Post #1 & #2 of this series looked at how General Counsel is (and may always be) linked to risk. But the role – and influence – of General Counsel has expanded. Technology and data are helping legal teams add value to an enterprise. Going beyond risk and compliance to support the bottom line. This article is about increasing their effectiveness – and clout – with contract management tools.
Beyond risk: How Determine CLM turns contracts into strategic business drivers
If the general counsel’s or CLO’s office is increasingly the path to the CEO position, it’s no wonder. Few roles in a large organization can combine a 30,000-foot view with down-in-the-weeds details as the GC. Contract Lifecycle Management (CLM) is one of the best ways for anyone in legal – or across all organizational departments – to achieve that same 360°, real-time perspective.
Sure, CLM is about compliance, consistency, and access – making sure contracts adhere to corporate guidelines and language, as well as meet applicable regulatory requirements. As the accompanying article makes abundantly clear, knowing where all your contracts are, what’s in them, and what your obligations are can make or break an organization. But more than that, at its essence CLM transforms contracts into leverageable assets and competitive advantages. Contract management can help turn potential revenue leaks into revenue generators, driving business through complete visibility, which in turn means total confidence in decision making.
For general counsel, it’s critical for organizations to harness and analyze all of their contracts. A clear view of the contract portfolio directly enhances an organization’s ability to manage risk, cut additional costs and penalties, and drive expanded revenue opportunities – all potentially adding up to millions of dollars.
Obviously, for anyone who still thinks CLM is merely a repository, think again. In effect, CLM takes contracts out of “filed away” stasis and puts them on the balance sheet. Far more than just mitigating risk, these invaluable assets contain a ton of data that, accessed effectively, can be used to formulate strategic business planning. In the case of the Park City Mountain Resort example, that 20-year-old lease contract was a living document that could have had a very different outcome if the organization had been using a CLM, such as that offered by Determine Inc.
GCs at leading companies rely on CLM for situational awareness. When you’ve got thousands or tens of thousands of contracts in play at any given time, with more being created every day, no one can be expected to monitor them all. That’s what a configurable, scalable, and robust CLM does. Much more than just a repository or tactical contract creation tool, it gives you dynamic enterprise-wide visibility and control over all of your contracts.
Of course, when it comes to simplifying processes and speeding workflow, a CLM makes things easier from the get-go. As the article points out, when you’ve got control over the entire contract lifecycle – from request and authoring all the way to renewal – you know exactly what’s in each contract and why. With Determine CLM, customized forms keep contracts simple, approved templates and clause libraries empower stakeholders to collaborate, approval paths show who has seen and signed what version, and tracking keeps everyone on the same page. It replaces process inefficiencies and roadblocks (and potential risk) with accessibility and complete transparency, resulting in compliance and confidence.
According to Gartner, a leading IT research company, increasing contractual complexity (especially with increased globalization) and audit scrutiny is going to drive a 40 percent or more increase in CLM solution adoption by the end of 2017. According to Determine Inc., whether it’s improvement in revenue, cycle time reduction, increased compliance and/ or another reason, if your organization is considering implementing or upgrading a CLM, here are features to look for:
- A cloud-based solution makes implementation fast and upgrades seamless
- Scalability that allows for simple expansion regardless of how big or decentralized a company grows
- Full configurability and customization (off-the-shelf solutions reach limitations quickly)
- Notifications and alerts – you want to know way ahead of time any renewals or obligations
- Searchable and easy-to-use cloud repository with variable metadata search capability
- Contract “wizard” or tutorials to get everyone familiar and up and running quickly
- Custom approval paths – parallel or serial as needed
- E-signature integration
If you’re reading this, you’re a legal professional – so you already know to do your due diligence when choosing a CLM provider. There are a lot of choices, many features, and a range of formats. Start by talking to peers at other organizations that have successfully implemented a CLM solution.
Will a CLM be your quickest path to a CEO title? Well, put it this way: not having a CLM could be your biggest roadblock.