#39 - Mary's Guide to CLM

Hello everyone, and welcome to Pearls on Gloves Off. I'm your host, Mary o'. Carroll. And today I wanted to do something different and talk all about contracts and clm. The reason why is that I'm out there every day talking to so many people in this legal ecosystem, from legal ops professionals and General Counsels and CLOs and Managed Services providers and consultants. And CLM is this topic that comes up nonstop as something that everyone is focused on. But then they ask, is there any way you can do a masterclass? Can you write a book on this? Can you write a blog? Can you teach a 101 on everything you need to know about CLM? Now, I don't pretend to know everything there is about clm, but I have had my own experiences trying to implement clm. I've had failures on it. I have lessons learned from that. Of course, I work at Ironclad right now, which is a contracts lifecycle management company. And being out there speaking to so many of our customers and people in the community about how they have approached their contracts challenges and how they're dealing with it, I have learned a lot and I do have a lot of ideas and perspectives to share. So today's episode is going to be really focused on that. Just me talking to you, sharing very transparently what I've seen, what I've learned, what I think some of the best practices are, what possibly are some things to try to avoid or even just think about as you approach your journey into something that's quite complicated but doesn't have to be as scary as many of us think it is. So let's dive in.

Mary's guide to CLM in eight Chapters. Chapter one, the Broken World of Contracts, Challenges and Opportunities.

Why contracts? Why is it that this is an area that everyone is so focused on? Well, you know, quite frankly, every company has contracts. Doesn't matter if you are big, if you're small, if you're in a different industry, or what part of the world you're in. Without fail, whether you are Amazon or you are a local barbershop, you are going to have contracts to run your business. And what I have found, and I'm sure you guys can all relate, is that it's a broken process. Everywhere you go, if you ask someone, do you love the way that your organization contracts, you're going to have people say no, whether they are the legal team, whether they are the client, whether they are the counterparty. It's just a broken process. And my challenge with it really is that it puts legal in A bad way light, right? If you think about legal having this bad reputation as the office of no, the place that, you know, all business slows down or things go to die. Those are horrible things that legal has this reputation. And why is that? Is it because of your M and A counsel? Is it because of your privacy counsel? Is it because of your real estate counseling team? No. It all comes back to the contracting experience that all your internal stakeholders have because they are entering into contracts because they're trying to get stuff done in the organization and we want to move quickly. In addition, if you think about every part of a business right now, businesses have digitized, right? Everyone expects a digital experience in the way that they work. And we see that throughout the modern corporation. You have salesforce, you have workday, you have all these parts of the company that have software, have processes that are working, and your contracts and your legal department don't have a whole lot right now. So we, I think, are the final frontier of digital transformation in the organization. Oftentimes, even though the rest of the business has digitized, they get to contracting and everything comes to a halt. It's going to feel disjointed, it's going to feel archaic, and it's still based on sort of that pre Internet boom technology and principles. So we as legal departments, we strive to be more than a cost center. Contracts are to blame for our poor reputation in an organization. They are rigid, time consuming. They introduce friction and delay in your ability to close deals, to execute on business operations. They're hard to create, but they don't deliver much value. They're static, right? We create them, we forget them, we put them into a box somewhere and we only revisit them if there's a problem or a disagreement later on. And all that information that is contained within those contracts is completely untapped right now. So we have this onerous, highly manual administrative challenge. It's got no strategic value. It erodes the business relationship. So that's why I think the contracting process is totally broken. So what we need to do today, what everyone is kind of feeling is like we need to completely redefine this, make it easier for people and organizations to connect in relationships of value. And that's why to me, the opportunity in fixing contracts is so enormous. Any improvement to the way they're executed, the way they're managed, has the potential to unlock and create extreme value that does not currently exist. There is no way to do some of this stuff today. Taking friction out of that process, it's not just about saving time and creating a better human experience. But it makes it easier for people to come together in meaningful relationships across your company. And the information that is locked in the contracts right now, we can tap those for insights and trends. This data is gold. I cannot stress this enough. We've spent decades executing these contracts, never to look at them again. But there is more rich and valuable data and business insights in those bodies of contracts than there are anywhere else in our company. And if we can find a way to unlock that, and we have, we can not just impact legal, but impact the entire company. Company. We can manage our supply chains better, improve the alignment of our payment terms to our business interests. We can become more responsible to shifting market conditions. Really, the possibilities are endless. For legal teams. That would mean instead of being a burden, you can become a strategic and much more engaged force within the business. Okay, so if you're with me, we, we all agree contracting is broken. Something needs to be done about it and the opportunity is huge. Well, who should own this process?

Chapter 2 who should own the contracting process?

