Practical, Tangible Strategies for Legal Contract Management
Please describe the company’s history. What does Contract Logix do and who are your main customers?
Contract Logix was founded in 2006 and is one of the longest-tenured contract management software companies in our space. A lot of the original contract lifecycle management (CLM) innovators have worked, and still work, for our company. We work with legal, procurement, finance and sales teams in highly-regulated industries like pharma, healthcare and energy, all with complex compliance requirements and agreements, to help them implement an actual contract management process. They use our software to manage the entire lifecycle of their contracts from the moment an agreement is requested all the way through the termination, renewal or amendment of it.
All businesses have hidden risks in contracts, and the risks due to ineffective contract lifecycle management can be small, or they can be massive. Those risks include everything from overlooked penalties to missed delivery obligations, to lost revenue, to unexpected renewals. Our specialty is helping organizations illuminate and articulate, a lot of times for the first time, what their current processes for managing contracts and vendors are and making measurable and meaningful improvements. For companies that already have an understanding of CLM, we usually find that there’s either not a distinctive process in place or there’s a lot of waste and inefficiency in the system. When we begin working with a customer, we partner with them for the long haul, helping every step of the way through onboarding, the design of better business processes, user adoption and ongoing support.
What about your personal background? What experience do you have working with legal teams? Do you feel your earlier experiences translate to your current role at Contract Logix?
My background is in SaaS helping organizations scale for growth. I joined Contract Logix in February 2022 and have been with the company for a year. My role is to drive change, drive innovation, and help customers be productive and grow in their own right. In my prior role, I led commercial and customer engagement teams for more than a dozen products, so I know first-hand what it’s like to be responsible for driving renewals, getting new contracts into place and working with Corporate Counsel to make sure that we’re fully compliant and protecting all of our customer data. We did that without a CLM system and it was very painful and time consuming. Part of my motivation in my current role is understanding that this (CLM) is really a solution that every organization with contracts (i.e. all of them) needs.
You mentioned that you work with many General Counsel and corporate legal teams. What are they telling you is the biggest challenge they face? Any common themes or insights you can share?
The feedback that we get is pretty consistent. Legal teams KNOW that contracts are the backbone to their organization, but across the board, visibility into what’s out there remains the biggest challenge. They want and need help consolidating and organizing chaos, and we give them tangible advice by sitting down and asking, “Okay, which problem do you want to solve first?”
For example, speaking with senior counsel at some large companies (where you would expect that there might be a lot more maturity around contract management), visibility still remains an issue. If you think about it, it makes sense. It’s so easy to spin up a SharePoint site or share documents via email. These leaders know they don’t have a handle on all of the contracts shared this way, so we help them get that one area under control. We sit down and say, “Let’s centralize all of the contracts you have in a proper digital contract repository,” and then once we have that solved, we move on to the next challenge which might be looking at the actual body of the contracts and helping to establish templates. The technology is helping facilitate the process, but it’s not just about tech. We’re looking for waste and issues and simply a way to improve them. It’s not super sexy and it sounds simple, but it’s anything but. Once we help them get all these contracts in one place, we can then look at what binds them – is it time, money, etc.? Is there any flexibility to adjust relationships with vendors? What kind of leverage do you have?
For the organizations further along the maturity curve, we’re looking for bottlenecks. For example, a number of organizations will get qualitative feedback from IT that legal teams are taking too long to respond. Legal teams have very few resources. So, we sit down, and again, very practically look at: How many requests is the team getting? What is happening in the stages of review? How long is a review going to take? Then we use that to pull together a consistent set of KPIs and SLAs of how the legal team’s time is being spent and where it can be improved.
We know that time is money for GCs and CCs. If you look at Bloomberg Law’s 2022 Legal Ops and Tech Survey, 86% of respondents cited improving productivity as their reason for using legal tech. As a legal tech company, yes, we’re interested in how they use technology, but what drives us is helping solve the practical challenges of visibility into where the contracts are and then helping our customers move forward along that maturity curve.
Technology adoption is a big focus for GCs and their legal and contracting counterparts in their organizations, but technology adoption is only the beginning. The real challenge has to do with getting that technology operational in a business. What are the biggest issues facing organizations that roll out new technology like Contract Logix?
