Contract Lifecycle Management (CLM) is a hot topic in legal departments today, regardless of size. While most in-house teams only go through CLM implementation cycles once or maybe twice in their careers, I lead CLM implementations for my clients every day (I’m not jealous, I promise).
These years of experience working on a wide variety of CLM implementations, however, have given me a litany of what works, what doesn’t and, most importantly, how to align expectations to make CLM implementations easier on all those involved.
Making a long process easier
Think about it, with all the CLM tools available in the market today – complete with fantastic AI capabilities - why is implementing CLM so painful? Well, think of it like a pregnancy.
Just like CLM implementation, no pregnancy experience is the same - even those who aren't first time parents will tell you how different their experience has been each time. With just one child, I am certainly no subject matter expert there, but after doing this for over 17 years now I can certainly call myself a CLM pundit. With each implementation, be it any industry, timeline or volume – there is always some pain and lessons learned but the result is a very happy addition to your life.
Here are some of the reasons CLM implementations become so painful and some tweaks you can make to reduce the stress.
- Decision makers for choosing the tool are not necessarily on the implementation team – CLM tools impact way more people in the organization than most teams appreciate. However, those making the buying decision are generally not the ones implementing the tool. This in and of itself is a reason for angst among the implementation teams, especially when the project manager is not part of the decision committee. A lot of time is then spent during the implementation phase asking questions such as, 'who decided to go with this tool', 'why did we choose this tool and not another tool', 'do they even understand our agreement types', ‘our process is so different and complex – how can a tool manage this?’ and many more such questions.
While not every decision can be taken by committee, it is important to have a very thorough handover by decision makers to implementation teams on the rationale behind choosing a particular tool. Sometimes the rationale is as simple as budget. However, let your teams know why you chose a tool and what should be expected from it. No tool will be a 100% fit, but if it can meet you at 75% - that can be defined as a success.
- What you see, may not be what you get - the functionalities showcased during the demo, may not work for your contracts/ business processes. It is very important to do the pre-work, even before starting to look at CLM tools available in the market. Often, organizations start looking at tools without understanding their own templates, processes, integration requirements etc. When they start conducting demos with the tools, they are just reacting to what the tech vendors want to show them, rather than leading the conversation with their requirements. Until you have a clear understanding of your own requirements, you are not going to be able to fully appreciate the functionalities showcased in a tool demo. Additionally, tech vendors will showcase all the bells and whistles during a sales demo, but when it does come down to negotiations, you may have to let go of some of the functionalities and features. It is very important for all stakeholders to understand what has been signed up for and align expectations.
- Unrealistic expectations from artificial intelligence (AI) tools – I am amazed at what humans are expecting AI tools to do! It almost feels like we want to come in to work, switch on our laptops and let AI do every task and piece of work we have been doing so far.
Let's be real, AI can help navigate our workday and make it a little easier. It is meant to free us from mundane tasks and maybe it has potential to do a lot more, but it is not there yet in the legal space. Today it can certainly be an enabler, but even Harry Potter needed to learn basic magic before defeating Voldemort (Spoiler alert!). Understanding what artificial intelligence can do and sharing it with the rest of the organization is very important for the implementation team. I have been in the middle of a number of conversations where CLM users expect AI to do magic, such as: - 'Can the tool not pick the template we agreed with the client which is attached to my legacy contract in the exhibit?' Well, the answer is -no! It hasn’t been programmed at this stage. It can only build contracts from your own templates or let you upload a third-party template.
- 'Can it pull all the legacy contracts and documents that I have with the counterparty and plug it as a table in my contract?' – Again, the answer is - no! Because you don’t have all your legacy contracts in this tool yet and you are not integrating with the legacy system you have. Automated tabular data creation and insertion into the negotiated template is not a feature present in most tools. It would be nice to have, we can put it on the wish list. Could it be part of the next release? We don’t know, we need to give the developers time to figure this one out.
- Underestimating the effort required at the clients end to ensure they are ready for CLM – For CLM to work, you have to do the work. Tech vendors and consultants are all there to support to you, but these are your processes and your work environment. None of us know your organization better than you. When you are starting your CLM journey, you need to recognize and plan for the effort required at your end, including the number of resources needed to be ready to start on your CLM journey. Your teams will need to treat this as a special project while doing their day jobs. It does seem overwhelming especially during certain phases of the implementation – such as design workshops, UATs, initial launch, training etc. It would help to prepare people in advance with sufficient notice on when they can expect the surge.
Also, if you know that particular times are busy for your teams such as end of month or quarter – then don't schedule your workshops around those times. To top that, teams discussing the SOW include stringent timelines not taking into account the effort required and pushing teams to work on weekends and after hours to meet the timelines. Project managers/ leads assigned to the implementations are generally not the end user of the tool and the reality is that most of them want to stick to timelines so that the project is launched on time, but do not necessarily focus on user adoption needs. Implementation is only a pit stop in that journey; adoption is what truly defines success.
- Lack of CLM readiness prior to implementation – At the risk of repeating myself, I think this is the biggest factor leading to implementation teams being so overwhelmed. Organizations are not ready to implement CLM tools which are complex and require a lot of inputs from various stakeholders, however they still license a tool, without doing the homework.
So, what should you do to get started? - Understand your contracts – what are the types of agreements? How many contracts do you have? Are they located in a central repository?
- Do you have standardized and harmonized templates for all types of contracts? Are they updated at a defined frequency?
- What are the existing tools in your organization – SFDC, E-Signature, Workflow automation tools, existing CLM etc.
- Who is working on what type of contracts? Do you have contract managers or paralegals managing the simple or medium complexity agreements?
- Do you have a defined escalation matrix?
- Do you have playbooks with fall back positions and approval mechanisms documented?
- Do you know what metadata you want tracked from a contract?
- Always keep additional time and budget aside for timeline delays, scope expansion and integration challenges, especially with niche legacy tools or homegrown tools where the vendor has no previous integration experience and onboarding additional resources for support.
- Don’t be overly ambitious and try to do everything in one go. Even Lord of the Rings had to be made in three parts or it would have been too long to read! Break it into small meaningful phases.
- Don’t underestimate change management – this one is for another article altogether!
I can go on and on about all the things you need to set yourself up for a successful implementation journey, but that would be a thesis. What I can tell you is that with meticulous planning, discipline and taking one step after the other, you can implement a CLM tool efficiently. Being ready up front will help your teams go through this in a much more seamless way. It will also help you define your scope better and not allow for scope creep.