Everyone in the company touches contracts. Different teams have contracts, different product areas. Everyone's going to touch the contract. But only legal touches every contract. Right. We come across every single contract, whether it's sales, whether it's procurement, whether it's a partnership, a licensing, that's going to come across legal desks. And so of course the job is to minimize risk, standardize terms and so on. And of course there is a matrix of stakeholders and responsibilities. There's finance, there's all these other teams. But I think the overall ownership should still lie with the general counsel. That's my point of view. I'm sure there's others who feel different ways, but we've got to put the legal controls on every single contract. So can somebody else manage and own the relationship of the contract? Can someone else track the milestones, the renewals, the dates, make sure we're in compliance? Yes, of course that can be done by other parties. So yes, there are multiple people involved in the contracting process, but the process of tracking it all and owning and maintaining that single source of truth, that self system, that tool, that platform, I think that should live with legal. And I think what GCs often get scared of is that it's complicated, it's cross functional. I want gcs to step up and own this because the piece that they often fail to see is that there is so much value in owning the contracts because of that data, the power of the data that we just talked about, extracting that data Analyzing it, you're able to predict so much. It's the truth behind every dollar that flows in and out of the company. All your partnerships, all your alliances, your licensing strategies, everyone who's hired, everyone who's contracted with you can't run a business without that data and it's been locked up forever. So I've said it many times now, with AI even we're able to analyze, produce insights. And so you want to own that? Do you want to be the team that has the insights and that can spot the trends and the hotspots within your company? And to be able to conduct the strategic analysis on pricing scenarios and contracted deals and forecasting accuracy, knowing what your committed spend is. That is an opportunity to differentiate and to change the seat that GCs and CLOs and legal overall currently has at the leadership team table. So think about that. When you can bring data to that conversation, everyone starts to look at you in a different light. Legal can't just be reactive with that data. You can be proactive about the business.

Chapter 3 the evolution of CLM why now?

Well, CLM contracts lifecycle management has really changed in recent years, making it much more approachable, much more realistic to make successful. And I want to spend just a moment talking about how CLM has transformed and what the landscape looks like. So the last 30 years, I think in the 90s and the 2000s we had had what was known as the database era. During this time you had really highly customized, almost just document management type systems that were on prem required long implementations. And I don't think that you would necessarily call them CLMs because they were really, you might remember the term CMS from back then, contracts management systems. They are glorified databases where contracts went to be stored. Things like SAP, ariba, Oracle, these were kind of old, older systems that people were using in the past to manage their contracts. Well then we got into the 2010s where companies started to emerge to attack different parts of the life cycle of the contracting experience. So you had doc, Generation E, signature, task management and lots of tools for different specific stages of the contract process. Well, the current CLM landscape is very different now we're in the 2000 and 20s and the modern CLMs need to solve a variety of problems and to manage the entire full contract process. So you can't just have a repository or repository or be just one part of the life cycle. So again we move from what was, I think called contracts management systems, CMS to clms, which are contracts life cycle management. Very specifically focusing on that lifecycle piece because it needs to do everything from contract generation to negotiation to sorry assignment to negotiation, redlining, approvals, routing, execution, storage, repository reporting and metrics, obligations management. You want one system to do it all. And on top of that, these CLMs have to have collaboration modules. More and more people and teams across your company are touching contracts, sales, procurement, legal, finance, hr. This is a collaborative process. All these teams need to be working collectively within a system that they can all access. So we finally are in a place where there are a variety of contracting systems that do the eight steps of digital contracting or contracts lifecycle management. Again, those are things from the generation or request of a contract to the negotiation. You might want to have your playbooks and your fallbacks in the system so that you can negotiate and redline in what within the system. Then you want to route it to the right people for approval. It then gets routed to be accepted, whether that's signature or click to accept. Then it is obviously signed and then fulfilled. Then we want to store it and have a repository for it. We want to be able to analyze and unlock that data, whether it's in reporting metrics and dashboards and then also stay on top of your obligations. Where are your renewals, what can we be notified of that are coming up? So this is an entire life cycle that you want to manage. So what does the current landscape look like for clm? I think it is very overwhelming. I feel a lot of empathy for the folks who are looking at CLM these days because there are so many providers. And what's crazy to me is there still seem to be new providers emerging out of the woodworks all the time, or companies that are established that say, oh guess what, we have a CLM module as well. It is a saturated market because there's such a great need that has been untapped for so long. So if you are thinking about this, I want to walk through kind of what the landscape looks like. So we said there are sort of archaic CMS systems. Then came older systems that have now moved to the cloud. So they're not necessarily just on prem. They are SaaS solutions, but they were built on sort of legacy technology. They existed, let's say 10 years ago, even five years ago, where there's a lot of customization required or even available. So they can do a lot of things. But you're going to need developers or people in your IT organization to help you because it is in pretty complex code to make changes or to configure the system. You might need to rely on professional services to make those changes. The user interface is older, it's clunky. Because of that we have all this sort of ptsd. You might remember the failed CLM implementation, all these kind of horror stories because of the legacy systems that we had to deal with in the past. Well, the good news is in recent years we've had the emergence of a much more modern type of clm. So first we had again those point solutions that emerged that were, let's say, focused on the repository and search or focused on document generation and what I call like automation and workflows or maybe were e signature. Now what people realized was, look, buyers don't want to just buy one point solution after another and have sort of a disjointed experience for both your internal clients and your legal teams as they navigate through the lifecycle contract. We want something that can do it all. So many of these companies have now expanded to do all parts of the contract's lifecycle. But what you'll find is, and you know, I just want to keep people aware of what to be looking for when you're navigating this landscape. They might do one area much better than the other. The area maybe that they started with and then they expanded out of is not as built out or robust as perhaps the features in the area that they are stronger in. Something to consider if there's something you're looking for specifically. There were also the emergence of contracts lifecycle or contracts companies that focused on a certain type of contract. So you might have had companies that were really good at sales contracts and that was their focus or those were focused on being a procurement system, contracts procurement system. Or you had others that were really good for non negotiated sort of self service type contracts and then those that had really complicated playbooks for, you know, hundred page document type contracts. Well, the same thing happened where the buyer said I don't want to have five systems, I want to have one system. Can you handle all the contracts? And so many of these systems started to expand and say, sure, we can do the other type of contracts as well. But again, something to note, can that system do all of contracts well or are they stronger in one than another? And then you still have some point solutions, especially with the emergence of AI that can bolt onto systems now and do one part of that lifecycle or make one part a little bit more robust. So think about as you begin your journey, as you look across landscape and are overwhelmed by the many types of providers, what is important to your organization? How Many systems do you want to have? What do you currently have? And then consider all your options. Now you might ask, what about Ironclad? What do they do? Mary, you work there. So I will say I think Ironclad is uniquely purpose built to enable the entire life cycle from the beginning of its establishment as a company and always had in mind the goal of being able to service every type of contract. So does that make us unique? I think so. And you might say, well Mary, you're a bit biased because you worked there and that may be, but I like to think I'm not biased. I actually looked across the landscape many times and sort of decided to bet my career that this was the one that was going to be the winner. So that's my plug for Ironclad. And that's all you're going to hear about Ironclad, I think for the rest of my conversation today. Because that's not what this is about.

