Craig is currently a partner at Deloitte Legal based in the UK and has done work all around the globe, helping companies find the best ways to improve their contract processes. He is a lawyer by training and practiced law in New York City for ten years before becoming the head lawyer for Capgemini, where he really started to make his mark in the CLM space by assisting with the creation of legal and commercial shared services.
Improving Your Contract Management Processes
Before we can truly begin to improve our contract management processes, we first need to understand the importance of contracts themselves. Every organization’s contracting process can use some attention and, according to Craig, that’s because the assets for most companies essentially lie in their contracts. Contracts are the lifeblood of the company. Though no particular department wholly owns them, they are touched by practically everyone, meaning that most people within the organization need to have a good understanding of the contracts, their processes, and each other’s perspectives throughout the process.
Craig gave us a great overview of some important first steps that every organization should pay attention to at the beginning of their CLM technology journey. First, you should always keep in mind that the technology by itself can’t solve your contract’s problems. “What good is a pen without the hand using it,” he pointed out. Contracts that are created with bad content simply clog up an A.I. system, while overly-intricate contract processes slow down turnovers. No amount of legal-tech can fix these issues on its own. Rather, technology should be used as a tool to assist your processes once you’ve managed to start simplifying them.
As you begin to look for ways to implement CLM tools, you should also focus on the goals of your company. After all, every company is unique and will have its own motivations based on clients, industry, products, and many more factors. Try to figure out why contracts are important to your company in particular. Organizations that need to be extremely thorough and risk-free need more transparency and control with their contracts, while those with speed as their goal may instead require a tool that can energize their staff and provide ways to expedite the process by reducing the amount of hands-on contact needed. Craig pointed out that there are at least 200 CLM tools on the market at the moment with each one focusing on different aspects of the contract process. Select the technology that is designed with your particular goal in mind.
Since Craig has tons of experience helping companies improve their contract management processes, we also asked him for a quick walkthrough of the main points he emphasizes when assisting different organizations. As he explained, understanding perspectives is key. He will usually begin by asking the team to walk him through a typical contract and listen to the perspectives of both the legal branch and the sales branch. The legal branch may have an issue with the amount of work they have to do or the requirements set by sales while the commercial branch could have issues with the overall length of the process. If you take a step back and really assess your process with these differing perspectives in mind, you can simplify the process and delegate jobs in a way that evenly spaces out the workload and bolsters efficiency. The solution in this case could be to shift some of the workload off the lawyers while simultaneously empowering the sales team with new responsibilities, thus building trust between the two teams.
Craig also advises companies to be open to change and flexible with their standards. Just because something has been done one way for a long time, that doesn’t necessarily mean it can’t be improved. In fact, there are normally some unnecessary pieces buried within the contract process that can be eliminated. An A.I. is a handy way to assess your current standards because it provides the real facts about how your contracts are working. You may find that 85% of the time, you’re not adhering to one of the standards laid out in your rules. In that case, it’s probably time to alter that standard so that it fits into your process rather than hindering it. Look at what you’re doing and really question it so you can find the places that need improvement.
Which CLM Tools are Right for You
Drawing from Craig’s experiences even more, we wanted to know if he has noticed a trend in the way organizations are adapting their technology. In terms of the incorporation of collaborative programs like G Suite overtop of older tools like Microsoft Word, Craig explained that it’s mostly a generational phenomenon. Programs like Microsoft Word get the job done, and people are used to using them. However, collaborative software opens up a larger world of flexibility and efficiency. Some members of the team can be locked in negotiations about the contract while other teammates are cleaning up the references within the contract. Multitasking like this and the ability to work from anywhere speeds up the contracting process.
Craig also pointed out that it’s important to understand both the abilities and the limitations of a tool before buying or replacing it. Some organizations fixate on replacing their current tool with another one because they feel the current tool isn’t working for them. That may be the case when the company has grown or needs to become more digital. However, there are instances where people were not properly trained with the tool when it was implemented and resorted to working around it rather than utilizing it. Before you replace the tool you have, you should take the time to see if it can work for you when it is used correctly. Essentially, you want to find a tool that makes sense for your company now and that has the potential to grow along with you as you transform and expand in the coming years.
Calculating Your CLM Tool’s ROI
Before we wrapped up the show, Craig gave us some great ways to nail down the ROI of your CLM tool, a concept that’s not always easy to see because not all of the returns are tangible. Increased efficiency is key for growing the company’s output. You may figure out ways to handle more contracts faster while maintaining the same amount of staff, thus saving by not needing to hire more people to fill in gaps. You can also assess how quickly you’re closing deals and try to speed it up even more. Going from taking six months to close a deal to just one month means more deals per year which increased revenue. CLM tools even allow you to eliminate small mistakes in contract processes by terminating contracts on time and making sure the right prices and discounts are in place. These figures add up to save 1-2% on wasted annual contract value.
For more exclusive chats with expert guests and valuable legal-tech advice, check out past installments of Contract Heroes and be sure to subscribe so you don’t miss an episode! If you have any questions for our guest, Craig Conte, you can find him on both LinkedIn and Twitter (@craigjconte).
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