look forward to the conversation. Awesome. So Steve, there's a lot of things now, uh, well, now with the, we are the Words to See event at, at America. CLM is a big, uh, you know, uh, uh, big piece, uh, on the market, but there's a lot of things that you gotta take into consideration when you want to do an implementation of optimization of processes or just implementing, uh, CLM. Like, in your experience, like how can you start to bring like stakeholders, or what is your recommendation way when you start, uh, working with, uh, with your customers? Yeah, no, that's, um, it's a good question.

1:08So, um, contracting, um, it- it's one of the, the, the biggest team sports that an organization has, right? It involves many different stakeholders across many different functions, and so, um, contracting change initiatives or transformations or optimizations, whether it's implementing new technology or, or optimizing processes or, or policies, so on and so forth, um, inevitably affect many different people in the organization, right? And so it becomes really important upfront to, um, to, to, to socialize what you're doing and define some shared objectives, bring these stakeholders together, whether it's legal, procurement, or sales, right? Um, finance, accounting, tax, privacy, compliance, audit, all the, all of these different stakeholders that play a role in the contracting process, either as a reviewer, an approver, somebody that's consulted, right? Um, because, uh, all of these people play a role today typically for, for our clients, right, that are looking to optimize. Um, and it might not be a defined role, right? But they have a, a role.

2:12Um, and so it's important to socialize the objectives and get their feedback early and often, um, defining objectives upfront with everybody's interests in mind. And right, sometimes you have to come to, um, you know, um... There are negotiations, right? You can't please everybody, and some, there, there are consolidations that have to be made, but it's important to have those conversations upfront because if you don't, right, you're gonna have, um, issues later on, or people that speak up and can be disruptive, um, later on, uh, once you're trying to implement the change. Um, so I do, I, I, I would say for, for our clients, whether you're a large, complex, multinational organization with multi different pro- mult- with, with many different processes that you're trying to streamline into something more single and streamlined, or a simpler organization, um, that's really just looking to improve on your existing process to make it more efficient and effective, it's really important to identify your stakeholders, bring them together early and often, define a vision and objectives, and then use those, um, as your sort of north star, right? Your guiding light in every decision that you make as you go to optimize your process, define your policy, figure out what technology functionality you want to, um, implement, uh, so on and so forth. And, and, um, you know, having seen many contracting change initiatives succeed and many fail, um, or just take longer than they should, that's typically one of the, the main root causes, right, for success or failure. Right.

3:49And, and, you know, when we, when you do see that those projects tend to take longer, I think in our experience, we, we see that when, um, folks either try to rush into something, or they don't bring all the stakeholders to the table that should be there, and then they end up having to take a step back. Um, i- is that similar to, to what you see? Is there anything, you know, different there that, that might also be causing issues? No, absolutely. I, I think that's exactly right. Um, you know, something as simple as, um, you know, implementing a, a, a, a control, uh, and a, and approval routing for tax, for instance, right? Um, if you don't have enough, uh, discussion and thoughtfulness upfront with your tax team around, you know, "This is how we do things today, this is how we ideally wanna do things in the future," um, and you don't consult them, you may find yourself in a situation where they're not seeing what they should be seeing, or they're seeing way too much more than they should be seeing, and then that creates friction, right? And that creates rework.

4:47Um, and, and, you know, uh, it, it delays, uh, you know, can, can delay an implementation, um, and create a lot of friction in the process when that conversation really should have happened upfront. And it's, it's tough, right? And that's why having a partner that's been there and done it before can be a big advantage because they can help you see around the corners. Um, it's really hard to predict the future and know all of the different, um, issues that could come up unless you've been through it before, right? And so that's where clients like to lean on, you know, folks like us and other consultants who have, who have been there, just to help them see around corners and, and predict those things, so you can have those proactive conversations so that you avoid, you know, issues and delays and rework later on. And what about data? Like, which kind of data do you think... O- of course, it depends on the vertical of the industry and, and in the enterprise, but in your experience, which kind of data are your customers or these e- enterprises looking for to monitor to know, uh, how they can reduce the time cost, the turnover times, like, uh, or any other kind of report that they would like to have?

5:54Yeah, no, that's a, a good topic to discuss, um, because I think when you're doing that initial visioning and objective setting, it's important to define- Success criteria And how you measure it, right? Uh, and, and measure it, right? It has to be quantitative, um, as much as you can. There's, there's some things that are qualitative in nature, but, but you wanna get, get some quantitative measures as well. And we see clients looking at things like cycle times, obviously, total cost of ownership, um, customer satisfaction, um, you know, for, for, for different stakeholder groups involved in the contracting process, measuring their, um, you know, satisfaction with the process today. Um, but then the qualitative, you know, what would you do better in a perfect world? What would raise this from a five to a 10? Or why didn't you rate this lower? You know, what is working, right? Um, and so those sorts of measures, I think they're really important to define upfront, measure upfront so that you have a baseline.

