October 21, 2014

Upcoming Webinar: What is Contract Lifecycle Management?



Contracts serve as the backbone of the modern business. They contain nearly all the information you need to be able to assess the health of your business and your business relationships, both internal and external. The best Contract Lifecycle Management (CLM) solutions available today not only automate contract creation, they import key data points from legacy contracts, so you can search, sort, share and report on the data of your entire contract portfolio.

In order to better explain what we mean by "the best solutions," we're hosting a free webinar on CLM. Think it might be interesting?

Are you...

        unsure where your contracts are or how many you have?
aware that you could be giving more to and getting more from your contracts?  
losing time and money on inefficient, manual-heavy or nonexistent contract management? 
blinded by lack of visibility into your contract data or frustrated by the bottlenecks of sales contracts in the legal department? 
interested in learning more about about how you can organize and share information with colleagues and how it can help your bottom line?
If you answered yes to any of the above questions, or just simply want to know more about CLM, you are invited to join us on Wednesday, October 29th at 12pm EST (5pm GMT).* The webinar will be free, brief and objective. 
Led by Grant Ramsey, our VP of Global Solutions (and all around great guy), this introductory yet deep-diving session is perfect for those who have never heard of CLM, have seriously explored implementing a CLM solution, or are at any stage in between. 
To register, click here.
*If you can't make it to the live webinar, register anyway to receive a link to the recording.

October 09, 2014

What's Wrong with Contract Management Software?

With time, CM software vendors will grow to
match the breadth of the existing opportunity.

In a recent post on his blog, Commitment Matters, Tim Cummins of IACCM observes that, while the usage of contract management (CM) software has increased substantially in recent years, it hasn’t quite lived up to the original hype. As a CM software company, we agree that many vendors and companies alike have been slow to recognize the full range of potential benefits from CM. Instead, vendors have specialized on one or two dimensions of CM – such as centralized storage or speedy drafting – while neglecting other parts of the contract lifecycle. The degree of customization thought necessary to meet individual corporation’s unique needs has often led to a cumbersome end-user experience, which discourages use, thus undercutting the inherent value of the solution.

But before you resign yourself to an eternity of contract blindness, there is hope. Many companies actually do get many things right. Tim mentions some areas – here in quotation – that he claims could jumpstart adoption, namely:






Data: “Contracts are a great untapped bastion of data.”
o   This is the crux of what so many CM vendors have been missing. Companies seeking a CM solution could do so much more than simply organize and structure their contract portfolio. Why would they settle for mere organization and efficiency when they could use CM software to gain access to the wealth of data imbedded in their contract terms in order to achieve better insight into all areas of the enterprise, from sales to HR? As we’ve written about this topic before, we won’t go in depth here, but feel free to check our previous post about how contract data adds value across the business. In short, a company’s contracts contain virtually every piece of important information about an enterprise and its clients, interactions, vendors, employees, assets, obligations, and sales; putting that information to work by analyzing this embedded data means unprecedented insight, which means more power and less risk.

Relationships: “Contracts are related to relationships.”
o   Historically, CM solutions have neglected to appreciate the legal complexity inherent in contract management. A vendor may have assumed, for example, that a contract is simply a transaction between two parties, while failing to recognize multilateral contracts, the legal distinction between parties and third parties, the concept of principal and agent, and the fact that one document can spawn multiple contracts. But just because recognizing the relational nature of contracts isn’t the norm doesn’t preclude some of the best vendors from appreciating that contracts are not static and separate from the context in which they operate.

Complexity: “Contracts are interdependent.”
o   This is part of the bigger point that contracts are messy, complex, and inter-reliant. Understanding contracts depends on understanding the way documents such as amendments, master agreements, statements of work and purchase orders interact with them. It depends on understanding renewals, assignment and novation. But most of all, it depends on recognizing that, contrary to what many people might naturally assume, contracts follow very few rules and are indeed a tool for bending and shaping rules, which means that only the best vendors are able to model them as structured data.

Revenue:
o   One thing that Tim did not mention in his post, but that we think is worth mentioning, was the failure of many CM vendors to adequately automate the creation and negotiation processes. When these are improved on sell-side contracts, the perception of CM can shift from a cost-reducer to a real revenue generator. When, for example, CM software can signal certain contracts for preapproval, salespeople are equipped to push through those urgent, hard sales without wasting time – and potentially losing an opportunity – by handing the contract over to legal to be drawn up, reviewed and/or approved. Often being the first to present a great contract means the difference between walking away empty handed and walking away with a sale.

