“This book is designed specifically for legal teams to become the lean, mean contracting machines that the business needs.” p 12.
[Editor’s note: This is a four-part series that excerpts Lucy Bassli’s new book, CLM Simplified. Part I is Bassli’s full Introduction. Part II excerpts What is CLM?, Legal Policy Review, and Templates (Ch 2-4). Part III excerpts Playbooks, People, and Process (Ch 5-7). Part IV excerpts Technology, Metrics & Data, and Outsourcing (Ch 8-10).
Bassli’s excerpts reveal three things about the future of law: (1) substantial gains in legal productivity require legal professionals to build a skill set that goes beyond legal knowledge and know-how, (2) in the case of CLM, these skills are fully within the grasp of any practicing lawyer or group of lawyers who is willing to take up the challenge, (3) law is becoming multidisciplinary, which requires all legal professionals to listen, learn, and collaborate as part of a team.
It is rare that a highly specialized expert is willing to put so much of their knowledge into the public domain. Yet, when it comes to change, examples are 10x more valuable than abstractions. Without readily available examples, we risk underinvestment in what actually works. Hopefully, Bassli’s generous excerpts will enable legal leaders and managers to accurately grasp both the complexity and potential of CLM and similar productivity-enhancing initiatives. As Bassli notes, technology is important, but it comes last. Many thanks to Lucy Bassli for her generosity. wdh]
Introduction
Having spent most of my career as a commercial transactions lawyer, both at a big law firm and, mostly, inside a global legal department, I’ve seen it all when it comes to contracts.
Over the years, I have learned through trial and error the ways to make contracting simpler, smoother, and, hopefully, more predictable for the business. After all, contracts are, at their core, a business document. They are the lifeline of business.
To ground us before diving in, I’ll start by saying that contracting is a problem for every corporate law department. At every company I’ve spoken with on this subject, we usually start with a very broad list of operational challenges. Comments like, “too many contracts,” “not enough time,” and “the business is frustrated with us.”
Too often I hear, “They think we’re too slow,” “They call us the black hole,” and lots of other less flattering comments, as well. Even when relationships are good, many businesses struggle with the perception of their law department as slowing down progress.
But without contracts, business can’t be done, money can’t be made, and money can’t be spent. (Well, it can, but it shouldn’t.) Without contracts, business doesn’t move forward. Because they take time, contracts are often perceived as some sort of necessary evil; they are a step that must be taken and not one that most business owners look forward to. But we all know the legal department ends up taking the brunt of the work associated with the contracting process. Legal teams over-function; we step in to overcorrect and fix parts of the contract that we shouldn’t even review, parts the business should be handling.
All of these challenges and realities are taken into account as I walk you through how to approach the contracting problem your legal department is facing. I do this in a way that helps you move forward more efficiently, while focusing on the highest-value work you should do, rather than drown in a stack of contracts that go on and on and on.
So, how to start? First, prepare before jumping in to solve the problem. You have to take stock of what’s happening right now. Really study and understand where these contracts are flowing, who is doing them, who is touching them, and what kind of contract the company deals with on a regular basis. Set the right tone within your own department and with your business counterparts, so they understand it’s time to look at contracts holistically and that they are all in it together. This isn’t just a problem for the legal department to solve. I also want you to remember that there’s often an urgency to jump to technology to solve this problem. There is a feeling that, with the right contract management system, things will automatically improve.
There is a role for technology to play, and I certainly will get to that for sure. It is a key topic, in fact, but one I want to save until the end, on purpose. There’s a lot to do before jumping to technology.
For example, it’s important to understand the stakeholders. The various roles and people involved in the contracting process will help inform the extent of change possible, or whether it is preferable. There is a reason that lawyers over-function. Usually, it is a lack of trust in the business owners to handle contracts. That lack of trust has various sources, including: skillset gaps, disclaiming responsibilities, laziness, lack of accountability, and myriad other reasons. So, the legal team steps in and “just handles it.”
It is hard to turn over a bad contract into the hands of the business to complete. But you can look away from a bad contract. It’s quite simple. A contract lands on your desk, and you feel like you have to clean it up; you have to take a look. You can’t just let it go in the state you saw it. That’s normal, but it is not optimal. So, we want to move toward changing that feeling of obligation to clean up anything that lands on your desk.
But who besides Legal should be a part of this conversation? Who other than Legal should be in these discussions about improving the contracting process? Who will be impacted? Who will feel downstream effects of changes that you might want to make, after reviewing this course? Who will step up to more responsibility?
Another critical question: what contracts really should you tackle? What is the scope of the work Legal should handle? I suggest starting with a finite approach. Pick a particular type of contract, one you know is a pain point. Pick one that you have good clarity around: how it flows, who is touching it, and who should be touching it, plus the impact it has, of course, on the company.
It is important not to approach contracting as a general problem to be solved. That is often overwhelming. It is critical to focus on what is the one type, or few types, of contracts you want to tackle, when you are considering a holistic revision to how to approach this particular contracting problem.
Contracting is a process that touches almost every part of a company, and there could be many departments that consider it a workflow they should manage and control. Who has responsibility for contracting is an open question, answered differently at every company, but one thing is consistent: legal departments are always part of that decision and often become the default owners of this process.
This book is intended for the legal departments. While legal teams don’t own the business goals that contracts are enabling, the attorneys are usually the owners of the language that facilitates those business goals. They are tasked with ensuring that all of the regulatory, compliance, and core legal principles are covered. Since those are written by lawyers for lawyers, the entire contract becomes a document that legal teams end up handling, often from start to signature.
Here lies some of the problem I want to resolve. Since legal teams are often perceived as blockers or hurdles to efficient business (aka efficient contracting), this book is designed specifically for legal teams to become the lean, mean contracting machines that the business needs.
This book is designed to cover all aspects of the contracting process, as experienced from the perspective of the corporate legal department. While contracts flow across the company, the legal team is usually the main orchestrator of getting contracts negotiated and signed. But the process starts much before the negotiation phase and requires that the legal team create templates and also educate the business owners on how to use those templates. There needs to be a place where templates are retrieved and a place to store executed contracts within the policies defined by the legal department (usually). The book is structured so an attorney can read almost any chapter without context and capture some practical ideas for how to improve the contracting experience in their company.
Culturally, companies are different in the ways they perceive self-help and empowerment, or how they define timeliness. Similarly, companies range along a wide spectrum of digital transformation and automation, which will influence how contracting may or may not be enabled with technology. One thing is certain: every company can make improvements in how contracts are handled, and this book sheds light on how to tackle those improvements in a manageable and methodical way.
To approach this complex problem methodically, this book is divided into chapters covering the core places where improvements can be made: legal review policy, templates, playbooks, and process, among others. When tackled together, it is the combination of improvements to these various aspects that brings the greatest impact. Then considering the technologies that can enable improvements becomes almost like an engine booster to optimized contracting, while delivering critical data points to help drive decisions. The book also sheds light on alternative resourcing models and outsourcing best practices to most effectively align the right people to different parts of the contracting lifecycle.
There is a lot of work to get done to create value for law departments who are not extracting much today from their contracting lifecycle, per a recent Gartner study (Figure 1.1).
Go to Part II (270).