6:46And most clients, you know, I've found haven't d- you know, aren't really mature in terms of the measurement of, of contracting, um, in their current state, and that's something that we typically help them with, right? Um, when we're assessing their current state and helping them figure out their opportunities is just defining some baseline measurements that they could use to compare against so that they know whether or not they're achieving their objectives and whether, you know, they can, they can help use, um, those, you know, that data to, um, to, to further the initiative, to expand the initiative, to grow it, right? To, to help tell the success stories. Um, things like, um... What else is there? Yeah, cycle time, cost of ownership, um, percentage of contracts that route to different groups, right? Like legal or, um, or, or other, or other stakeholders being able to measure that. Um, you know, because, you know, the legal team, for instance, for procurement contracts may feel like they are, um, being pulled into, you know, a lot of contracts that they, that, that don't really meet the, the threshold that, that they feel like they, um, need to review or, or vice versa. Right.

8:02Um, and, um, it's important to actually quantify that, right? And it's tough when a client doesn't necessarily have a technology-enabled triaging process or workflow, right? And it's all manual. And a lot of clients, you know, that we're working with are moving from a very manual process and aspire to be more tech-enabled. Um, and so sometimes you have to, um, you know, do some sampling. Literally ask people to, to, to manually track these things on spreadsheets. Um, we even have, have done with clients, we've, we've asked them to, um, stopwatch the- The time it takes... for certain contracting activities because, um, you know, if they say, you know, "It takes us forever, um, to enter contracts onto this manual tracker that we have," um, well, we s- you know, and they say, "We wanna make it more efficient," we say, "How, how much more efficient, and how much time does it take you today?" Um, and, and the only way sometimes is to have, you know, folks manually track it for 10, 20 contracts. And it doesn't have to be 500 contracts, right? It doesn't have to be necessarily statistically significant.

9:08Um, but you have to have something, um, you know, as a baseline. Right. A- and we've seen that trend a lot, that they try to make, uh, some departments self-service contracting. Like, you can set s- certain thresholds. So which kind of contracts do you really need to send them for legal, right? Like, such as NDAs with a new vendor. I mean, you don't need to, to, to send that to a legal, right? Like, somebody inside procurement can just, like, fill that out with the information and maybe just, like, some description o- of, of the services and just send it using an e-signature, and that's it. Well, you would think so, um, but certain legal departments that we've worked with are much more risk-averse, and even a co- a, a contract such as a simple NDA, um... Maybe that's a bad example, because most of those, I think even the strictest legal departments would agree could be self-serve. Okay. I've seen situations where they've been reluctant, right?

10:01And that, that's where it's very important, right, to not make those decisions without really consulting them, thinking about... And, and, and even if they, there is that barrier, you have to be able to paint the picture of what's in it for them. How is this going to make their lives- Right... easier? Yeah. Right? Um, that's critical. And once you actually have that conversation and just change the way that these stakeholders are looking at it, because they're looking at it from a point of view of risk and protecting the company. Um, but once you start to, to share with them, you know, the point of optimizing processes and implementing technology is to establish these controls that could actually make you more effective- Mm-hmm... at mitigating risk, um, and then get this work off your plate, um, they start to see the light and come around. Um, but you know, it, it takes a certain level of credibility, right? Um, so that's why I think oftentimes clients are bringing in an EY or another consultant, right? Because we can bring that credibility.

10:58Um, but also building success stories, measurable data, and then, you know, starting small, right? We never recommend boil the ocean approaches. It's always start small, build some endorsers, some success stories, some s- credibility, socialize that, ev- evangelize it, and use that to expand. Right. And, you know, and I think it's... I mean, all legal departments, right? I, I think that up until recently, uh, now that, that more are implementing pieces of technology like CLM, you know, their, their value is always to be in... Or, or they were trying to show their value through being involved with every contract that was going out the door because they thought that that's how they were bringing value to their organization and, and showing other, uh, you know, departments that, that that is what they did. And, and I think that, you know, what you just touched on is, is saying that, "Hey, we're gonna take some of this stuff off your plate. We're not decreasing your value.