We have always appreciated that the true value in CM was more than merely in organizing clutter and speeding up burdensome processes – the key is helping companies deal with the multilayered complexities of their entire contract portfolio and lifecycle while gaining unlimited visibility into contract data. While, as Tim mentions, much of the industry is still too narrowly focused on meeting customer demand rather than shaping demand based on innovation, it is still early days. As he points out, there is still “a massive market opportunity;” big steps are being made all the time, and we remain excited about the places we’ll go.  

October 07, 2014

Using Tech to Reduce Paper Use: Why It's Crazy Not To


Law firms use ridiculous amounts of paper. A study from a few years ago estimated that a single attorney in the U.S. will use up to 100,000 sheets per year – that’s nearly 400 pages per workday. 
And that’s crazy.

Sustained awareness campaigns over the last few decades have led to a significant shift in public attitudes towards our personal responsibility to protect the environment. We all know the environmental impacts of paper are obvious, from deforestation to pollution from paper factories. In case you need a refresher, the EPA reports paper makes up 40% of the total waste in the U.S. Even recycling can be a source of pollution due to the sludge produced during de-inking. So in this day and age, when recycling is the norm and electric cars are cool, why haven’t legal departments caught up?

It could be that lawyers love paper – it’s what they’re provided with and expected to provide; it feels familiar in their hands; it’s safe, easily read and marked up; they can take it home; they’re used to it. Courts may be similarly resistant to alternatives to single-sided, hardcopy filings and submissions. Thus, in an industry built on paper documents, run by people trained with paper documents who answer to courts expecting paper documents, reducing paper use will clearly require a change in mindset.

The sheer will to “go green” hasn’t been enough of a motivator for large numbers of firms and departments to significantly change their paper-loving ways. If "doing the right thing" isn't quite enough to instigate change, why don’t we look at it as doing the right thing by both Mother Nature and the bottom line? This shift in thinking away from paper may be facilitated by exploring the array of positives associated with “going green.” According to an article by South University, “Going green may be a popular PR move, but for many businesses, taking green initiatives to cut down on waste helps them run more smoothly, efficiently, and maybe most importantly, cost effectively.” 

Technologies that aid in going paperless result in a number of residual, direct benefits. Implementing tried and true tech initiatives such as electronic billing, e-discovery, document automation and contract management mean less money spent on paper, printing, envelopes, postage, filing and archiving. It means records can no longer be lost by fire, flood, misplacement, or coffee spillage. Centralized electronic document repositories mean more efficiency, organization and possible collaboration among attorneys, teams and offices. Locating important documents or data would entail a simple repository search rather than a desperate dig through filing cabinets. Electronic, centralized filing systems – often included in document automation and contract management software – mean no more piles of poorly organized legacy documents, research, cases, contracts, forms, memos and filings.

Less waste, less spend, less inefficiency, less carbon footprint and more desk space? Cutting down on paper is a no brainer. Beyond fulfilling law firms’ obligation to give back to the community and serve the greater good, reducing paper use is a win for the environment, hardworking lawyers and the bottom line of the firms and businesses they work for. 
It’d be crazy not to.

September 25, 2014

Why the BUILD vs. BUY Question is Much Easier to Answer Than You May Think


Not every "out-of-the-box" CLM solution is one size fits all. Choosing the right vendor means finding a solution flexible enough to handle your needs, complexity and budget. So whatever is in that box might be a little more unique than it first appears. 

You’re ready to implement a contract lifecycle management tool. Your company cannot maintain its place in the competitive market unless it adopts a comprehensive, streamlined system for managing the lifecycle of its contracts, from creation to archiving and everything in between. You need meaningful, complete insight into contract data; you need libraries of best-practice clauses to be shared among attorneys; you need to be able to create contracts with far more speed and accuracy; you need to you need to be able to store and locate your existing contracts; and, most importantly, you need it to be intuitive enough that your team will want to use it.
Now you’re seeking help. You know you need to implement a comprehensive Contract Lifecycle Management (CLM) system. But how? Do you build your own system or do you buy something from a CLM vendor?

Depending on your situation, it could be a really simple decision.

Requirements

In order to determine whether to build or buy, you’ll need to work out exactly what problems the solution will need to solve. This is no easy task, given the conflicting stakeholder expectations and internal politicking that inevitably color any enterprise-wide IT project.
You’ll need to consider the issues that are pressing right now, those that may arise down the track, as well as potential applications and necessities for other business units within your firm. Remember that specialist contract lifecycle management vendors – as well as other businesses who have turned to them – have valuable experience and expertise that will help you appreciate and evaluate the sorts of problems you may want to address and other sources of value a CLM solution may be able to leverage.