Many people in the tech industry don’t understand how to make customers successful after they deliver a product. The technology is just part of the contract lifecycle process. We want our customers to focus on their expertise as attorneys, as procurement professionals and get contracts and processes in place that support the goals of the business. Failures occur when people don’t clearly understand the problem they are trying to solve, which is why some of the advice I outlined earlier about defining problems and solving them quickly may seem common sense, but is still critical. We don’t want our customers focusing or obsessing about technology. We want them to focus on their jobs. In most cases, our customers have never used or implemented software like ours so there is a lot of change management they need to address. Our job as an organization is to help guide them through that process which is key to getting software like ours operational and adopted in a business.
It seems like implementation is more about change management than anything else. What are some practical steps organizations should take? How do you ensure successful onboarding, user adoption and long-term success?
Driving change is truly the hardest aspect of this process because you are dealing with individuals. So make it easy for them to understand. You’re going to want to address these questions:
- Why did we make this technology investment?
- Why do we need to make the process better?
- How is it going to make your life easier?
- What’s in it for you?
When you show how this will help a GC meet their billable utilization goals, improve productivity, you’re showing how these changes will make it easier to do their jobs and focus on their area of expertise.
This is why we spend so much time with our customers brainstorming and training them on change management. We lean on them to tell us about their specific organizations and their specific challenges, and THEN we work out use cases, implementation plans, configurations and processes, including workflows. We help define how they can measure success and business value.
Our planning process includes making sure that customers pick a problem that is solvable and solve that first. It’s great to have a vision and be future thinking, but you need to do the basic blocking and tackling first. You need to get it right and show progress. So, for example, a problem that can be solved: Are your contracts all in one place? If not, get all your contracts in a single repository. If that’s already done, is there too much customization happening inside your legal agreements? Solve that problem by getting a good template in place and train the organization on how to use it. After that, pick the next biggest challenge which might be something like getting all your approved language in a clause library. These are all manageable problems that can be addressed in a quarter or two and allow you to realize the business value of CLM.
What KPIs would you recommend that organizations track to measure success?
Depending on where an organization is on the CLM maturity curve, sometimes it’s really basic questions: How many contracts do we have under management right now? Vendor contracts, employee contracts, etc.? What is the dollar amount associated with those agreements? What financial obligations do we have to deliver our services to our customers or partners or to the vendors?
Another suggestion is to quantify risks and terms and to show where there is exposure by not having a NDA in place or updated certificates of insurance, having a handle on limits of liability and making sure you have the right coverage in place to operate a business. As a senior leader, this one is near and dear to my heart.
From a productivity standpoint, you can track volumes of new contract requests, the average turnaround time from new request to execution and storage of the contract, how long it takes to onboard a new vendor or employee, etc.
You can also look at KPIs that track your budget goals and savings. For example, if you’re the GC for a company that runs a hotel chain, you have certain vendors in place to provide services in hotels and want to manage that spend wisely. You’ll want to know what the existing contracts are, when the renewals are taking place and how much leverage you have in negotiating.
Can you provide some quantitative or qualitative examples of ROI an organization can get by implementing CLM?
We have so many great customer stories across industries. One of our oil and gas customers is now able to execute contracts 90% faster using our platform, and another healthcare customer reduced the time spent tracking and managing agreements by 40% in two years. We also work with large tech companies and one of our customers said that contract information that would have taken him three days to find before using Contract Logix is now findable in minutes. Another one of our large logistics customers took a look at their driver contracts and was able to make tangible improvements immediately, improving the time it took to onboard a new driver from four weeks down to two, which is a key factor in shortening their time to revenue.
A great basic example, but one that is super powerful because it quantitatively shows CLM’s impact, is looking at the numbers when an organization just puts all their agreements in one place. In a large organization when people can’t find contracts, they go to the paralegal, they don’t go to the highest paid attorney. But even the paralegal could be making $100 an hour. If they spend four hours instead of five minutes looking for a contract, in just this example, that’s $400 and can be between $8,000 to $400,000 a year just looking for information. It’s a great example to justify the cost of putting the right technology and processes in place.
Most organizations are at step one of the contract management process, and we understand that managing contracts efficiently and effectively is a key job responsibility. Getting back to basics and helping organizations take that first step is something Contract Logix excels at and is extremely proud of.
Read the original article at: ccbjournal.com or learn more about Contract Logix
About Karen Meyers
As CEO of Contract Logix, Karen Meyer leads strategy for the company and oversees all aspects of the business. She brings more than 20 years of SaaS experience building organizations to scale and drive growth. Prior to joining Contract Logix, Meyer led Upland Software’s Global Customer Success organization. She led commercial and customer engagement teams for over a dozen products and played a critical role in driving Upland’s M&A and integration strategies leading to high growth and strong customer retention.