How can GCs convince management that modernisation of their systems is necessary? “There doesn’t have to be a big bang” was just one of the insights put forward at a recent roundtable, hosted by The Lawyer and Conga’s director of sales engineering Howard Wassall on introducing contract lifecycle management (CLM) into a business.
The session, held as part of The Lawyer’s In House Counsel as Business Partner Conference, brought together a number of in-house legal counsel, many of whom said they are yet to find the perfect solution to requesting, negotiating, creating and signing contracts. Reasons cited for this included the size of their existing team and business, meaning that resources were not available to search for new providers.
“There are so many legal tech companies out there, but everyone’s got a different budget and you have to plough through all of them to work out what they can do,” said one participant. “We need a Compare the Market-style guide. That would be an amazing service for in-housers.”
With most legal counsel still swapping between various products, such as Sharepoint, AdobeSign and SalesForce, the fundamental question of “where do I start?” was asked. Some in-housers, who had already been through the process, said that networking and chats with colleagues could help pinpoint which provider is right for you.
“Don’t be afraid to post on LinkedIn and ask peers what providers they have used for certain features,” said one. Law firms too can offer a service, though the in-housers agreed that could often be used as a ploy to shift towards their systems. Conga’s Wassall further noted that a number of consultancies specialise in CLM to help clients make informed choices.
Underlying the interest in overhauling their CLM systems was a desire from participants to make workflows more efficient. The challenge with using a number of products for a variety of tasks means that they don’t necessarily “speak to each other”. Another in-house lawyer described their system as “cobbled together”, while there were further demands for a “one-stop shop” for handling contracts.
“Making systems talk to each other is very challenging,” said one. “As soon as you change one system, you have to change the other. The problem you have before working out what you need is first understanding the problems you’ve got. But if you’re not in legal operations, then properly assessing the workflow is very tricky.”
Of course, different providers offer different functions, hence a need for a Which-style guide or comparison tool. While some in-housers said they would need just core functions, others reminded the group that extras might be needed, which can bump up the cost. These include signature and approval functions, alongside the usual contract repository reporting and privacy settings. “When you’re budgeting you have to be aware of the base cost and what you can justify as extra modules,” advised one of the participants.
However, herein lies the biggest challenge of them all: convincing the c-suite that they should pay for your new CLM. Participants said a core part of their proposal would be showing how much value they could bring to the organisation. This particularly applied to in-housers who had been doing the same things for years, meaning it might be trickier to convince decision-makers that a switch away from manual is really needed.
On getting buy-in, one legal counsel said: “Work out what’s important, what your budget is and talk to two of the top three products you come across. Providers can help with a return on investment strategy to present to the board and get the go-ahead.”
However, another claimed it can sometimes to be challenging to get funding in such a cost-conscious environment, with priority instead given to teams who generate ROI.
This can sometimes work in the favour of private equity-backed businesses, said one legal counsel. “You’re potentially gearing up for an exit in the next six years. If the owners decide all of a sudden that the business is up for sale, you will at least have a ready-to-go data room if you’ve got the right CLM system in place.”
Finally, using data to helpfully display trends can also be seen as a persuasive tactic in the boardroom. While this can take time, it is often important to justify why extra spend is needed to improve the efficiency the business. This ultimately is what cuts costs in the long run.
Conga comment: How legal departments should decide on a CLM provider
Conga recently attended a roundtable hosted by The Lawyer, where experts discussed the future of contract lifecycle management (CLM), including how legal departments can overcome the challenges associated with contract management, and decide on the best CLM solution and provider.
Legal and compliance teams often get buried in paperwork. In fact, the average company handles around 20,000 to 40,000 contracts on any given day. Manual processes and poor communication between teams can result in bottlenecks, drastically affecting the sales cycle and can potentially lead to further costs later down the line. Harvard Business Review cites that inefficient contract management is causing organisations to lose up to 40 percent of the value of a given deal owing to the challenges encountered.
Throughout this roundtable, leaders recognised the need for change and acknowledged that CLM solutions can alleviate the pressures felt by legal and sales teams. However, many companies are tied to strict budget constraints and choosing a provider and a solution that adheres to their specific business needs can be incredibly challenging.
Looking ahead, businesses will need to continue to apply what they have learned from pandemic-driven digital transformations and see how else they can streamline vital processes. Analysing the entire revenue operations process is crucial in this decision making.
When considering how cost-effective a solution may be, it is important that businesses also evaluate how well a CLM solution integrates all pre-existing systems and software. Leaders need to choose a solution that compliments the workflows of all the teams involved across the entire revenue operations cycle – from sales, to finance and legal departments. In short, a solution that addresses their business needs more holistically; better connecting people, processes and data, effectively streamlining the entire revenue process from end to end.