While it’s true that smart companies spend a lot of time researching solutions, the answer to the build vs. buy question should become apparent pretty early on. Here’s why:

Building

What does it mean to build your own CLM solution? It means the whole process takes place internally. Once your team works out their specific needs, the buck passes to the IT department, where the solution will be designed, constructed, serviced and maintained. It also means the instruction necessary to get – and keep – your team competent and comfortable using the tool must come from within.

Building may be the way to go if your contract management needs turn out to be truly unique and if you’re confident that your IT department is sufficiently resourced from the perspectives of budget, brainpower, capacity and vision.

Even if you think your IT guys and girls can’t be beat, you still need to be aware of the challenges of building your own document assembly system. Here are some things to keep in mind:

  • It's not just the tool that needs building. There's support, maintenance and possible enhancements down the line. As your business grows, your CLM solution will need the capacity to scale. Also don't underestimate the effort that will go into testing. 
  • On the surface, building a CLM solution may seem straightforward. As with any area of expertise, it's only when you dig deeper that you can begin to grasp the complexity that lurks in building the logic behind each distinct contract template, not to mention the various and complex ways in which their logic interacts and co-depends.
  • Building anything from scratch will mean more customization right off the bat, but it will also take longer to implement than a vendor-supplied solution.
  • While a good end user experience is essential, it’s only half the battle. Templates need to be updated and maintained. Without the right authoring tools, maintenance needs can easily turn your project into a money pit.
If your project really is a "one off "with well-known, defined requirements that are unlikely to change over time and you have a well-resourced, skilled development team, then building your CLM internally could be your answer.

Buying

What does buying a CLM solution mean? To begin, it’s more than ordering an out-of-the-box product. Many specialized CLM providers understand that no two companies are the same and will work with you to fine-tune solutions tailored to your unique needs and issues. Additionally, CLM providers may offer various levels of support, based on your requirements and budget. They are also able to foresee problems – as well as opportunities to leverage contract data – that your team may have overlooked.

Here are some considerations:

  • You’ll need to assess various CLM vendors and identify the features and functionality that best match your business problem. Take advantage of other customers having been through what you're going through. Use the vendors to help you to define your business requirements. Remember, they may be able to foresee problems (and solutions) you hadn’t even contemplated.
  • Make sure the system you choose can aptly handle the tricky parts. Things are always more complicated that they first appear. Complexity will inevitably increase as you delve deeper, and you’ll need a stable, easy way to automate it. Be wary of anyone who offers to automate your contract portfolio in five easy steps; any solution worth its salt – and your money – will take time and effort to implement successfully. 
  • Confirm that the solution you choose works and integrates with your other applications and infrastructure. Requirements change over time and growth trajectories. Systems with flexible APIs that are based on open standards enable you to future-proof your investment.

Hybrid

It’s possible that, after toiling through your pain points, the IT department’s capabilities and vendor-proposed solutions, nothing will seem quite right. For example, your own IT team may not have the wherewithal to build a solution from the ground up but no vendor you explored could handle the sensitivity of your documents or the breadth of your contract portfolio. If something like this is the case, a hybrid solution – in which your IT team works hand-in-hand designing and/or building aspects of your CLM solution – may be available. It is also important to keep in mind that many seasoned CLM vendors are willing and able to design bespoke solutions that sit on top of their pre-designed solutions to fit your needs.

That wasn’t hard, was it?

Essentially, the answer to the Build vs. Buy question is a simple one: it will almost always be Buy.  Building your own CLM tool from the ground up will be worthwhile only where you have the time, budget, brains, vision, and truly unique requirements to make the project viable. Buying from the right provider means you will have the benefit of expert insight, faster turnaround, personalized service and maintenance, bespoke features, increased ability to handle complexity and most likely better value.
So what makes a provider The One?

Ah, that’s the stuff of another post. Until then, happy contracting.

September 16, 2014

––––––––––––––––––––––– PART II ––––––––––––––––––––––– Law Can't Run on Tech Alone: How Technology Will Help – not Replace – Lawyers




In our last post we began a discussion about the relationship between legal technology and the perceived threat it poses to lawyers’ job security. We noted that claims abound warning of technological advances that will all but supplant lawyers and – gasp! – even law firms.
So what’s wrong with this notion of “robot lawyers”?

