Follow ACC Docket Online:  

The Modern GC: Embracing Self-service Contracts

This is the second part in a two-part series on risk management in the supply change. Read the first part here.

T he idea of self-service in contract lifecycle management (CLM) is still fairly new in the corporate world, but it’s rapidly starting to take hold. Thankfully, the process is easy for lawyers to embrace while preventing unnecessary bottlenecks for dozens or hundreds of business users who need contracts to be executed.

Self-service contracting means giving employees the tools to initiate contracts (e.g., laptops, desktops, or mobile devices) with pre-approved language and the ability to make slight modifications to contracts or provide input on necessary areas, while still giving senior executives and legal teams the control they need. Business teams can do their jobs, while lawyers can efficiently review and validate contracts. Just as important, self-service contracting frees up corporate attorneys to do the more sophisticated and strategic assignments that drive business goals and break down business silos.

The ability to enable the automation is based on technology in CLM that incorporates pre-configured contract templates into the system that allow specified users to add or remove specific clauses based on their functional role in the organization. The logic in the system also is able to monitor the number of changes being made — where similar to the self-service kiosk of the airline ticket example — legal and other business executives can be notified and actively involved in the contract authoring or editing process of a specific business when too many changes are being made.

The benefits to the enabling self-service create a new empowerment for general counsel, providing them an outlet to be more involved with the ability to transform the contract management process within their organization. As the overseer of contracts, general counsel and their teams can be active participants in the deployment of CLM technology and begin playing the business partner role that’s so crucial in the modern age.

Moreover, through the active deployment of technology, the organization also can realize new efficiencies and controls in the process of initiating contract requests and approvals. Through the digitization of the contracts, organizations have a newfound level of insight and control that empowers users, but still providing legal the ability to protect the business against unnecessary risk through innovation.

But transitioning to self-service contracting is not something that can be done with the flip of a switch. While the investment in time pays dividends in the future, there are key elements that need to be in place for self-service contracting to work. These include:

Contract templates. For a purchasing department, for example, this could mean creating templates for purchase contracts, statements of work, change orders, leasing agreements, and technology purchase agreements. For sales, this could mean creating bills of sale or SLAs. Other common agreements that are easy to template include mutual non-disclosure agreements.

Editable language. A key to giving business leaders the ability to conduct business rapidly through contracts is identifying which clauses are sacrosanct and unchangeable, and which ones can be altered.

Digital contract repository. One challenge with contracts is that they exist in many areas in a company including laptops, file cabinets, and email inboxes. Lawyers and executives need a central repository where contracts and templates can be stored, secured, and accessed.

Mobile functionality. Business is done on the fly today — at all hours and locations — and business executives and lawyers both need to be able to access documents from their mobile phones and tablets.

Workflow triggers. Self-service doesn’t mean going it alone. When it comes to infrequent contracting users, legal teams need to be available to provide assistance. Successful legal departments create automatic triggers — based on user edits — that require their review before final approval.

Electronic signatures. There are multiple solutions on the market today that track the execution of contracts, enabling these documents to travel across companies and departments at digital speed.
For those of you who remember the first airline self-service, you’ll remember that it took time for users to embrace new technology. At first, even frequent fliers opted to see a gate agent to check-in and print a boarding pass. Today, frequent fliers pride themselves on their ability to zip through airports faster than anyone else. The challenge for today’s legal departments is to help their organizations implement and deploy the right digital contracting tools so that a business’s early adopters can move quickly — and the rest of the company will follow.

About the Author

Constantine LimberakisConstantine Limberakis is the vice president of product marketing at Determine. There, Limberakis is focused on strategic efforts for creating brand awareness and promoting new ideas around the evolution of contract management and supplier management.

The information in any resource collected in this virtual library should not be construed as legal advice or legal opinion on specific facts and should not be considered representative of the views of its authors, its sponsors, and/or ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.