Chapter four who owns CLM and how.

To get buy in all right, so we've gone through why it's broken, why you want to fix it in your organization, what the landscape currently looks like. Well, why is it so hard though? The first thing that you're going to hear is that, you know, nobody owns contracting. Or the question comes up all the time who should actually own contracting. Sometimes it's legal, sometimes it's finance, sometimes there's a shared center of excellence or a shared service center, sometimes it's owned by procurement, sales. Or you know, you might find all these groups collectively kind of own part of the contracting process. And what you will also find is when everybody owns it, that means nobody owns it. So it is a very hard project because it is cross functional in nature. Historically there hasn't been an owner, there isn't a standard way to do it across all companies and organizations. There isn't a best practice yet. So what that means is someone in the organization has to step up, has to recognize that it is broken across the entire organization and that nobody thinks it's working well. And that person has to step up and say, I'm willing to get everyone together and make this happen. And again, we've already talked about why. I feel very strongly that this should be the GC's role or legal ops in lieu of the GC. But a forward thinking GC should really see this as an opportunity to move your department from being a bottleneck to a hero and to be a game changer to many parts of your leadership team. So doing this right means positioning yourself at the center of a distributed hub of all these stakeholders. Many complex needs, many requirements. Now this is hard, this is real work. It takes time, it takes dedication, it takes focus. You need, this is a big project. You actually need someone to focus on it as part of their day job, not just something they're dabbling for. Legal ops professionals who often get tapped to do this in partnership with it, in partnership with sales ops, finance ops. This is a great project. Personally, it is a great opportunity to expand your relationships across the business, to build your relevance across the business, to understand how the entire business works. I mean there is nothing that surfaces more the inner workings of the way the company gets stuff done than understanding how business processes and contracts align throughout the company. So now we are at the phase where we're convinced someone has stepped up to own the project. How do you begin your CLM project? Well, you're going to probably have to make a business case, you're probably going to have to get some buy in and ah, the dreaded getting of the budget. So start with going to your stakeholders, doing some listening. I try to figure out what matters to each of these stakeholders. They're all going to be very different. I try to speak to them in their own language. So to give you an example, many of you know I came before I got into the legal world. I came from a finance background. I was an investment banker and then a management consultant. And so I was trained in the school of thought that all decisions were made based on roi, return on investment. Basically you do the analysis. If there's a positive return on the investment, then of course you go forward. Well, surprise. I learned the hard way that argument doesn't necessarily resonate really well with your attorneys. They don't care about your roi, your cost savings, your efficiency. I think you see this across the life of a legal ops professional. Everyone you talk to as a stakeholder is going to be asking themselves one question, what's in it for me? Right? Wifm, the acronym. What's in it for me? Why should I listen? Why should I care? How does this affect me? Why are you telling me this? Why should I put aside all the stuff on my plate to think about what this project is? And so for the lawyers, think about their experience, what matters to them. Is it getting that monotonous like NDA work off their plates maybe? Is it getting their clients off their backs and telling them, oh, you don't have to get hanged every five minutes by your clients saying where is that? Where's that contract? Have you looked at it has the counterparty signed it yet. Maybe they want visibility. Is it getting better work life balance? Being able to work on the right stuff and not being again, working on the things that probably shouldn't be surface to legal. Is it being able to showcase their good work to their boss to get promoted to show that they've increased their metrics that are they're taking on the bigger deals, that their complexity has gone up? Those are the things you want to try to talk to legal about. Now, if you're trying to get that very difficult budget from finance, that's a different conversation. Right. And I don't think finance necessarily cares about work life balance or professional development. So here's where the ROI and efficiency conversation does matter. You want to talk about the impact to the bottom line as a result of revenue acceleration of deals. Getting sales deals done faster is going to have a direct impact on the bottom line of your company. Okay, Things like, hey, we can prevent ourselves from renewing procurement contracts or software contracts that we didn't want to renew but we didn't realize had auto renewal. So let's make sure that we have some controls around that. Here are the things that are up for renewal that we didn't know about. Can we move faster? Can we save more money? Can we save time? Can we save headcount? All right, so who else do you need to talk to? Let's say sales. What is the sales Persona interested in? They don't care about roi, they don't care about your work life balance and legal for sales. They only care about one thing and that's faster deal times. Let's get legal out of the way. Let's not have to deal with legal. Right. They want more transparency as to where things are. And the list goes on and on. So later we'll talk about how to get people aligned and bought into the new process. Sometimes people just aren't convinced that things are broken at all. So, you know, we've talked about what are the ways to talk to different stakeholders. But what if you talk to a group and they go, you know what? We've been contracting this way for, I don't know, over 30 years. Our clients are happy. There's nothing to see here, there's nothing to change here. It's not. Well, for me, this is a very frustrating response because I would argue that it is very broken. There are teams that are using spreadsheets, that are just using email, that don't know where all their documents are, that don't know what's in them. And is that okay? I would say that it's not okay. And when there are better ways of doing things well, that sometimes that changes can be scary, it can be threatening. Nobody likes you to come in and move their cheese. It's also threatening because, well, gee, if you automate a lot of this work or if you introduce AI, my God, what does that mean for me and my job? If AI can help negotiate, why do you need me around? Right? So there's a lot of just human emotion and reaction to things like big changes and contracts are going to be no different when people say, well, it's always been this way, it's not broken. I think that education is such an important part of the transformation because unless you know what the future looks like or what's possible or they know what you're talking about when you say clm, they don't know what it really means. And you know, to be fair, the technology has changed so much and so fast that there's no way to stay on top of things. Really? Well, especially if you are someone even like me, right, who has experienced CLM of the past or has looked at implementing a CLM five years ago, they feel like they're in the know, they've looked at it before. CLM really isn't for us. But that's not really well informed, right? Because we know how much has changed. We know that the clunky systems of the past that were difficult, if not impossible to implement have been replaced by much, much better, easy to use systems and tools that can be successful and very quick. So can you show people instead of telling them, can you get them in to see a demo? Well, sometimes I think even saying, can you come see a demo? Is too threatening. I like to position it as a lunch and learn. And I've talked to a lot of folks in the industry about this and they've said, they've come back and said, mary, it worked really well by saying, you know, would you like to come to a lunch and learn? Hey, look, we're not going to buy anything in our department. We're not even considering anything you say, hey, look, I just thought it'd be good to bring everyone together and kind of stay on top of what's happening in the industry. Let's see what our peers are doing, let's see what our competitors are doing. Let's just take a look at what's out there and available these days. And then what happens is they see it and they realize how helpful these tools can actually be. They see how Far these tools have come and are different from let's say the tools of five years ago. So I've heard it over and over now, stakeholders, lawyers, sales folks, finance folks, they leave the meeting, even it right going hey, this is really great. Or then they try to, they start to think that this is their idea, the clm and they say things like, hey, we should be doing something like this. Hey legal ops, why we don't even we have this yet. Can we get this? Is someone working on this? And that is a great way again to get people to open their eyes, interested and start pushing for it themselves. So that's one approach. And if you've got other ideas about how to bring people around and to open their eyes again to that art of the possible, I would love to know.

