By Brady Broadbent, Partner & Jacob Clark, Vice President at Sorenson Capital
In modern organizations, General Counsels and their teams have transitioned from risk managers to top-line enablers and drivers of efficiency. Just how has that happened? Technology and next-gen thinking has played a major role.
In prior decades, legal teams and the GCs that led them were either underutilized or viewed as inhibitors of growth. Drawn out contract reviews and negotiations would often destroy sales velocity and cause headaches for procurement teams. General Counsels were often ignored for the same reasons school kids avoid the hall monitor.
Legal teams also had a reputation of change resistance, especially with regard to the adoption of new technology. Though major technological shifts were impacting marketing and sales workflows and intelligence, the legal department continued to slog along with outdated software and antiquated processes. Some of that dynamic resulted from a lack of budget — no one wants to fund the team that slows down sales — but much of it was caused by legal team’s general risk-aversion mindset rather than a paradigm shift towards using the legal team to drive speed, differentiation, and corporate intelligence.
Fortunately, innovation has finally found its way to modern legal teams in a big way.
A new generation of attorneys has risen through the ranks, one which is far more comfortable with advanced software and fresh perspectives. The COVID pandemic further heightened the demand for a wave of innovation, as legal teams were forced to work remotely and embrace the technology that made a distributed legal operation possible. That innovation included online file-sharing systems, task-tracking tools, and contract analytics. After a year of working from home, legal departments are no longer an ink-on-paper operation.
Modern software didn’t just make old processes easier and more efficient; it allowed General Counsels to contribute to their businesses in new, more strategic ways, thus driving real enterprise value for their organizations.
Here’s the playbook for replicating this success with your own legal team:
Step 1: Extract Intelligence from Current Contracts
The first step to building a better, faster, more strategic legal team is to get better data. A leading-edge contract analytics suite will tell you how many contracts you have under management, break that number down by type and status of agreement (leases vs. sales contracts, lapsed vs. active agreements, in-house vs. third-party paper), and then draw key insights from your entire legal portfolio.
For example, how many customer contracts are up for renewal this quarter, and how much revenue do they represent? What percentage of your agreements allow a customer to invoke force majeure during a pandemic, and with how much notice? Which of your supplier contracts include automatic price increases, and how many of them allow you to terminate for convenience? A top-tier analytics suite can provide each of these data points, allowing GCs to serve as timely strategic advisors that drive both risk mitigation and revenue growth.
Step 2: Use Newfound Data to Inform and Improve Processes
Now that you have your data in hand, it’s time to start accelerating deal flow by improving your contracting process. A contract lifecycle management (CLM) solution can map out each step a typical deal goes through in your organization, and who touches a contract at every stage, from drafting, to review, to finalization, to execution, to renewal. No more rogue contracts drawn up by a senior executive, and no more deals stalled for review or signature due to lack of follow up. No more missed renewal/upsell opportunities due lack of insight on contract expirations.
Once you’ve got all the kinks worked out of your contract pipeline process, you can start optimizing the contracts themselves. What customer use cases are adequately served by your boilerplate language, and which scenarios require bespoke agreements? What language tends to trigger third-party objections, vs. the standardized clauses that sail through. With a little data, you can build templated contracts with swappable, pre-approved clauses, so sales reps can build acceptable agreements that don’t require lengthy reviews.
That’s how you improve contract uniformity, increase sales velocity, and drive net revenue (and continue to do so quarter after quarter).
Step 3: Adopt Further CLM Workflow Solutions
The worst mistake you can make as a GC is to adopt a platform that represents a comprehensive overhaul of your entire legal tech stack all at once. That approach will result in a heavy implementation process, months of delay, heavy requirements from dedicated administrators / IT staff, and abrupt process shifts. Instead, prioritize simple, self-service, easily configured tools that every staff member can use, rather just a handful of power-users. As discussed above, prioritize contract analytics solutions first.
Once you’ve got these powerful tools in place, you can then implement more advanced process improvement features, bringing your entire team along one step at a time. Some of these features might include: electronic signature, automated contract creation, templatized contract playbooks, inter- and intra-departmental workflow management tools / dashboards, and CRM integrations. Above all, don’t adopt a solution that requires both you and your customers to implement major workflow changes simultaneously, as that’s a guaranteed recipe for increased deal friction and frustration, rather than increasing sales velocity through step-by-step logical innovation.
Step 4: Integrate Tools Beyond Legal
Once you’ve got your legal team optimized, you can begin technical integration with other departments. Prioritize tools that offer deep integration into other leading solutions like Salesforce or Sharepoint. If Legal can generate a report of contracts coming to term, Finance should be able to do so, too — from within their own preferred finance software suite. If Legal can automatically generate an acceptable contract from a templated workflow, Sales should be able to do the same — from within their CRM solution. If Legal can automatically generate an acceptable supplier agreement from a template workflow, Procurement should be able to do the same – from their ERP or procurement solution.
Where can you start?
At Sorenson, we’ve tracked the legal tech industry for nearly a decade and have invested in the application software revolutions that have taken place in other departments within the enterprise (BambooHR, Workfront, Uniphore, Harness, SupportLogic, Amplitude, Omniture, Botkeeper, as a few examples). Much as workflow tools have revolutionized marketing, sales, human resources, customer success, finance, and product organizations, we believe end-to-end contract management suites will revolutionize legal teams over the next decade. In our view, LinkSquares is the best platform to accomplish that.
First, the company has the best contract analytics suite on the market. LinkSquares’ custom-built artificial intelligence engine can parse contract language and extract structured data from your legal portfolio. That doesn’t just power better full-text search; it allows you to create custom reports and interactive dashboards to monitor and manage key terms in your agreements. Feed it a collection of MS Word and PDF contracts, and LinkSquares returns an Excel-like report that summarizes everything you need to know about your legal portfolio.
Because it is AI-driven, LinkSquares doesn’t require you to set up a complex, rules-based system to parse and manage your contracts. Instead, implementation is quick and easy, and General Counsels can provide value to their organizations with LinkSquares ‘out of the box’ solution, without becoming trained as power users. No contact analytics solution delivers ROI faster.
When you’re ready to move beyond analytics to process optimization, the company has its own fully integrated contract status-tracking and drafting solutions. Your ability to act on the data LinkSquares generates is fast and intuitive and doesn’t require lengthy implementation processes. The platform integrates with Salesforce, Microsoft Word, and every major document storage and e-signature tool out of the box, so your teams can work in the tools they know best, shortening the learning curve and increasing your ROI.
Above all, LinkSquares has the highest rated customer service and success teams in the industry. Even though their software is already incredibly easy to deploy, configure, and use, LinkSquares is still at the ready to help you move past any roadblocks on your path to adoption.
With the incredible innovation taking place in legal tech and contract management, the GC is more empowered today than ever before. By following a thoughtful approach, GC’s can innovate quickly and finally be enabled to drive the value they’ve always been capable of. The tech is here, and you are the beneficiary of impressive new ways to facilitate corporate intelligence and sales velocity. Enjoy!!