CCBJ: Tim, can you tell me a little about Contract Logix and what you do?
Tim Donaghy: Yes, absolutely. Contract Logix is a leading provider of contract management software. We were founded in 2006 and our goal since the beginning has been to help our customers uncover and mitigate hidden risk in their contracts. We work very closely with corporate legal and legal operations teams across several different industries, especially highly regulated ones, like healthcare, energy, and pharmaceutical. They use our platform to simplify, automate, and digitize the way they manage all phases of the buy-side and sell-side contracting process. This includes everything from a contract request, the creation, negotiation, and electronic signature of an agreement, as well as the ongoing post-award management including things like obligation tracking, amendments, you name it. We are a full contract lifecycle management solution, and we pride ourselves on being a very data-driven, customer-centric, and security-first company.
You talked about helping organizations uncover hidden risk in their contracts. Can you elaborate on how you are helping legal teams do that?
Uncovering contractual risk is part of our DNA at Contract Logix and there are many ways our software helps make that possible. Our belief is that risk is inherent in every legal agreement and to effectively manage risk, you must identify and assess it before you can mitigate it. We also believe that data is key to effective risk management. Unfortunately, many organizations don’t have the ability to leverage their contract data because it’s stuck in shared drives, spreadsheets, and other obsolete or document-centric contract management tools. That’s where we can help. You need a data-driven approach to contract management and we’ve built our platform from the ground up to be data-centric.
Our software gives our customers the ability to harness the wealth of data in their contracts like names, dates, terms, values, even legal language. Our platform then takes that data and transforms it into actionable business insights using capabilities like real-time reports, dashboards, automated alerts, and more that can be used to uncover and minimize legal, financial and security risks like missed obligations, unfavorable terms, slow approvals that might cause a deal to be lost, or unauthorized access to sensitive information. We provide a modern, accurate, and automated way to identify, assess, and mitigate contract risk.
Are there any other examples of how technology like yours can help Legal and Legal Ops do their jobs better when it comes compliance, speed, strategy, or other areas of their business?
That’s a great question. Research and our own experience have shown that many corporate legal departments and contracting teams spend way too much of their time on routine, manual, and mundane contract management tasks because they aren’t using the right digital CLM tools. Those activities take them away from spending time on more strategic initiatives that can really help the business such as ensuring compliance with internal policies and external regulations, implementing better risk management processes and checkpoints, and even facilitating more effective collaboration and negotiation to finalize business faster. With our software, they can simplify and automate their entire contract lifecycle management process. This frees up an enormous amount of time so they can focus on the highest value and highest impact things for the business.
For example, many organizations request contracts via email. That’s an inefficient and often inaccurate model that usually results in unnecessary back and forth communications before a request is even approved and the contract is created. Using contract management software like Contract Logix’s, they can centralize their contract request process using standardized web forms where all required information is captured up front. Then, they can automatically route those requests to the appropriate approver and the contract can be automatically generated using clause and template libraries and merge fields with the required information.
Another common, yet powerful, example involves the use of automated workflows. Many legal teams get unfairly blamed for being bottlenecks in the sales or purchasing process. Automating the flow of a contract throughout the creation, review, approval, and negotiation phases using workflows has a lot of benefits. It reduces a great deal of friction at each stage, ensures the organization’s business rules are followed which plays an important role in compliance, and eliminates the need for human intervention and manual errors from occurring. And those are just two examples of how this technology can help legal and contracting teams be more agile. We’ve had some customers tell us they were able to reduce the amount of time it takes to execute a contract by 90%! Imagine what you could do with all those extra days and hours.
And what about digital transformation? We see that as an increasingly important priority for General Counsels. Are you hearing that from your customers as well?
Yes, absolutely. It’s interesting because digital transformation (DX) has been a buzzword for so many years, but the pandemic really accelerated and shined a spotlight on the need for it to become a reality. The need for Legal to digitally transform and support their organization’s broader digital transformation strategy is no exception. In fact, a recent study by KPMG found that 76% of organizations say that the digitization of their contracting process is now a priority. That’s a big percentage and shift in priority considering just a few years ago research from Gartner showed that 81% of Legal teams were unprepared for digital transformation.
