How to cut legal costs and equip front line employees to avoid basic risks?
- Automate as much as possible of the otherwise clumsy, slow, and (traditionally) manual process of creating and negotiating contracts;
- Then automate use of those contracts’ terms to execute what you agreed to do for your customers;
- And manage revenue collection from your customers under those terms.
At the beginning of the contract life cycle, the money doesn’t come in until the needed formalities are completed. Later on, front line employees need to know exactly what’s in a contract to keep your company in compliance with it.
And to get everything that’s coming to your company under the contract’s terms.
Olga V. Mack, former corporate general counsel, now CEO of Parley Pro, a contract management company that provides online negotiation technology, and adjunct professor of law at the University of California at Berkeley (Boalt Hall), writes:
” … The legal department isn’t traditionally seen as a hotbed for innovative ideas that fuel corporate growth. In fact, according to a popular view, legal departments are black holes that strangle the life out of fast-moving deals and potentially profitable partnerships.”
She states that companies’ law functions should adopt contract management software to:
” … Modernize contracting processes …. to transform your [Legal] department into a virtual expressway that accelerates million dollar opportunities and primes profitable business relationships for success.”
The status quo — in most businesses and in most of their outside law firms and inside counsel departments — consists of paperwork. Lots of it. Some of it literal hard copy; some of it digital.
But most paperwork — and much electronic documentation — requires human beings running their eyes over text. And with even small companies involved with thousands of contracts, that means labor-intensive work.
And exposure to human error.
Lucy Endel Bassli is a former Microsoft Assistant General Counsel, in a role that Bloomberg Law described this way:
” … Managing the team responsible for legal support of Microsoft’s procurement and outsourcing functions, IT functions and commercial operations — and overseeing the corporation’s buy-side contracting tools and processes. Her unit also is responsible for managing Microsoft’s global contract repositories and supporting the process of e-signatures and storage.”
Last year she launched her own private practice as consultant and attorney to companies seeking greater efficiency and accuracy in their delivery of legal services.
In an article Wednesday (December 18, 2019), Lucy Bassli observed:
” … Every company has contracts. To make money, companies need to execute contracts. As companies grow, those contracts grow in number and complexity, and the legal team is often the one tasked with figuring out how to get them done faster … Most companies struggle to keep up with their contracting volumes.”
Ms. Bassli breaks down the specific, sequential steps involved in the life of a contract:
“Taking a step back, the lifecycle of a contract is quite simple and relatable across all contract types. I like to use this visual:
“In the best and highest use of the legal team’s resources, attorneys and other para professionals in the legal department should be spending time only on the Create & Negotiate phases of the lifecycle (assuming that the Approve phase is handled by other stakeholders such as finance, procurement, sales, etc.). As legal teams discover that other phases are not being handled effectively, and most importantly, contracts can’t be found or managed, they begin to look for ways to enable the other functions that must be performed. Enter technology!”
Lucy Endell Bassli is probably the leading pioneer in applying technology to this otherwise clumsy, slow, and (traditionally) manual process.
The point for business leaders is simple: For those companies who, in Ms. Bassli’s words — “struggle to keep up with their contracting volumes” — there’s a software answer to their dilemma.
And — with the right processes put in place — software can increase the accuracy, enhance the speed, and cut the costs of contract management.
But the legal profession’s adoption of the necessary technology — and sharing of contract management duties with other corporate functions — is still in early days.