Chapter 5 Scoping Requirements okay, so let's.

Say you've been successful. We have people bought into the idea of needing a new system and they say yeah, let's start thinking about a clm. Maybe our current process isn't that great. All right, now what do you do to get the project start? Well, the first step is going to be requirements gathering. You might have heard of the term brd, a business requirements doc. You got to start getting that together as part of your technical project management. So here's helpful hints that I've learned along the way, probably the hard way, of what not to do. So my advice, what you should not do is go around to all these cross functional stakeholders and ask them for their requirements. You say what? Well, I think that's a surefire way to get things grinding to a immediate halt. And for one, it actually sets expectations that the requirements that they tell you are going to be prioritized and you end up going around and you get a complete set of requirements and must haves from every single group. And I promise you, you're not going to have the same must haves and requirements from every single group. In fact, you're going to have all different ones and trying to harmonize that or to try to get this group of many cross functional stakeholders to agree on. Well, okay, here's our collective list. Let's figure out what the priorities are from this list and agree on those. Let's agree on the top 10. Never going to happen. It will take years. And I am speaking from experience, getting a council or a committee together will not work either. Particularly if you are a large organization that has a lot of different stakeholders and moving parts. So what should you do? Well, I suggest try going around and asking things a Different way. Instead of saying, what are your requirements? What do you want from a new system? I like to position it as, okay, what's working well with your current process? With contracting? What do you think is broken about it? What could be better? What are some of your pain points? What does the ideal state look like for you? How would you like to work? What system would you like to work in? Where do you currently work? Okay, so with that you're setting yourself up to get input on the current state, what the pain points are, what they think success might look like. Without getting specifics on, I must have this red button or this specific report or it must have this functionality. Right. So what you would do then is go ahead and map out that current process, see where the places are that could be improved, get that from all the groups and then you can start to design a process. But stay very open minded and flexible. Okay. Because I think the challenge with contracting is that there is no standard way to do it. That is true across groups, that is true across companies. I think that's also what makes it very hard to be a contracting software company because everybody wants to do it a different way. We haven't gotten to the maturity of our industry to a point where everyone has a standard operating procedure. So with every team doing it a little differently, you're going to see that there is no perfect software out. If everyone did it the same contract solutions could kind of build around that. But without that, you're going to be looking at configuration customization versus what's out of the box. And nothing is going to be perfect for your companies. So I think my guidance is always, you Hear me say 80% a lot. I love 80%. 80% is good enough. Don't let perfection be the enemy of the good. Do what you can. So if you can get to 80% of what you want for each of the teams, that's a pretty good win. You're not going to get to 100% for everyone. Then you want to find a company that you can work with that's a good partner that's going to help you and continue to innovate and develop the product over time to become a better fit to fix that last 20% for everyone through the journey may not ever totally get there, but at least you've got something that works well for everyone. Okay, now you might start to think, whoa, oh, you said the word customize. And I came. I wanted to come back to this point earlier. Right. So you have a spectrum of, let's say, out of the box and simple plug and play. You have what's in the middle of complexity that I like to call configuration. So that's making changes and tweaks with in the platform. And then the last more complicated is customization. And to me that requires code that requires actually changing the way the software works to fit your needs. Okay. And you might think, oh well, if I can customize something fully to my company and fit all my needs, then that must be the perfect solution because we have a specific way of doing things. Well, sure you can do that. I would give a big word of caution. Customizing things is very challenging for you to eventually manage and administer and maintain. To do that you are probably going to need a lot of professional services from your vendor and or IT resources and developers internally. And when you make these changes in the future, your vendor can't help you because they've moved on to let's say a new version. Your platform has changed. Yours is so customized that you can't even upgrade to take advantage of, let's say the new features, the new build outs. I have lived this. It becomes much of a nightmare. It becomes very expensive, difficult and time consuming to maintain. Now on the very other end of the spectrum, we talked about simple out of the box, plug and play. That is great. If you're a smaller company doesn't have like their processes set in stone, people are willing to be very flexible to the process that the software out of the box is going to shuttle you through. That's perfect. Good for you. I'd say both of those are going to be rare instances where you're going to need extremes on both. Most companies are going to need something more in the middle and that is where the word configuration comes into place. Do you want to start to think, can you configure it yourself as a, let's say IT team legal department, whoever is owning the system, can you make changes on the fly? Does it require developers? Does it require service providers to make it? Is it no code? Does it require code? These are things that you want to think about because the system is not set it and forget it. It's going to need changes all the time. Your templates will change, your approval routes will change. Your ways that you want to configure. The system will change over time. So know that you want it to be nimble. You want it to be able to grow with you and change with you constantly.

