It seems to us that although the dizzying number of technology solutions entering the market daily (not to mention the avalanche of new AI possibilities that accompany them) are intended to make everyone’s life simpler, it’s more challenging than ever to cut through the noise and figure out how or where to start your journey to simplifying contracting for you and your organization.
If it’s any comfort, you’re in good company: The vast majority of lawyers and Legal teams are still desperately seeking ways to solve the challenge of increasing contracting volumes and limited capacity to scale. Everyone aboard this boat eagerly seeks a life buoy of effective tactics that can help reduce the legal workload while also enhancing business satisfaction. Simplifying the processes that comprise Contract Lifecycle Management (CLM) is at the core of any effort to improve contracting. Although the term CLM has become common parlance in the Legal Tech world to refer to the technology that automates some or all aspects of the contract lifecycle, we always start by reminding our customers that CLM is a function and is not, in fact, a system.
Why does the correct context and terminology matter? Well, if your company does not have all aspects of its CLM functions and processes in good shape, you’re likely to have limited success when introducing any automation into the mix.
Legal teams must first understand, improve, and ultimately simplify their CLM functions and processes before jumping to the technology, which requires careful selection, nuanced implementation, and ongoing adoption of a CLM System. Ensuring a solid foundation before automation is the only path to success.
Is building foundations exciting and sexy? Not really. Can Chat GPT do the homework for you? Regrettably, not yet (although it can probably compose a decent poem about it). Will getting the foundations right set you up for practical, scalable, effective long-term success? Absolutely.
The CLM Simplified Contracting Framework
No matter how tight budgets may be right now and whether CLM technology is even on your roadmap, the good news is that the first step towards CLM efficiency is always ensuring that your contracting foundations are solid and this can be tackled in practical scalable stages which enable ongoing progress under any circumstances. Baby steps are great!
You’ll observe the foundational aspects of contracting and good legal operations housekeeping in this contracting framework graphic. You need to grasp who is doing what: Are the right skillsets being applied to contracting, or are there other professionals that can play a bigger role, perhaps outside the legal team?
Asking “why” specific contracts come to the legal department for review is a great way to start inspiring change. A detailed review into “how” contracts flow across the company and quickly identifying whether there is room for improvement and optimization often leads to quick wins toward efficiency. Hint: The question of “How?” will often shed light on automation opportunities. Consider the signature process alone! It is the combination of asking “why” and “how” that brings immediate impact. Once minor tweaks are made to processes, more significant leaps toward technologies can be taken, knowing that the critical pre-work has been done. After processes are improved, adding technology becomes almost like an engine booster to a well-built rocket.
In short, it is critical to streamline complex commercial contracting processes before seeking CLM technology. There are many small ways to make significant improvements that can be done in a low-tech way so lawyers live in a world with smoother legal review of contracts based on efficient processes, optimal templates, simplified playbooks, and continuous data-driven improvements.