Modular services are great, until they aren't
I really enjoy tapas. I’ll go further and expand this to all “small plate” options at restaurants. Of course, the cuisine and actual dishes can be fantastic, but what I really like is the concept. You get to try a taste of many different things, don’t have to commit to just one entrée, and if one of the small plates isn’t that great, you aren’t stuck with it and conversely, if one of them is fantastic, it is socially acceptable to order another. Whereas if you order two steaks, there’s always judgment. But with small plates you can really go into the variety without all the commitment or rigidity of the Escoffier-based service structure most of us in the West grew up with at restaurants. This modular approach to dining is preferable for all the reasons I just described, but do you know where modular buying doesn’t work? Bicycles. What use, really, is a handlebar or set of pedals by themselves? More on that in a minute.
If you have read my blogs or seen my vlogs, you have probably heard the phrase, “contracts are touched by everyone, but owned by no one,” at least once (if not more). Now this lack of unified contract lifecycle ownerships leads to all sorts of bad things – value leakage, missed opportunities, poor data, poor communication due to too many handoffs, etc. What it also leads to is quirky buying habits when people are trying to solve the problems that arise from a fragmented lifecycle. When the legal team sees an issue, their instinct is to get a law firm to help. Procurement may go and buy a CLM (or try and use their procurement tool as a CLM – which has a 100% success rate). Side note: Why would you use a screwdriver to knock in a nail or a hammer to whack at a screw? They are different tools for different purposes! But I digress. When sales or the business see a problem in the contract lifecycle, they may get some consultants or even go and outsource in some fashion. Even though all these solutions – law firms, consultants, tools, outsourcers - all have their merits, they are being purchased in such a fragmented manner such that the outcome is often just re-creating the fragmentation which caused the problem in the first place. You wouldn’t go to one store to buy handlebars, another to purchase some wheels, a third for a chain and then a fourth for some pedals. You would simply go and buy a bicycle at a bicycle shop. Why can’t we get that sort of integrated solution for legal & contracts? No good reason, except it’s always been done that way.
Let’s take a look at some integrated offerings and why they are better. Now – there are some things which are obvious – at least to me and others who dabbled in BPO. Transform to Operate is the way the industry has been working for decades, but we think it’s magic in legal/contracts. Why would you take a broken, or inefficient, non-tech enabled process and send it to a different country? If a company is going to change the resourcing, then it should change the manner as well or its just pushing bad ideas to another set of people. Similarly, “ADM” or alternative delivery method is not really new. The idea of using paralegals has been there since stylus and papyrus days of legal. All “off-shoring” adds to this is the idea that smart people live in lots of countries and that if you are spending eight hours a day on Teams/Zoom calls, does it really matter where people live? Let’s look a little deeper and move beyond old ideas and really integrate different skills into solutions. What does that look like? Let’s look!
A hundred blogs have been written about simplifying contracts or getting to better contracts that work for not just lawyers, but the business. Always drives me crazy. First off – I knew how to read before I went to law school. Second – great work on getting to one common NDA, but how about NO NDA? Besides one very strange vaguely presidential litigation, do we have a lot of lawsuits on NDAs? Personal feelings aside, there is great work out there when you take a bit of tech, some consulting prowess and then legal expertise and look at what the right type of contract is. AI can identify patterns in what is actually the most common landing position, legal experts can make sure the GenAI is drafting something enforceable and not a hallucination and proper programme and change management can ensure adoption. These types of projects get to contracts that are usable for the business, ready for your fancy CLM tool and meet the criteria of legally enforceability. Traditional one-part solutions here would help a bit, but again, they would just echo the fragmentation in the process. We can do better.
Scale with legal insight
Outsourcing is awesome – when done right. Fun fact – I actually (briefly) worked in a call centre when I was in college. Gave me a flexible job, accomplished a necessary task at a good price point, and taught me a valuable skill about how to do customer service with grumpy people. To this day, I still enjoy asking, “have you tried turning it off and on again.” Now, outsourcing has moved on considerably in the last 30 years and the value is amazing. But in legal there is always the arcane limitation about “not practising law”. Of course, ONLY lawyers can read everyday contracts. I do love how all the online retailers demand you get legal representation before buying an airline ticket, service plan, take a loan, etc. Putting that aside, there are real times where IP, complex local law concepts, privacy, indemnity issues come up and that may be hard to playbook thoroughly. But what if the muscle and speed of outsourcing contract review was paired with an in-house legal escalation point by regulated lawyers? That would be different. That would avoid escalations back to the corporate and that would deliver a more end to end service that unites as opposed to magnifying the fragmentation.
CLM informed by practitioners
CLM tools have never been better and keep getting better – as tools. Stop me if you have heard this one before, but imagine this – company buys the latest and greatest CLM and then tries to hand to their Legal/Contracts team to use and the software vendor or “consultancy” who is helping to implement gives that Legal/Contracts team a group of IT, ITIL or Prosci change management experts who have never written a contract, chased an approval, done a change order, fought a contractual dispute, escalated a KPI issue or worked on a playbook to help teach these experienced Legal/Contracts folks how to use the tool that will solve all their problems over night. But their decks are really nice looking. How does this usually go? 100% adoption, right? OK – probably not or never. This is not to admonish any of the skills that I listed above, but to highlight that in a vacuum, without the practitioner view – both in legal and contracts – there is something lacking. Would you hire someone to teach you how build a house who has only read about house-building? Of course not. And yet – many a CLM implementation is being done by people just like that. We can do better.
In short, for enterprise challenges, you need an approach that is fuelled by an understanding of the enterprise, but also for contracts, the full lifecycle. To paraphrase Edmund Burke (or maybe John Stuart Mill, depending upon what you believe), bad contracting continues when good people do nothing. We all know better now. Let’s do something about it.
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