Chapter 6 what to look for from.

Your CLM VENDOR so some things and best practices that I would just tell you to think about as you evaluate your vendors. Number one, can we do it ourselves? I've kind of touched on this throughout the conversation today. But is it no code? Is it really no code? Like do you need to take a two week training course for you to actually make workflows or make changes and edits? Can you do it in real time or is it truly no code where it's intuitive that you might have to take a little bit of training and learning, but you can figure it out? Look, every legal department I've ever encountered does not have the luxury of time or money to rely on professional services or vendors or IT to do things for us quickly. You need a modern system. You want to be able to move fast and make changes in real time. I have had my own failed implementations in the past at Google. One of the biggest realizations that I had was contracts are a living, breathing, constantly changing organism in your company. You are going to need to make changes to language, to approvals, to workflows, integrate with new systems, add new users, add new groups. So make sure you set that expectation up front that you are going to need a dedicated resource who stays around after the project is implemented. I'm going to talk a little bit about more about what those options are to maintain and administer the system. But most of all, I want you to know that you should be able to do it all yourself. In the past, one of my failed implementations was with a system where if we wanted to add an approver or change some of the language, we had to get in a queue to get professional services and developers to make those changes. And sometimes it would take two weeks, sometimes it would get take two months to get that change into the system. And as you all know, we're trying to move at the speed of business. And gosh, when I need that change made, I need it made now, I need it made yesterday. And so the idea that I have to sit around and stop all the work on this workflow for weeks at a time was just not scalable, unmanageable. And you end up taking that contract out of the system and going back to a manual process, which is exactly what we don't want to be doing. So just something to be mindful of. Okay, number two or another thing to consider is really importantly, what does adoption look like? Okay, we talk so much about change management when it comes to legal ops, but specifically when it comes to CLM projects, because in the past the software was very challenging. You had to convince people to do things that they didn't want to do it was like asking for a favor when I joined Ironcloud, you know, and I say this about my own company as well as every other software company out there. We as software companies have a true responsibility to make it easy for our users to use. We have to mimic the usability of the consumer world. Okay, we have a lot of people out there in legal who have post traumatic stress from a past failed clm. I can tell you my dear friend Chris Coates at Oracle, she and I used to go in the early days of clockwork on the clock board. Anyone who said they had a new role in Legal Ops, we would say if someone tells you that CLM is your responsibility, go running for the hills. Why? Because they were all bound to fail. Why? Because adoption was so hard. Now I want to emphasize how much I think this has changed. Adoption in the past was difficult because the software was clunky and it took 15 extra steps for our users to get something done. Yes, we could house everything, we could find things, we could have a uniform process. But look, if someone used to do things an easy way and we're making it harder for them with 10 extra clicks, they're not going to use it. And therefore the adoption is really hard. The software companies today have changed and their responsibility, in my view, is to mimic the consumer world where you don't have to tell people about why this is important or why should they use it. I think that focus on the adoption is going to be the most important piece for you as you think about any tech project for success. So I'll tell you, at Google, when I was there putting in tech projects, we did not have any carrots or sticks, meaning we had no mandates to make people use anything. We rolled out. So if you launch something new, it was basically the onus was on my team to ensure that people wanted to come, wanted to use it. So I had two very simple principles to maximize user adoption. One, I think about things a lot of ways, you know, that we think about the consumer, phone, apps or experiences, whether you're Talking about Uber, DoorDash, Instacart, you know, Netflix, ChatGPT, whatever, you name it. You heard about all those things from a friend who told you, hey, chatgpt is pretty cool. Check it out. Instacart, really convenient. Check it out. There's no change management pitch, there's no email of directions, there's no training documentation, there's no. Here are the top five reasons I think you should log in today. Right? You just opened it up and you Thought, wow, that's great, I'm totally going to use this. And that's the reaction that I want to see from my internal users. I want to hear the I'm totally going to use this. And that again is where the software companies have to make their. That the easy part of the project, the people and the process part that we have to deal with for change management. And legal tech is already really hard enough. So let's make tech easy. So, okay, the principles are one. It has to be markedly easier and better than the old way. Okay, so maybe as I mentioned, you had an older system. Maybe people were really happy keeping templates on their desktops. They like to email them to their stakeholders. They have their own versions. Maybe your internal sales team or stakeholders were super happy to just ping their attorney because they know them by name and they get help from them and they don't want to get in a queue. They get a response from that person. Well, if