That trend is something we call digital contract transformation or DCX and we are witnessing the acceleration of it firsthand within our own customer base. Last year alone we experienced triple-digit percentage growth in customer usage of our software, with some of the highest growth in key areas of digitization like workflows, electronic signatures, and the volume of digital contracts and documents being managed. As the world pivoted to a remote workforce, Legal teams quickly realized that their old manual and analog processes for managing contracts would not be feasible. By digitizing their contracts and contracting processes, corporate legal teams can be leaders, not laggards, in digital transformation. They can manage contracts from anywhere and on any device. They can optimize vendor management, help shorten time to revenue, and drive many other operational efficiencies.
The other important thing to point out is that digital transformation is all about data and using that data to deliver insights to optimize the business and your business model. A great example of that involves contract management KPIs. Once you have access to all your contract data, you can leverage it to benchmark and track KPIs to improve the performance of your contracts and your processes. That’s a great way for Legal to provide strategic insights and value to the business.
Can you talk more about the role of data when it comes to contract lifecycle management? How else can in-house legal benefit from being data-driven?
Data is one of those topics that can overwhelm people, especially when they don’t think they have any data to leverage. The reality, however, is that for Legal teams, data is their best friend and it’s quite simple to begin leveraging provided you can access it. Another advantage for Legal is that contracts and contracting processes contain and create an amazing amout of very valuable data that can be analyzed to answer a broad spectrum of questions about the health of the business. It can also be used make everyone’s life easier by improving processes.
The key, again, is that you need to be able to capture the necessary data and then put it in a format that’s useable, actionable, and insightful. Given our data-driven approach to contract management, we not only make that possible, but we also make it simple and easy for Legal teams to do. For example, in our software all the information in your contracts is indexed and searchable, just like you’d ask Google a question. It’s also available in real-time reports and dashboards that can be shared across the organization. Perhaps you want to know the value of all contracts renewing in the next 90 days? Or, how many days does it take to negotiate or collaborate on a contract? How about which contracts contain an indemnification clause? Tracking down this information using a data-driven approach literally takes seconds. So, to sum it up, Legal can benefit from being data-driven by mitigating risk, increasing compliance, saving time, reducing friction, and improving collaboration.
You mentioned collaboration. How are organizations changing the way they collaboration on and negotiate contracts?
Collaboration and negotiation are an area that can make or break a deal. In fact, your customers, partners, and vendors have come to expect a modern and digital experience when negotiating contracts. It’s an area that can be a competitive advantage or threat for the organization depending on how much friction there is in the process. The days of emailing back and forth contracts with edits and printing agreements to sign, then scan, and email again are over.
We’ve been very focused on how we can not just improve, but transform, the way people collaborate and negotiate contracts into a fast, simple, and frictionless experience. As part of that, we introduced some groundbreaking new technology recently called our Collaboration Room where Contract Logix users and third parties can share, review, comment, approve, and sign an agreement in real-time without ever leaving the platform. That helps everyone get the deal done faster and it also provides visibility into who’s involved in the process, have they looked at the agreement, you get a full history of all edits, and can quickly compare versions.
As organizations adopt software like yours, I’m sure there is a lot of change management they need to deal with. What are some of the pitfalls our readers should know about?
Change management can absolutely be a concern and problem for some organizations, especially when it comes to adopting new technology like contract management software. We’ve learned this over the last fifteen years of working with customers. One of the keys to successful change management is how well you onboard and implement the software. You can’t crawl, but you can’t run either, and there are four core components that every organization and vendor need to define from the beginning very clearly.
First, be specific about the business problem or problems you are trying to solve. What are the priorities and which ones will you tackle first, second, third, and so forth? Not documenting that is a common pitfall we see. Then, what does the ownership of the software implementation and user adoption look like? Here, we recommend building a RACI model so everyone knows their roles and responsibilities. Third, you want to work with your contract management software provider to scope the data and architecture of your software configuration. What contracts and data will be migrated, what does your current contracting process look like, what contract types do you have, etc. If you try to map all of that out mid-project, you will waste a lot of time and energy by having to redo things. Finally, how will you measure and determine business value? Set some goals for your first 30, 60, and 90 days around improvements to your CLM security, automation, user adoption, and reporting and analytics. This will give you the insights necessary to know if you’re on track or not.
If you do these four things then you’ll be successful in your change management, you’ll avoid the common pitfalls associated with it, and you’ll realize a fast time to value in your contract management software adoption. That will help you get to a reasonable ROI which management will appreciate and applaud.