Has the business world reached the tipping point for contract lifecycle management (CLM) adoption in the enterprise? If so, what does this mean for the enterprise and in-house legal teams? To gain an insight Digital Journal caught up with Andy Wishart, Contract Lifecycle Management Futurist and Agiloft’s Chief Product Officer.
Wishart is a widely recognized industry expert in developing contract management software and AI to enhance lawyer productivity through smart and easy-to-use solutions.
Wishart outlines six enterprise contract trends for how legal automation is altering the face of contract management worldwide.
General Counsels that Embrace the Cyborg Rise to the Top
Wishart: It’s happened to other leadership professions. The best digital hunter wins, and CROs and CMOs who don’t have a world-class tech stack to hunt, nurture, track, and analyze every step of their prospects’ journey from cold to sold, will lose out to the competition. They must have the appetite to understand deeply how the tech can deliver value for their business and fight for the right budgets and resources, or they simply can no longer hold these roles.
The same is true for General Counsels, as they drive priorities for their organizations. As automation has swept through operations, sales, marketing, and other critical functions, legal is one of the last bastions to be automated—and the age and expectation of instant visibility into a corporation’s risk and contractual obligations has dawned.
Legal pros who fail to push for and embrace digital transformation, which has accelerated from years to months in the pandemic, are in existential peril in their roles. The legal leaders who ‘embrace the cyborg’ and bring their legal prowess together with the efficiency and intelligence of today’s legal automation solutions are the only leaders who will advance in today’s market.
Companies with “Tweet Shift” Contract Nimbleness Win the Market
Wishart: We’ve just navigated through the worst of a pandemic, which still lingers and continues to shape business practices worldwide. We are all watching the devastating situation in the Ukraine. We’ve just watched the world’s richest person buy a major corporation in a matter of days.
And in all those situations, organizations have been in a mad scramble to adjust—to survive, to manage risk, to cancel contracts, to shift regions, to add new suppliers, to understand ramifications, and be instantly nimble. In a single tweet, markets can change, unrest can happen, and nimbleness and agility has taken on a new dimension. In 2022, your business needs to be able to shift on a tweet.
Bad Contract Processes Sink NPS Scores
Wishart: Insider info says one major corporation had a negative NPS, which was bad enough—but an estimated 10 points of that was driven by a burdensome, frustrating, non-automated contract process that created a poor customer experience. Essentially no one can do business with anyone without a contract. And nearly all corporations are judged by their NPS score—customers choose vendors by them; investors make investments based on them. If your contract process is not streamlined, simplified, and world-class, you’re behind before you even get started and your NPS scores will show it. Contracts truly are the DNA upon which your relationships with customers are built.
Recent results of global enterprise study show awareness of the criticality of CLM to customer satisfaction is indeed, on the rise, with improving customer satisfaction and ease of doing business coming as a top 5 strategic priority for CLM.
Legal Tech Efficiencies Fill Revenue Gap Caused by Slowing Global Growth
Wishart: Global forces like the pandemic, war, supply bottlenecks, and inflation are expected to decelerate global growth from 5.5% to 4.1% in 2022, according to the World Bank. While challenging, as companies look to not only survive but thrive in challenging headwinds, legal teams can confidently turn to the power of automation to enhance their ability to improve productivity in managing contracts. According to World Commerce & Contracting, companies using CLM could save an average of 9.2% a year in annual revenue that is typically lost to slow negotiations and missed milestones. And for larger organizations, that percentage is often 15%.
The hunger for revenue protection for legal teams is gaining ground. In a global study of enterprise buyers on CLM, 65% of respondents are focused on improving productivity as a key driver in purchasing CLM solutions to increase productivity and stop revenue leaks.
Legal Tech Pros Take on Unicorn Status
Wishart: Ten years ago, hiring a Salesforce administrator was nearly impossible. Employees who could optimize what had quickly become the system of record for companies worldwide were some of the hottest tickets in the market. With the advent of marketing automation and account-based marketing (ABM) tools, demand generation pros have become the new corporate darlings, drawing multiple offers and soaring salaries as the market scrambles to source from a talent base that is growing, but still small given these technologies have literally exploded on the scene.
That heat is moving to legal ops. As with any technology that has the potential to transform a profession, ensuring you’re building and sourcing the right talent is key to your digital transformation, along with having the resources and talent to really put it to work for you—and to date, many don’t and are at risk. In 2021, Deloitte’s State of Legal Operations Survey found that only 35% of legal teams believe they have good tech skills.
Integrations that can Sluice Data Through Your Organization Win
Wishart: Data, when it’s trapped in your contracts and in file cabinets, holds unbelievable value for your organization. Having a line of sight to risk and business obligations lets you and every function in your business make better, more nimble business decisions that help companies grow, sending resources in new directions and holding back in others. The trouble is, without a CLM to unlock that data, and more important, be able to share that data with other solutions in its network ecosystem, it’s difficult to actually put that information into action. That’s why, like trapped water, CLM systems that can integrate not only seamlessly but widely with today’s common enterprise solutions and let data sluice easily into other technologies are the most powerful. Sure, integration speed is important—but that’s table stakes. Today’s most powerful CLMs need to connect hundreds, not handfuls of systems, and easily let data flow throughout the organization where it can truly help the business grow.