you're asking someone to change their behavior, there has to be something in it for them. Remember we said wifm, wifm. What's in it for me? Well, it has to be better. It has to be less clicks, has to be more transparency. It has to have that. Oh, awesome. I. You mean I don't have to keep asking my attorney where things are because I can just see it here or you know, awesome. My sales team is not going to keep picking me all weekend because they can see where things are live or, you know, the best. Oh, wow. You mean I can just bypass legal altogether and execute contracts myself if I use this and I stay within their guardrails? That's great. I am looking for oh, awesome moments. And remember, I'm totally going to use this. That's what I want to hear. My other principle for adoption was the quote, if it needs training, it's right. Not only does it have to be better, it has to be easy to use. You need to get a large group of very busy people to take a training course. Not going to happen. I had thousands, tens of thousands of stakeholders. Not going to get them to sit down and do a training. They're too busy. So you need your new tool to be as intuitive as possible. People need to see it for the first time and their reaction should be, oh, I see how it works. I get it. It works as I would expect it to. Here we call that quote, walk up usable. Walk up usable. I can't tell you how many demos I gave my old teams at the law firm at Google where people could not figure out how to do simple things. The vendor response after I complained about that was do more training. Make quick hit videos. Make, you know, 15 second videos. Send those out regularly. Look, that is not going to happen. People are busy. They might interact with the system once a year. They're not going to get trained, they're not going to watch a video, they're not going to read their email. Okay. They cannot be expected to remember how to maneuver through a difficult system. That is why CLM failed in the past or difficult to use. I had people revolting in my demo sessions telling me there's no way they're going to use this clunky system. And we were just like still in design mode. So we had already lost them. You need it to be walkup usable. I'll share a quick story that I love about what it means to be walk up usable. We had a customer early on. When I had first started here at Ironclad, they were a traditional sort of old school company, not a tech company. In fact, they were city infrastructure. So think about the company or the organization that puts like, I don't know, pipes and sewer systems and drainage into under the roads and puts in infrastructure into our cities to make our cities function. Even though companies like this existed before I worked here. But this is kind of the fun thing about learning. They decided that they needed a CLM and they said, oh, we're really worried because our end users, they're like plumbers and general contractors and they don't work in, you know, their phones or on systems and computers all day. They're working with their hands. And so we're really worried that they're not going to be able to figure out how to request and execute a contract as our stakeholders. And what happened was they rolled it out and held their breath and were kind of ready for a lot of complaints. And we ended up getting a letter from the CEO, which I think is so cool because what CEO takes the time to write a thank you letter to a software vendor and basically said he had lost so much sleep worrying about the day that he turned on the system because people were not going to be able to figure out how to use it. And instead it was crickets. It was crickets because everything went so smoothly, opened it up, figured out exactly where to go to do what they needed to do and went on with their day. That is what we are looking for. That is what gets me excited. Another thing to think about as you're evaluating CLM and best practices is to consider the idea of leaving People where they want to work. Okay, you have a lot of stakeholders. Your stakeholders want to work in different ways. Everyone has their own way. This goes back again to why change management in the past was so hard. Because we were forcing people into new ways of working based on how the clunky software worked. You want now modern systems that can allow people to continue to work where they want to work. What I mean by that is sales teams. Sales teams love Salesforce. They live in Salesforce all day. If you tell them I want you to log out of Salesforce into the CLM to request your contract, into the CLM to see where it is, into the CLM to get the reporting, that is friction. I love to avoid friction as much as I can because friction, you know, hurts adoption and allows them to say no, I don't want to use it. I want to go back to my old way. When you remove the friction, you remove the ability for them to object to the new process. So again, leaving them when they where they want to work. Can your system integrate well with the systems where people want to work? Whether that is procurement in coupa or their procurement system, whether that is your salespeople in Salesforce, whether that is your finance people that want to work in tableau or some BI tool, you want to be able to extract that data for them. You want to pipe in data back and forth so that let's say your sales team is can initiate their contract in Salesforce. Never have to leave. They can see it was who it was assigned to. They can see where it is in the process. They can start to report on it. Everything that they need to know about requesting, following up, executing the contract is on their side in Salesforce. They don't have to leave. That's huge for them and that makes them happy. And when you create a better contracting process that allows them to do what they want to do again you are the hero. They are super happy. You made my process better. You made my life better. And that's always the goal.

Chapter 7 the Future of Contract Management and Artificial Intelligence Other things to be.

