With 2018 winding down we are reflecting on what a great year 2018 was! We’ll have a bigger announcement soon but our Blog recently won The Expert Institute’s Best Legal Blog for the Legal Tech category! We’ve heard the “12 Days of Christmas” repeatedly this month so as 2018 comes to a close here are Nimble’s Top 12 Blog Posts from 2018:
On September 26th at TalentLaunch in suburban Clevelad, we gathered 9 legal industry thought leaders (in-house counsel, law firm partners, law firm CFOs, and Plante Moran’s law firm practice partner) to discuss the pressures law departments and law firms face and how they can work together better. In attendance were various General Counsels, in-house counsels, Managing Partners of law firms, law firm pricing analysts, and members of various alternative legal service providers and legal technology companies.
Here are the highlights:
At Nimble, we use a contract management system to create, negotiate, execute, and manage contracts for our clients (and ourselves!). We offer this as part of our Contract Review Managed Service. Automation and data are two of the great benefits provided by a contract management system.
Impediments to Execution
When I was a General Counsel, our internal clients dreaded how long it took for contracts to be reviewed, negotiated, and signed. There are many impediments to getting a contract signed including:
Back in January of 2017, we made 8 predictions about the legal industry for the upcoming year. You can read that blog post by clicking here. That was also our first ever blog post (sniffle, sniffle)! Is that the digital equivalent of a rookie card?
We gazed longingly into the Nimble Magic Eight Ball and tossed out these 8 predictions about the legal industry in 2017:
If your law department or law firm is still delivering legal services the same way it was doing it 10 years ago, you’re behind. Change is happening because purchasers of legal service are demanding it and innovative legal service delivery models have entered the marketplace.
On October 25, 2017, we convened our 2017 Nimble Forum on Legal Industry Pressures, Operation Efficiency, and Pricing Strategies. Our first panel had a thought-provoking discussion on Legal Industry Pressures and identified 8 Key Trends in the Legal Industry. The idea of this Nimble Forum was spawned by our 2017 Legal Market Outlook Survey. You can get a complimentary copy of those results here.
Our great panelists for this topic were:
- Teresan Gilbert-Chief Intellectual Property Counsel at Lubrizol
- Nancy Berardinelli-Krantz-VP and Chief Counsel, Litigation at Eaton
- Bill Garcia-Chief Practice Innovation Officer at Thompson Hine LLP
- Rebecca Grunick-Senior Director at Black Letter Discovery
The 8 Key Trends identified in the discussion are:
1. Law Department Budget Cuts. Law Departments are expected to “Do More With Less.” Law Department Budget is not coming back. The law department is expected to act like every other department and create efficiencies and help provide some return on investment. Sometimes this means creating self-help tools to enable non-lawyers to do some of the work that the law department used to do. Other times it means finding ways to use technology to automate tasks. Law departments and law firms are sitting on a lot of unmined data. By gathering the data and interpreting it, law departments and law firms can make many more strategic and prioritization legal spend decisions, which transitions nicely to #2.
2. Legal Operations. Law departments and law firms are sitting on a mountain of data. Lawyers need to adapt how they work and start to see some of what they do as a repeatable process. Every litigation has similar steps, a similar process. Each acquisition transaction is different in some way but, in general, the overall process is the same. There are organizations like CLOC (the Corporate Legal Operations Consortium), that are pushing for standardization of legal processes.
3. Innovation. From alternative legal service providers to legal technology to CLOC there is a ton of innovation going on in the legal industry. Each is innovating legal service delivery. The widespread adoption of these innovators has been slower than in other industries because lawyers are typically risk adverse. Law firms that partner with alternative legal service providers are seen as innovative and progressive by purchasers of legal service.
4. Talent Development and Management. It is not enough to be a “good lawyer.” Within law departments, the lawyers also have to be legal operations specialists. Business acumen is critical. You have to be able to provide strategic data and metrics to your business partners. Many senior lawyers are aiming to avoid change because they think they’ll be gone before they are forced to. Many younger lawyers are hungry for change and innovation. What does the role of a lawyer look like in 5 to 10 years? Will law firms hire a non-lawyer sales force? How are law departments and law firms developing their talent pools? What is the succession planning for baby boomers?
5. Diversity and Inclusion. Purchasers of legal service are serious about their commitment to diversity and inclusion and are ceasing to do work with law firms that are not showing a similar commitment. Eaton has a goal of one-third of their North American outside legal spend going to diverse firms.
