In this video Sinead Garnett, Johnson Hana’s Managing Director of Legal Operations and Solutions, discusses what Contract Lifecycle Management is, how a well-managed process can be of benefit, and how improvements can be made.

The article below is a broad transcription of the video above.

Question one: What is Contract Lifecycle Management?

In essence, Contract Lifecycle Management (CLM) is really just the process of managing and tracking your contracts as they move through the organization.

This includes all the stages they go through from:

  • Contract Creation
  • Negotiation
  • Approval
  • Execution
  • Storage
  • Managing and tracking contractual terms (for the duration of the contract).

A common misconception is that the phrase “CLM” is discussing software, and while there are some great technology tools that can be used, it is a much broader discipline. One that takes in the entire lifecycle of contracts as they move through the organization.

Question two: Where to begin – How do you tackle CLM improvements?

The guiding mentality here should be: “keep it simple”. When we have initial discussions with companies, they often don’t really know where to begin, and are therefore unsure of how to go about making improvements.

Therefore the first step should simply be to map out the existing contract lifecycle. This should include the stops on the contract’s journey through the organisation.

This will take into account: all the people, all the internal stakeholders who touch on the contract as it gets created, negotiated, and approved. It’s any technology systems that it touches as it moves through those stages, and any processes in place already, or policies or procedures.

Additionally, you’re likely to find that you may need to have a different map for different categories of contract. For example, your sales contracts are likely to move through a different process than your employment contracts, or your supplier contracts.

Question three: The next step – How do you identify pain points?

The next step, after you’ve mapped out your CLM for each of your contract categories, is to identify your critical pain points. (i.e. What are the issues that arise in those journeys?)

A key point to note here is that you must engage other stakeholders when identifying these pain points as they will have visibility of issues that the legal team may miss.

Of course, the legal department will have a very good view of any issues arising in the contracting processes, but it’s really important, in order to understand the business impact of any issues, that other stakeholders in the organization are part of that conversation as well.

So, for example, the legal departments may know that they’re not getting through contracts quickly enough, they’re overloaded with the volume. But the sales department may really understand that the impact of that delay, is an extended sales cycle and a delay to revenue coming into the business, which is obviously a big business issue.

Question four: Building the process – How do you make improvements?

After you’ve identified your key pain points, the next step is to brainstorm how you can begin to make improvements.

Again, it’s very important to “keep it simple” here, and – to reiterate – the solutions need not necessarily be technology based. They could be people based, or they could involve manual processes, or different policies or, yes, of course, there may be technology improvements you can make to bring efficiencies to parts of the process.

Therefore, the starting point for each pain is working out: What can we do to make this better? And then also to start setting measurements of success for those improvements.

The key here is to be able to gauge whether the improvement has been effective. What KPIs will you be able to track? For example, if it is the sales cycle, will the KPI be the duration of the sales cycle, will the improvements made be able to bring that time down? To take another example the success measure could be employment satisfaction surveys: i.e. are the lawyers happier, are the sales department happier?

It is vital to agree these measures upfront, in order to bring a rigor to the process, and then ensure that these measures are tracked, so quantify success.

Question five: CLM Technology – Where do you start?

While, as stated above, CLM improvements need not necessarily include technology solutions, if you have decided to automate parts of the process, where should you start?

Well, the first step is to understand that there’s a really wide variety of CLM tools out there, and that they tend to be more geared toward different stages of the contract journey.

So, for example, some will be very focused on contract generation. Some may be geared more toward the end of the spectrum at storage, contract analytics, or measuring contractual terms.

If you’ve done the preparatory work of really understanding your CLM (i.e. your individual CLM mapping, and where your pain points are) then you should have a good idea of where technology can be deployed to create the most value for the organisation.

When you have evaluated and selected a vendor the really important things, internally, to ensure successful implementation are making sure that it’s going to integrate with your other existing technology tools.

Of course, any organisation will have an existing technology infrastructure, and whatever CLM tool you’re bringing in is going to need to fit within that, and work really well with the other relevant tools.

Another key tip here is to ensure you have an internal champion, who is going to really own responsibility for the deployment, and make sure that it’s implemented successfully. And then finally, I would say, make sure you have your business case built out. It’s likely you’ll need to go to finance or the CFO for approval of any new technology spend. And to make sure that you can get that spend approved, you want to have thought through some of those business impact issues so that you can identify the quantum of value which will be created for the business (or indeed risk mitigated) for the business by implementing the tool that you’re recommending.

So while we may be heading into uncertain times more broadly, the future looks very bright for Johnson Hana and our clients.


About Johnson Hana

Johnson Hana is Ireland’s leading alternative legal solutions provider. That means we disaggregate legal advisory and legal process work, and focus on the latter.

We offer:

Legal Process Outsourcing – whereby a specific legal process is carved out and outsourced to us

Legal Process Secondments – to augment a busy legal team or fulfil a temporary requirement for an experienced legal professional.

Historically, legal advisory and legal process work were tackled and billed in the same way. This means that all legal work has been as costly and time consuming as legal advice.

It doesn’t need to be.

We deliver legal process work through a combination of innovative legal technologies, robust project management methodologies, and expert lawyers. This approach reduces client legal spend by over 50%, while also providing totally transparent reporting and billing. This leaves our clients free to focus on the strategic, advisory work that really adds value.

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