Thinking about as you evaluate the many vendors out there. Is it future proof? This is really important talking about how much and how quickly things have changed. Is this a modern and forward thinking vendor provider software company? Is it going to be around in 10 years and not just stick around but are they still going to be a leader in this space? AI is everywhere. Are they going to be at the forefront of AI and are they going to be a leader not just from let's just say like a market share perspective. But are they going to be continuing to innovate, to disrupt, to push organizations to modernize all the time and be a partner for you're going to want to continue to learn and grow together. Like I said, no software when you buy it is going to be perfect. We are not perfect. I have a lot of requests into our product team about how we can be better. That is a good thing because your companies, your vendors should be thinking about how to continue to innovate. Okay, we have AI. I'm going to touch on AI just for a moment here. Is AI part of the platform? If it is not already something that this vendor is thinking about in early 2024, I would be a little bit worried because the forward thinking providers should have already been ready to jump on this AI bandwagon if not having thought about it already for the past three years or so. So what are the AI components to be thinking about as you consider your contract's lifecycle? Well, there's a lot here, right? There's post signature AI. When we say post signature, that's stuff. That's for executed contracts. One of the things that most companies can do now is extract automatically out of executed contracts in your repository so you no longer have to go in and look for things and tag things. Can you leverage large language models to help you extract metadata from your post signature repository? Okay, pre signature. Pre signature means it hasn't been executed yet. You are intaking that contract. You are negotiating it. Okay, where does AI sit in the negotiating process? Do you have it automatically redlining? Can it look at your playbooks, your fallbacks, your approved clauses, and maybe even the history of your executed contracts and start to negotiate or flag things for you or draft new language for you lot? A lot of possibilities here that you should be thinking about. Can you apply AI over the entire life cycle? You don't want AI to just sit in one part of that lifecycle. You want it to be sitting in every part of that lifecycle. So in other words, can you ask IT questions? Can you start to inquire not just on one contract at a time, but everything that is both in flight and executed? That's where you start to get things really interesting going. And AI agents, this is the future. So you have regular generative AI. What are now known as AI agents are things that can leverage both large language model and generative AI, but also leverage tools to do things with that information. So you could ask things like show me a graph of my turnaround Time. Show me a chart that highlights the most highly negotiated clauses for things that are currently in flight. I don't know. Make it up. You should be able to ask questions about one or a handful of docs at a time. You know, you want to look at the entire body of contracts. So let's say, when does this one contract expire? Helpful somewhat, but doesn't save you as much time as if you say, can I ask the entire body of contracts to show me everything that's up for auto renewal in the next two months? That saves you a lot of time. Maybe you weren't even able to do that in the past. Can you ask it to make charts and graphs to show you data, like what's been Joe's turnaround time in a monthly chart for the last 24 months? Okay, what are the most highly negotiated clauses in the contracts that took over X days? What are the number of seats under contract this year? What is their average price? How did that vary over time? You can start to see that AI possibly can even replace some standard reports and metrics as you can start to query what you're looking for in real time. I think this is super exciting. Can systems do this all perfectly today? Definitely not, at least as of, you know, March 2024 as the time of this recording. But I think that's where the future is going. And again, the point is you want a future proof partner and vendor that is going to be able to stick around and be doing those cool things.

Mary's Guide to CLM Chapter six Getting ready to move into a new clm.

When you think about CLM readiness, do you have to be totally ready with all your templates and all your processes clean and ready to go nowadays? I say absolutely not. And I'll tell you a story. There are two huge behemoth enterprise, international, multinational companies, household names that you and I are both aware of that, you know, when we had talked to them in the beginning, said we would like to do a clm, but God, the idea of unifying our entire company across one CLM is laughable. We probably have 10 to 15 different CLMs within our company right now. I'm sure a lot of you are nodding, right? This is a very familiar story. This group uses that, this international team uses that. It's all different. It's completely fragmented. And on top of that, we don't even talk to each other. We don't work in the same way. We're not going to agree on the same processes. We work almost like 5, 10 different companies within one company umbrella. Okay, I agree. Scary impossible to get everyone under one clm. Well, again, going back to the challenges and the failures that I had. If you try to get all your stakeholders in a room and say, we have too many systems here, we have too many processes, let's try and get that to be uniform. What are your needs? What are your needs? Oh, God. It's going to take you years and years to get aligned. If you ever get aligned, the technology has changed. Like three years have passed and you've gotten nowhere near starting your rfp. So don't do that. Don't try and align the whole company. It's not going to happen. We like to try to do what is called land and expand. This is, again, bypassing CLM readiness in some ways and just proving the value of a new, improved system, showing the people the art of the possible and getting them to come around to want to change because they want to use the platform. So oftentimes you'll start with something nobody cares about, like the NDA. You won't find people fighting to work on it. You won't find people objecting to you experimenting with it, because why? They don't care about the language too much. They don't care about working on it. They want it to go away. Well, great. It's a great place to start. Sure, it's simple, it's not as complex as other use cases, but it's a great way to demonstrate, wow, you can make that work go away really easily. And wow, that system's pretty powerful and pretty cool. Our stakeholders really like it and they're asking if we can start using it for msa. DPA sows all these things and slowly you'll see people come to you and say, I want to get in line. Why are you not allowing that for my team? So they'll come to you instead of you having to push the system on them. So for these two enormous behemoth companies that I just mentioned earlier, where, like, the APAC team was certainly not talking to North America, was not talking to EMEA, and procurement had 10 different ways of doing things depending on what you're procuring, well, within two years, they were ready to roll out one single CLM across the entire enterprise because they launched in one place, expanded, and other teams started to see, wow, you've made life easier, your clients are happy. It's so much faster and better. I want that too. And the organic expansion within the organization is so much easier. It is so much faster. It is such a happier way to go that I highly recommend you think about that approach as you think about CLM for large enterprises and complex organizations. Easier on your stress and gray hairs, trust me.

