How can a Legal department generate the best results at the lowest possible cost to the company? This question reflects the so-called “more for less challenge”, which corporate lawyers have been increasingly called upon to respond.
Attempting to do so, a growing number of businesses invest in the area of Legal Operations, or Legal Ops. A research conducted by Gartner found that between 2018 and 2020, there was a 76% increase in the number of Legal departments that hired Legal Operations managers.
According to the Consortium of Corporate Legal Operations - CLOC, these managers are expected to have some essential skills, which include the use of technology, strategic planning, project and knowledge management, intelligence generation, among others. These qualities are the tools companies need to face the challenge mentioned above.
If the idea of Legal Operations is to apply these skills and other business management practices to the Legal department, with the objective of making the services provided by this sector more efficient, a Contract Lifecycle Management - CLM software is a powerful ally.
As you will see in this text, the business strategy of a Legal Ops that does not have a good CLM system is incomplete, missing the opportunity to implement the best practices listed by CLOC with as much success as possible.
The advantages of CLM as a management tool for Legal Ops
The purpose of a Contract Lifecycle Management system is to include all stages of the contract’s lifecycle, from request to execution, in a single platform. In doing so, they seek to efficiently engage, in the same workflow, each agent or department involved in carrying out that deal, including the Legal sector.
Thus, the internal articulations, between the members of the legal area, and external, between the department and the other sections of the company, can be fully managed within this tool.
Some of the main advantages of a CLM software to a Legal Ops are:
- More efficiency in workflow planning
- Greater visibility into each step of the flow
- Security regarding the documents’ content
- Data and intelligence
Learn more about each of these advantages bellow.
1. More efficiency in workflow planning
A CLM software enhances the possibilities for planning and standardizing the sector's activities, which is one of the core competencies of a Legal Ops, according to CLOC.
Considering that all workflows in the area will be programmed in the system, the manager can allocate available resources as efficiently as possible. This means, for example, that it is viable to:
- Assign in advance tasks such as preparation, review and approval for each type of document, providing predictability and standardization to workflows;
- Predetermine, via a questionnaire, what information the users must fill in to support subsequent activities, with no need to return to initial steps for data completion;
- Establish deadlines, which makes it possible to anticipate the average time required for the full development of that specific workflow;
Moreover, understanding that in reality it is sometimes necessary to change some of the programmed flows, a good CLM system leaves room for adaptations by users, who are able to:
- Change the employee responsible for the activity, allowing collaboration in a specific document;
- Request a change in the deadline, for cases in which the complexity of the issue requires more time, or in which the urgency of the situation demands a reduction in the SLA;
2. Greater visibility into each step of the flow
A Legal Operations manager needs not only to be able to plan each workflow in abstract, but also to monitor the execution of each step to ensure that the anticipated efficiency is being fulfilled.
A CLM software provides this level of visibility to the administrator, with information such as:
- In which stage the workflow is;
- Who is responsible for that specific step;
- What is the deadline for the execution of that task;
- If it was necessary to obtain some additional information, reversing the original flow; and others;
Based on this information, it is possible to perceive operational bottlenecks, such as the lack of collaborators in a certain stage of the workflow, or the insufficiency of a deadline granted for a specific activity.
Upon reaching these conclusions, it is possible to modify the previously structured plan, or even request additions to the team. This is all based on data extracted from the platform.
3. Security regarding the documents’ content
Knowledge management is one of the core competencies of a Legal Operations according to CLOC. This task involves the compilation and structuring of all the content produced by the Legal department.
Without this specific attention, the company loses the opportunity to ensure that all documents prepared contain the best and most updated versions of all relevant clauses. This ranges from provisions that allocate specific responsibilities to compliance rules that are part of company policy.
It is possible to reverse this loss with a good CLM software, which is a powerful knowledge management tool that allows:
- Prohibition of any modification of the text: other areas of the company, or even the counterparty in an negotiation, can only enter information in the document via questionnaire, not being allowed to modify contractual clauses; or
- Authorization to modify the text: it is possible to suggest changes, but always with the automatic marking of the excerpt in question. The contract can then return, on a mandatory basis, for review by the Legal department.
Security regarding the content of the documents produced, resulting from greater control over changes, implies the following gains:
- Risk reduction: all contracts will have the necessary clauses for the allocation of liability and compliance with company policies and other applicable rules;
- Reduction of the time to review the document: if there is no doubt as to the presence of the necessary clauses, it is possible to concentrate the review to other points of the contract, or even dispense with this step for simpler agreements.
4. Generate data and intelligence
Data-informed decision-making is also one of the core competencies of a Legal Ops, as understood by CLOC.
When each of the steps in a contract’s life cycle is inserted into a single platform, with fully automated workflows, it becomes possible to generate intelligence to manage all these processes.
- Some of the data that can be extracted include:
- Compliance with deadlines by each employee or area;
- The number of documents produced by each employee or area;
- The types of documents produced most frequently;
- The areas that request documents most frequently; and others.
Based on this information, the Legal Ops manager can not only plan interventions aimed at promoting greater efficiency, but also can demonstrate, with greater clarity, the dynamic of the Legal sector.
The future of Legal departments: technical and operational excellence
The very premise of Legal Operations, to manage Legal departments from a business perspective, has, in itself, seismic effects on legal practice within companies.
Although a trusted corporate lawyer, who knows the business in depth, is still considered a valuable asset of the company, it is increasingly clear that technical excellence is not enough to guarantee the legal area the recognition and resources it needs. It is essential to also develop operational excellence.
This quality is promoted by the adoption of good CLM software, which allows for more efficiency in the planning of workflows, gives visibility to the development of each stage of this flow, providing security as to the content of the documents produced and enabling the generation of intelligence.
Thus, the Legal department need no longer be seen as a cost sector, or as the “black box” within which all the company's commercial transactions are carried out, to realize its strategic potential for risk reduction.
netLex: make your deals simple and secure
netLex is a company specialized in document automation and management. Our main objective is to make agreements simple and secure, promoting the optimization of tasks throughout the life cycle of documents, such as: contracts, powers of attorney, corporate acts, among others. With our proprietary CLM platform, it is possible to program intelligent workflows to provide accuracy and quality to company documents, thus ensuring that all information is provided automatically and in a structured manner.
Our system is currently available in 11 languages and is in operation within Fortune 500 and Valor 1000 companies, with users in over 20 countries around the world.
To see in practice how our technology can be applied to the Legal Operations sector, come and meet netLex.
