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The Modern GC: Updating the Contract Lifecycle Management (CLM)

This is the first part of a two-part series that discusses risk management in the supply chain.

The demands on today’s general counsel are vast, complex, and unfortunately often in conflict with the wider business. Corporate counsel are their company’s traditional guardians, expected to protect the business against unnecessary risk from poorly thought out plans, regulators, unscrupulous partners, class-action lawyers, bad business processes, and more. But with this traditional approach, business silos are as prevalent today as they were 20 years ago. As CEOs and business directors look to destroy them, general counsel become the fall person, often getting the bad rap for inhibiting progress in areas of business development — an area criticized for not being taught in law schools today.

But in the modern age, general counsel and their legal departments are increasingly expected to be business partners, collaborating with executives and functional experts in finance, HR, and marketing to drive bottom-line results. Legal is being elevated into the C-suite alongside other functional leaders like the chief financial officer, chief human resource officer, chief strategy officers, and others to help CEOs break apart silos that prevent rapid-business decisions. In this regard, general counsel are also expected to become innovators — or at a minimum not preventing innovation— by helping their colleagues and IT test new ideas and technology at a rapid pace.

The truth is, the corporate legal world has been much slower to embrace technology to help solve business problems and break down silos. Take the bread-and-butter tool for general counsel and front-line legal team: the business contract. Even at some of the most sophisticated organizations, contracts are still created in Microsoft Word and set in stone through PDF documents. Email is the primary means of conveyance and inboxes function as contract storage system. In the case of PDFs, templates are still fixed and any change requires intervention by a lawyer, who must edit the source word-processing document before handing it back to the business user waiting for it. This lawyer, by the way, is usually juggling a wide range of other demands, from regulatory meetings to HR issues, and the last thing they have time for is deleting a sentence from the document.

In fact, a few weeks back I was talking to a sales executive of a leading B2B services provider, and he was lamenting at his contracting process. Not only did he have too many contracts for a similar solution, but these contracts were too long and complex. Many were only available to his sales force in, of course, PDF format. This is a company with 25,000 customers, both large and small businesses, and the sales force needs a more flexible contract than a PDF. Even small changes to the pre-approved contract require getting the attention of the shared-service legal team — something that can add days to the sales process.

These and thousands of other examples out there represent an opportunity facing legal leaders to shift toward a business-driven mindset and embrace technology where they can exert the most influence. In this area, they can follow the lead of their functional-area colleagues, such as human resources departments, in deploying HR systems, or sales teams in deploying CRM. Organizations are increasingly adopting Software-as-a-Service (SaaS) solutions in the cloud to rapidly adopt and create change in their organizations.

For legal, the opportunity is ripe for making an impact on contract management by becoming the leaders of the digital transformation of contracts. This revolution is not just the effort of making contracts digital in a searchable repository, but in the revolution of enabling self-service workflows with legal counterparts for transforming business processes in the use of contract management lifecycle (CLM) solutions.

How corporate legal departments can adopt this innovation into their organizations can be exemplified in the transformation of the everyday consumer technology that we often take for granted today.

For example, the airline industry issues tens of thousands of contracts to consumers every day in the form of airline tickets. There used to be a time, not that long ago, when every purchase had to assisted by an airline employee, and then validated in person by another airport-based employee. All tickets (aka contracts) were paper based and had to be received or validated by gate agents (think of them as front-line corporate attorneys). American Airlines rolled out its first self-service kiosk at airports about 15 years ago to speed up the pace of business for their consumers.

Today, most passengers manage their own ticketing without having to see a gate agent at all. To initiate a ticket, consumers open their smartphone and search for flights on their airline’s app. After selecting the flights, they can purchase a ticket with a few clicks from anywhere in the world with cell service or WiFi. Most consumers opt for digital tickets, show it to security, and proceed to their gate.

For consumers who need assistance, they can interact directly with employees. It’s not just airlines that have moved toward digitally enabled self-service business models.

What’s more, just about everybody pays at the pump, and fills their car with gas. Zipcar, car2go, and Maven have transformed the rental car business into a do-it-yourself experience. An article last year in the Harvard Business Review entitled “How Self-Service Kiosks Are Changing Customer Behavior” highlighted scores of other businesses that are embracing the self-service model — from McDonalds to your neighborhood bank. The goal is to remove what the author called the “social friction” that happens when people get involved in a transaction.

But what happens as the corporate world learns to embrace the idea of self-service in CLM? Stay tuned for the second part of this series. 

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.

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