Mary's Guide to CLM Chapter 7 How to Run the RFP look, there's a.

Lot of vendors, there's a lot of providers to evaluate. Going through an RFP process is a good idea, but you know, you don't want to be RFPing with like 27 different vendors, which I know a lot of you have and have shared your stories about how long it takes to go through and figure out what everyone does. Well, again, I urge you to get demos, get hands on, get pilots, talk to folks in the community about their experience, find companies that have similar use cases about what you're trying to do, see how they're using it. A word of caution on the P because many times, let's say this gets turned over to a procurement team or an IT team that is not necessarily understanding the needs of the business user and or the legal team. And what I have seen in RFPs generally is they ask a set of questions, they don't talk to the vendors and then they are going to move forward with some and eliminate others based on strictly the responses that come back in a spreadsheet. Well, there are companies that I have seen and talked to where their departments put forth questions that would be akin to saying I'm trying to procure a transportation mechanism and I would like to know if you can handle a minimum of two horses. And let's say the vendor is an automobile company and they do not use horses anymore because they have modernized and can do things better and faster and cheaper. And so they say, no, we cannot handle a minimum of two horses on our vehicle. And because of that response they are eliminated from the RFP process. And at the end of the day, you know, this department's gonna buy a software that can handle six horses, but instead they should have bought, you know, the car, the truck. So that's what I want you to think about. A real more concrete example that I've seen in real life with CLM is and I've seen this come up a couple times, so I kind of chuckle because it also came up in our Google family discussion when someone said, okay, we have to put on the RFP that it must handle this legal stamp and this is, you know, like an old school stamp looking like when you use a stamp pad and stamp it on a piece of paper. And we took that image and turned it into a JPEG and it's got to live on the contract during the approval process for signature or click to accept. And so can you manage that JPEG stamp image? And you know, many providers would say no and be eliminated from that process. When I dug into my own team and other teams and said, well, what is the deal with this stamp? Why is it so important? Because others, you know, best practices, I don't see most people using that stamp during the process. What does it indicate? Why is it important to you? And they would say, because it lets the signatory person know, the approver know that legal has reviewed it. Okay, well, with the new software there is transparency and it actually shows you who has reviewed and who has approved with very clearly saying legal has approved or security has approved or finance has reviewed. Doesn't that serve the same purpose? So again, where one would get eliminated from the RFP may have a new, modern and better solution. So you really just have to think about how are you asking the question, are you allowing for conversation with the vendor after submission of that spreadsheet so that you can really understand what they can and cannot do or what it means to say yes and no? Also careful that many will respond yes to everything because it can be customized. So sure you can do that, sure you can get that stamp, for example, it's going to cost you a lot of money and a lot of time and a lot of effort and is that going to be worth it to you? Those are things that, you know, as you do your rfp, I really want you to start thinking about chapter eight.

Ensuring long term success.

Okay, and finally, as we wrap up this long form podcast today, let's say you've launched, you are global, you have done the good work that we've talked through today and navigated the difficult landscape and the difficult change management and implementation of your system. What are your ongoing resources? What are your resourcing options? Well, if you've done your job correctly, before you embarked on the CLI journey, you made it clear that you don't just set it and forget it. Once you're live, you're going to need a continuing resource to maintain the system, to onboard, to make changes, to do those configurations, to add users, to add approvers, whatever it is. Like I said, contracts are a living, breathing organism that are constantly going to be undergoing new changes and needs. And maybe if you're landing, expanding, you're going to need new workflows built out and expansion to new teams and new stakeholders throughout your company. Okay, so let's say oftentimes It's Legal Ops who has led this project. And do you want that Legal Ops person to continue to be the person who is building and maintaining and administering the system? I would argue no. So can you get another resource internally to do that work? Because you want to free up that very strategic, wonderful project manager, strategic Legal Ops owner to go and work on the next initiative, the next big thing that's going to make an impact as big to your bottom line as the CLM project did. So if you can get a contracts system administrator in to work on this full time or part time, fantastic. That's great. But the good news is there are so many other options now for people who don't have the luxury of a full time headcount. Okay, there is flexible talent. You can hire someone to work on this part time as an extension of your team as a contractor. Managed services. This is actually my favorite option going forward. You can hire a managed service provider or let's say a partner of your vendor or even just a third party that can learn your system, learn what's special to your company and help be the company or be the resource that is ongoing that helps to build and maintain the system for you when what is great about that is that it, it eliminates the single point of failure and creates a sense of business continuity. You can engage with them for, I don't know, four hours a month, 10 hours a month, whatever you need, even full time, maybe even a team if you're so big to keep that engine going. And then Legal Ops people are highly coveted these days. They are moving around, they're getting job offers if they have any ironclad experience. So eliminate that single point of failure. Get some company and services provider in or somewhere that you can make sure that there is continuity if a person leaves your company. All right, Lot of resources, so many people who can help you. That's it on clm. Everything you've always wanted to know, but maybe we're afraid to ask. I'm sure there are things that I forgot to touch on that we could probably keep talking on. This is why people want me to write a book on this, but hopefully I've covered most of it. What did I forget? What else do you want to know? Hit me up, ping me on LinkedIn. Let's talk about it. Thanks so much for tuning in.