6. Feedback and Continuous Improvement. More and more law departments are conducting a formal annual review process of their legal service providers. Law departments want their law firms to reciprocate with client satisfaction surveys and performance review meetings. Law departments are looking for true business partners that add value, continuously get better, and provide business intelligence. This is the type of relationship building they are looking for and not tickets to basketball games and concerts.
7. Convergence/Consolidation. Tied to #7 and the annual review process is the consolidation of legal service providers. This is an ongoing trend and the law departments represented on our panel talked about how they removed up to 10 law firms last year due to performance issues whether that be efficiency or what was viewed as a lack of commitment to diversity. Consolidation of legal service providers allows the law department to wield more pricing power soliciting larger volume discounts.
8. Cost Certainty. Purchasers of legal service are looking for cost certainty. That is not going to change. Law firms continue to struggle with budgets. “I need a number not a range.” Law firms are failing to proactively offer alternative fee arrangements. Meanwhile, law departments are getting more sophisticated with their data. They know what most types of matters should cost because they’ve mined that data. Law departments are looking for cost certainty and creativity when it comes to pricing. Proposing hourly rate structures in RFP responses is viewed negatively.
If you thought this discussion was great, come to our next Nimble Forum on Hiring & Culture: Best Practices. We have another great group of panelists. Click Here for more information.
If you looking to improve your legal service provider selection process, take a look at the Nimble Guide to the Legal Service Provider Selection Process by clicking here.
Law departments are increasingly expected to be business partners, collaborating with executives and other functional experts to drive results. Often times, the legal function struggles (or doesn't know where to begin) to develop metrics and data to provide business related legal intelligence to its business partners. One of the quick ways for law departments to provide valuable data to its business partners is to implement a Contract Management System, whether licensing it directly or working with a service provider that uses one currently.
The legal world has been slow to embrace technology to help solve business problems. For example, the contract. Even some of the most sophisticated organizations are still creating and working with contracts in Microsoft Word. Sometimes using an agreement from the last deal that has specific negotiated provisions for that last deal that have nothing to do with the current one. Email remains the primary means of delivery and sometimes...even storage of the contract. See "The Future of Legal Work" by Constantine Limberakis of Corporate Counsel.
Great! Let's go get a Contract Management System!
If only it were that easy. There are no shortage of Contract Management System or Contract Lifecycle Management System providers. Each solution comes with its positives and negatives. Some charge you for storage. Some charge per user. Some charge for you to invite third party collaborators to use the system (such as the other party to the contract). Some charge by number of contracts. It's difficult to do an apples to apples comparison.
And while there are all of those (and many more) issues to review and identify, you also need to know what is the current end-to-end process internally for initiating, drafting, negotiating, executing, storing and analyzing contracts. Who touches these contracts in one way or another? Who will want access later? What other information systems are currently being used and will your functional business partners (HR, Finance, Business Development, Operations, etc.) want to pull data from the Contract Management System into the systems that they use?
7 Key Contract Management System Features
With all of that said, here are 7 features that should be a part of any Contract Management System you select:
1. Multiparty Collaboration - You want a system that allows the other party to the contract to access the contract you're negotiating within your system. You also may want access for advisors like lawyers and accountants.
2. Electronic Signature - Why go to all this effort if the contracts can't be signed electronically within the system? You might as well go back to faxing.
3. Workflow Management - An excellent feature that provides transparency about where the real bottlenecks in the process are.
4. Contract Compliance - Can you audit who made what changes and when? Also great for enforcement of terms.
5. Contract Storage - Get away from shared drives, external hard drives and your email inbox for contract storage. There's nothing worse than the scramble to find "anyone that has a copy of that contract from 5 years ago" and it's a random redline that someone found lingering in their email inbox. The accessibility for all users is also great.
6. Analytics and Data - Want to know how long it takes your form supply agreement to get negotiated and signed on average? Most Contract Management systems will arm you with that data. Identify what data you'd like to have and use that to weed out some of the providers that are unable to deliver.
7. Integrations - Any Contract Management System that you are considering should integrate easily (at no additional cost) with systems like Oracle, SAP, or Salesforce. You should work with your Information Technology team to identify what other systems you might want your Contract Management System to integrate with.
The right Contract Management System can streamline legal operations significantly, standardize the contract process, and arm the legal team with useful legal business intelligence to share with its functional business partners.