On this installment of Contract Heroes, we had the chance to sit down with former managing director of Elevate, Jason Smith.
Though he is now considered by some to be one of the “Godfathers of legal technology,” Jason got his start in legal technology in the mid to late 1990s and practically by accident.
While practicing bankruptcy law, he became aware of the potential for automation buried within many rule-driven legal processes. After joining a startup company, he involved himself more and more with the automation of legal processes, specifically contract management.
With years of history working on all the different sides of contracts, Jason had tons of valuable advice to share throughout our chat. The main topic of discussion centered around what Jason sees as the underlying problem for many companies who are in the process of starting to automate their processes: distance between departments.
Keep reading to find out the solutions that Jason has found to be the most effective throughout his long history working with contract lifecycle management (CLM).
Tech Isn’t a Magical Fix
According to Jason, the biggest underlying problem that most companies who are new to CLM software and process automation face is a failure to view their entire process in a broad scope.
Many companies who are currently still doing things on paper see technology and automation as a magic pill that will speed up their output when applied directly to their current processes.
However, this is not the case, as often companies in this situation will simply end up automating an overly-complicated, convoluted process that needs to be simplified first.
The way to go about simplifying the contract management process is
to take a step back and view the process from a broader perspective while keeping its component parts in mind.
There are several different departments involved in the CLM process, but the main two are the commercial department and the legal department
In Jason’s experience, the most common mistake that companies make is failing to involve the legal department at the right time, which is much earlier in the process than you may think.
Instead of alienating legal and sales from each other, the solution to create the best automated contract process is to treat legal ops more like a regular business unit and allow the legal team to have influence over the drafting of contracts as well as the review of them.
Of course, the legal team does not have the time to sit in on everything the sales team does, so that’s where companies can start to find the real value of using a CLM software.
Because legal ops is so rule-driven, it’s easy to code around those rules and use them to automate repetitive processes.
With these processes in place, the sales team can trigger certain rules while writing the contracts, thus involving the legal team in the early drafts of the contract without having to consult them firsthand. This can save a huge amount of time and resources for both departments.
Jason has found that some companies tend to self-diagnose their problems as well, leading them to mistakenly create overly-complicated solutions to these problems. He compared it to looking on WebMD for a solution when you’re not feeling well.
Self-diagnosing from WebMD’s list of possibilities will lead you to take more drastic measures than is likely necessary for you.
Consulting a doctor, who has no bias, plenty of knowledge on the topic, and prior experience with other patients, will allow you to obtain a proper diagnosis and figure out a better solution.
The same goes for fixing your CLM processes. Bring in a third party who can cross-compare between departments to locate the solution while explaining the opposing sides’ perspectives to each other.
According to Jason, you need to keep these types of broad perspectives in mind when viewing your metrics as well. Without perspective, you see only the subsets of the metrics. A good example to look at is the speed of contract processing.
Faster contract processing can be either good or bad depending on the value and effectiveness of the contract
Obviously, processing an ineffective contract faster does not do much good for the relationship between the company and the customer. Looking at another metric may be the key to discovering problems within the one you are currently assessing.
When seeking out solutions via CLM software and automation, you need to remember the larger picture and try to figure out how all your metrics fit together to shape your unique contract process.
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, Jason Smith, his email is firstname.lastname@example.org, and he can also be found on both Twitter (@tjsmithesquire) and LinkedIn.