11:55We're actually gonna be helping you to work on more important things, more important contracts, more important tasks throughout the day, because we know how valuable your time is." And I, I think that that's one of the things that, um, sometimes it's hard for legal to understand that until they're really, you know- implementing this software and seeing how, how their processes are going to be changed for the better so that they can help the organization even more than they did before. Yeah, absolutely, right. Um, and it, yeah, I, I think you're exactly right, and then you just made my mind go to another place, which is, you know, then some... With large organizations, you'll have a procurement, sort of a professional services lead that might have legal as a category, right? Um, and they'll be thinking about it from a different perspective. Legal, they have... Look, they have great intentions, right? They're coming from a good place. They wanna protect the company, um, and minimize risk. Um, and if they don't know of a better way to do that, if, if you know, which, um, you know, these types of conferences, by the way, we're here at World CC, these types of conferences help, right? Because, um...

12:55And I think we've made big strides over the past five years, um, in just understanding how technologies can, you know, enable better self-service, but, but with the right control and, and help to shift some of that work off, off legal's plate without increasing risk. Um, but from, like, the procurement professional services, you know, legal category lead point of view, they're probably looking at this and saying, um, "This is a big opportunity to cut cost." I had one company that I was working with where, um, you know, procurement and legal combined were spending over 50% of their time on contracting. Um, and when we dug into the data, we found that most of the contracts, I think something like 80% or more, were low value contracts that didn't generate any cost savings, so procurement wasn't, um, you know, it didn't really benefit procurement to be involved in these agreement. They were ba- they were, they were basically paper pushers, right?

13:54Um, they weren't actually involved in the sourcing events, um, or negotiating these contracts. Um, and so they were relatively low risk, low dollar agreements, um, you know, that, that legal didn't necessarily have to be involved in, in either. And so there became an opportunity to, um, you know, how can we get these off of our folks' plate? And this didn't become sort of a head count reduction, cost reduction necessarily exercise. That wasn't their goal here, but it, it could be for certain organizations, right? An opportunity, you know, to, to, to take out cost, um, which could be a big win for procurement. Um, for this organization it actually, to your point, it, it, it was, um, an opportunity to shift folks to higher value activities. They were suffering with, um, poor morale. Um, I think folks just didn't feel like they were, um, focusing on high value work, sort of, you know, top of their degree type work, and, um, and attrition had made them very lean. Um, and that combined with having to just process a lot of low value, low dollar agreements where they're not adding value just created this sort of toxic environment. Um, and so there was a real opportunity for them to find a better way through tech enablement, process optimization, um, to, to shift this work to a different model.

15:19And how do you work with your customer, let's say, uh, like post implementation, let's say, with, uh, with the CLM? Because, you know, like this is something that you need to improve over time, right? So maybe at the beginning you find out that there are some bottlenecks there, there are some pain point for a different department. But once you have all that ready and let's say the CLM implemented, what happens afterwards? Like, how do you keep helping your customers to keep improving their processes? Yeah. Well, look, I mean, ideally we wanna set our customer up for success, um, by letting them know early here are the different, um, competencies that you need to establish beyond just identifying your requirements, engineering the processes that you need to make the technology functionality work, defining your controls and your policy, so on and so forth. You're also going to need, you know, uh, to maintain this. You're going to need a governance model, a, a, a, a, a dedicated, um, process for keeping this up to date as your policies evolve, as your process evolves.

16:24Um, and so rather than them having to rely on us for that, we just try to, again, help them see around corners, understand that it's more than just buying a technology, implementing it. It's more than just defining those upfront processes. It's understanding that this is not a point in time exercise. This is a living, you know, breathing process just like any other one in the organization, um, that needs defined resources, dedicated resources, um, rather than, you know, um, telling them that, uh... I mean, I, I, I think that's our, that, that's my approach personally. Right. No, I, I, I think it's, it's interesting, right? And I, I, I... We see a lot of organizations and, and I think you see a lot of larger organizations that are, are starting to, to really understand that this is part of a process. It's not just a point in time. There needs to be some type of, of game plan put in place so that they can continue to evolve and not get to a point where, um, they just start to use specific parts of a system and, and that's all they do, right?

17:28You need to be able to continue to grow and scale just like your organization is going to. Uh, and I, I think that's why it's, it's so important, um, you know, that things like you guys are doing, we're doing, uh, out here to, to help these organizations, uh, is just so important. Uh- Absolutely. So Steve, this has been a, a fantastic conversation. Really appreciate you coming over and, and having a chat. If, uh, folks wanna connect with you or lea- or learn more about what EY Law is doing, uh, in this area, w- where's the best place to do that? Uh, here at World CC or generally? Just generally. Generally. Just generally? Well, you can obviously reach out to me, steve.t.brown@ey.com. Um, you can go to our website, just search EY Law on Google, you'll find us. Um, many folks may not know that EY has a, a budding law practice. Um, we don't practice law in the US, we do outside of the US. It's an important disclaimer. Um, uh, but we do a lot of legal operations consulting and other work here in the US for, for large corporations. So look us up on Google or ey.com.