By Angus Chudleigh, VP, Commercial, ThoughtRiver
2020 will come to be known as the year synonymous with ‘digital transformation,’ with Google Trends having seen a steady rise of online searches for the term in recent years. With the challenges that COVID-19 has thrown at us, businesses have leveraged technology, firstly as a survival strategy and subsequently to become more agile, adaptable, and successful in 2021 and beyond.
Whether used to describe the implementation of video conferencing tech, or for remote working tools, digital transformation has evolved to mean a lot, which can be daunting for teams looking to get started. Whilst upgrading technology within a business in any form is great to see, when it comes to legal departments it is key that logical steps are taken to help general counsels (GCs) achieve their future visions and provide strategic value to the business.
The Sensible Approach
New, intuitive developments are shining the light at the end of the post-pandemic tunnel. Whilst COVID-19 has most definitely accelerated the use of a vast range of technologies including cloud and video conferencing, there are still some key steps for companies to make in order to digitally transform their legal departments.
Digitising contracts and making them easily accessible online, will be a core focus for companies in 2021. By streamlining this process, teams are able to search quickly and efficiently to locate similar clauses in order to use them again when needed. While pre-contract review software and tools that enable data extraction can lead to proactively improving key business decisions, neither are possible without the initial digitising of contracts in the first place. Companies will need to follow this approach in order to make a real difference to their traditional processes.
Once digitised, legal teams can make full use of other software available to them and implement steps to further their digital transformation projects. This is because 2020 cannot be seen as an anomaly in the journey to a digital future. It must serve as an inflexion point for the legal industry to place technology at the core of key processes such as negotiating and signing contracts. Doing so will not only help close more deals in the immediate term but will future proof any business or department against long-term macroeconomic changes and trends.
Doing anything else would be remiss. Technology will be key to maximising the full value of any deal. Without it, any organisations wishing to improve, its level of deal velocity will find doing so difficult to achieve.
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Deal Velocity in Action
With digital contracts at the fingertips of legal teams, automated contract review is the next step in the process of digital transformation. In order to maximise deal velocity, this can lessen the monotonous and time-consuming human aspects of the review. This improves the time taken between sales submitting a contract for review, and the lawyer returning it completed.
Having digitised contracts and automated the initial review process, legal departments can begin to implement software that enables data extraction proactively improving key business decisions, as well as the ability to surface commercial data. In turn, these are not missed by sales and procurement teams and help to inform entire businesses more effectively. Finally, simple to use workflow systems can make the entire lifecycle more transparent. These manageable steps, once actioned, will help legal departments to digitally transform.
The Bottom Line
The future vision for any GC being to increase the strategic value of their legal team’s contribution to the business and escape the low-value contract management that so often monopolises lawyers’ valuable time. New research has revealed that 80% of CLOs now report to their chief executive while 76% attend board meetings and 73% are almost always engaged by their executive leadership team on business decisions. Technology is one of the reasons that individuals in these roles are now taking centre stage, countering the notion that legal departments merely offer a service of contract reviewing and justifying their permanent seat at the executive table.
While this vision is not yet a reality, there is scope for it to become one. Data and integrated technology need to be embedded into the working processes of lawyers in order to enable them to do their jobs efficiently. This issue around data usage is just a drop in the ocean when it comes to the challenges GCs face at the moment, with contract storage and a lack of automation also being pressing issues. It is no secret that the adoption of technology is an ongoing challenge for many GCs, and if budgets remain fixed and workloads continue to increase, legal teams will be left with no option but to continue with the traditional process for reviewing contracts, leaving very little time, if any, for more strategic work to be considered.
Ultimately, to drive the conversation forward around digital transformation, it is important to articulate not only the vision, but the issues and pain points too. It is crucial that despite the norm having been accepted for decades, we begin to update and change processes. The lack of visibility of obligations within live contracts, and an inability to extract data, alongside a lack of automation and complex workflow processes, means that these inefficiencies do not just take time. The bottom line is that they will ultimately cost businesses revenue.
As we enter the new year, the increased efficiencies afforded by such new and innovative technologies will become increasingly valuable. Automating the contract review lifecycle and implementing digital platforms is the first step towards a sensible and achievable vision of digital transformation in any legal department.