Recently, a friend who is a General Counsel reached out for a demo of my company’s product. He asked me to sign an NDA before we discussed details, and I experienced what many of us go through on a daily basis: I opened the email’s attachment, only to discover it was the wrong contract. After a few messages back and forth, I finally got the correct NDA, but I still had to download it to my computer, print it, sign it, and send it back—Only for it to sit in someone’s email inbox. Forever.
Businesses today have learned to live with the “necessary evils” of a terrible contracting process because they don’t realize a better solution exists. In fact, many departments haven’t even identified their contracting process as a problem because it’s how things have always been done.
Your contracting process may not feel broken to you, but it’s possible the old fashioned contract approach is destroying your business Here’s why:
1. It’s not fast enough.
Technological advances are increasing the speed of business every day. Your current manual solution isn’t sustainable or scalable, and throwing more headcount and budget at the problem isn’t going to help, either.
The industry has lost sight of the original purpose of contracts—to enable businesses. But since other processes are only moving faster and a business can only move as fast as its slowest link, you’re holding back the rest of the organization, rather than enabling it.
Contracting technology is changing so fast that if you haven’t taken a look at the landscape in the last year, you’re likely missing out. And even if you were forward-thinking enough to put a CLM over five years ago, it’s likely outdated and hasn’t kept up with modern technology. You owe it to yourself and your company to stay on top of the latest developments that can benefit your bottom line.
2. You’re damaging business relationships.
It’s no secret that legal teams have a stereotypical reputation for being bottlenecks within a business. The reason this stereotype is widespread, covering all industries, is because it’s not about you or the people on your team, it’s about the one thing all departments need from legal—Contracts.
If you don’t proactively improve your contracting process and modernize your practices, you perpetuate legal’s negative reputation and isolated team structure. Without facilitating cross-functional collaboration and self-service opportunities for contracting across the business, you are holding the business back from growth and success.
3. It’s irresponsible.
As legal counsel for your organization, you have a responsibility to ensure compliance and maintain a high standard of excellence. By neglecting your business’ contracting process, you’re not only holding back the rest of the organization, but quite frankly, you’re not doing your job.
Legal departments have historically operated as a reactive function to the rest of an organization, but it’s time to be proactive. If you’re not managing your department by thinking about how to better create, control, and understand your contracts, you’re not fully honoring your commitment to your team.
4. You’re not doing anything with your contracts after they’re signed.
There’s so much that goes into the contracting process, from creation and negotiation to review and signing, it involves effort at every step of the way. But, then what? Once the process is complete, most contracts just sit in a “box”.
If a question about a specific contract arises or you need to reference an agreement’s renewal date, panic ensues. Where did we put that? Whose inbox is it in? Do they even still work here?
You need a place to store all of your organization’s contracts that allows you to search and locate agreements based on metadata. That way, you won’t lose any more sleep over where contracts are when you need them.
5. There is a better solution.
The biggest reason your old-fashioned contract process is destroying your business is because a better solution really does exist. What’s happening now with next-generation CLM and digital contracting is filled with possibilities and a different approach than before.
The idea is that you can break contracts into discrete digital elements, each of which can be connected to digital processes and workflows, speeding up your process without risking compliance.
When it comes to cross-functional relationships and your responsibility to your team, the newfound data in your contracts will help unlock new business opportunities and will help demonstrate the value of the legal organization overall.
It’s really not just legal who should be interested in the content of contracts, it’s sales, finance, HR, procurement, customer success, anyone who engages with contracts in any way.
There are more business insights to be drawn from contracts than any other document, tool, or product within an organization. When you start affecting your company’s revenue and its ability to execute business operations, everyone starts to get interested.
While, yes, your current contract process may be destroying your business, digital contracting and next-generation CLM have the potential not only to reverse the course but to pave a new path of unprecedented success. So, what are you waiting for?
About the Author
Mary Shen O’Carroll is Chief Community Officer at Ironclad, the #1 contract lifecycle management platform for innovative companies. Prior to Ironclad, she spent 13 years as Director of Legal Operations at Google where she built and managed the operations of the Legal Department allowing the organization to scale from 200 to 1400+ people. During her tenure at Google, Mary was recognized by Financial Times (2019) as a top Legal Intrapreneur, by American Bar Association as 2018 Women of Legal Tech, by the American Bar Association as Legal Rebel in 2016, and by LegalTech News as Legal Department Operations Director of the Year in 2016. In addition, she recently served as President of the Corporate Legal Operations Consortium (CLOC), the largest and fastest-growing community focused on the business of law.