To oversimplify, the law is a human thing. Technology is a great enabler, allowing humans to focus less on the necessary cumbrous bookkeeping, administrative and practical tasks, and more on the law.
Laws regulate people (and, lest we forget, the corporate ‘person’), and are written, interpreted and enforced by people. No matter how regimented and rote, the law and its application contain degrees of reason – human reason – that algorithm cannot account for. These limitations become even more pronounced as complexity increases. And whenever reason comes into play, technology can only support – but not supplant – flesh and bone legal professionals. The real question, then, is what aspects of the law depend on human reason? Turns out, almost all.

Let’s set aside the obviously humanity-centric areas such as Constitutional and Family Law, and go straight to the heart of the beast: contract law. Technology can – and does – play an increasingly important role in contract law by enabling streamlined contract creation, tidier negotiation, intricate contract data-based reporting, and overall visibility into the lifecycle of a contract. But, in contract law as elsewhere, technology is only as useful as its use by lawyers is consistent and deliberate. Plus – and this goes without saying – it takes skilled people to create the rules, logic, and enter the data that make the software run and keep it running. 

A glimpse at four aspects of contract law should clear up any doubt as to the human nature of contract law:


Creation:

A contract’s viability depends on whether there was a “meeting of the minds” – shared intention – at creation. No shared intention, no contract. Computers cannot intend anything, and the human brain is so complex that building a computer-generated brain is highly unlikely. Technology that, for example, allows lawyers to search for best practice clauses or draft contracts using intelligent templates certainly speeds up creation where documents are inherently predictable. But creation itself depends a priori on the parties being people intending to make a deal. It depends more on the relationships in play than the signatures on the page.

Negotiation:

Computers also cannot negotiate. While they can streamline collaboration, communication and record keeping involved in the back-and-forth, negotiations involve judgments based on experience, analysis, knowledge, power dynamics, impressions and assumptions, all of which are based to varying degrees on the parties and their circumstances. The ultimate success of difficult negotiations is predicated on the parties’ trust in each other and their respective stakes – financial, emotional, or otherwise – in the outcome.

Interpretation:

When something goes wrong in contract law, arbiters look to myriad objective and subjective factors to determine the enforceability of contract terms, the intent of the parties, and degrees of liability in case of breach. In the United Kingdom, legislation requires contracts terms meet a standard of reasonableness, which, though defined by an objective test (outlined in the Unfair Contract Terms Act 1977 section 11), depends on the subjective circumstances of the parties. International law similarly seeks to define terms in sale of goods contracts by looking at both the objective and subjective intent of the parties (see the United Nations Convention on Contracts for the International Sale of Goods (1980)). Contracts are reflections of human relationships, desires, beliefs and circumstances. Courts take these human elements into account when reaching decisions as to their viability and the liabilities they impose.

Litigation:

While legal technology has proved a boon to litigation – especially in reducing the burden of discovery and review – software cannot make determinations as to a course of legal action. When harm results from an accident, a deal gone bad, or a soured relationship, attorneys use – once again! – judgment, reason and experience to weigh the options available to their clients, and they use – can you guess? – reason, experience and intellect to determine which legal arguments best serve their clients’ interests. Factors may include intangibles such as the reputation of a judge or opposing counsel, degrees of sympathy or credibility. Technology may help consolidate, organize and locate information – it may even be able to offer suggestions based on past outcomes – but it does not replace the fundamentally human element in legal decision making.

And finally, just to drive home the point, a comment about trust. While we could go on about this all day, suffice it to say that the legal profession is built on trust. Dressed up as diligence, candor, truthfulness and integrity, it is the golden thread running through the rules of professional conduct, the backbone of the profession. Lawyers maintain a duty of care to potential, current and future clients, and assume responsibility for the advice they give and actions they take. How would a program be held to account? If, as has been claimed, the advice of an attorney could be replaced by algorithm, who would be responsible? If we were to rely on technology, where would the line between being inculpated in or excused of negligence or a conflict of interest?

Technology is, in essence, an enabler and an amplifier. It allows people to create contracts or search documents at lightning speeds, and have visibility into the terms and conditions embedded in their contracts with startling accuracy. But its effectiveness and trustworthiness depend on how humans build it and put it to use. Technology is not a threat, it’s a catalyst for lawyers to return to their roots. In short, legal technology can free up lawyers’ time, minimize human error, and reduce the cost of legal work. When used well, technology means more humanity in law and more and better access to justice, not more pink slips.

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