Today I attended the Association of Corporate Counsel (ACC) Annual Meeting in Los Angeles, CA. The conference is the world’s largest gathering of the in-house counsel community, and is widely attended because of the professional value it offers.
The day kicked off with a session called, “Contract Management Systems: Starting from Scratch,” and it was exciting to see over 200 people in the audience. This great showing, combined with the fact that we had dozens of attendees stop at our booth to ask us about our contract management solution the day before, proved to me that contract management software is a hot topic with in-house counsels.
At this first session, the experienced panel included:
- Rhonda Lees, Vice President, Legal Affairs, American Diabetes Association
- Christian Ortego, Senior Counsel, Huntington Ingalls Industries, Inc.
- William (Bill) Karazsia, Assistant General Counsel, National Student Clearinghouse
- Corrine Taylor, Legal Counsel, The Joint Commission
Below, I’ve listed out some key takeaways from “Contract Management Systems: Starting from Scratch.” If you are looking to implement a contract management solution, these tips will help you ensure your project is a success.
Lesson 1: Contract Management System Goals
Corrine suggested, “Develop your own vision that reflects your priorities and goals” before you start any contract management initiative. An example vision could be:
A system with the ability to build, review, execute and maintain contracts in an electronic format that checks for approvals and compliance, allows for exceptions, reports out on any field and can scale up or down.
Lesson 2: Understand Your Contract Management Needs
Bill shared the importance of understanding and charting your processes to help identify your ideal solution.
National Student Clearinghouse Process: Request -> Approve -> Sign -> Manage,
with a nonstandard path allowing for Draft Contract -> Negotiate
Rhonda suggested creating a mind map of everything that might be in your process, and then using this mind map to create a diagram like the one above. Putting your process on paper now will ensure you don’t miss anything when creating your system requirements later.
Lesson 3: Understand Contract Management Systems Benefits and Pitfalls
The panel all agreed that speaking with peers is the best way to understand what different software vendors offer, the benefits and pitfalls of various approaches, key implementation takeaways, and tips for effective change management. They also agreed that resources from different vendors (here are Apttus resources) and materials from the ACC are extremely useful in the selection process.
Lesson 4: Create the Right Project Management Team
The panel recommended putting together a team that will manage responsibility for the decision and implementation. This project team should gather all needs from various stakeholders, define requirements, create the process and work flow, and make sure the system can address the pain points that need to be solved.
Corrine mentioned that it’s important to have representatives from every team that uses, implements, or supports the system, because they will be more supportive of the solution if they helped select it. An ideal team could include IT, business development, compliance, finance, legal, and sourcing or purchasing.
Lesson 5: Cloud-Based Contract Management Solutions versus Hosted Solutions
One attendee asked about cloud-based contract management solutions versus hosted solutions. The panel suggested that the attendees work with their IT teams to decide which is best for their organization.
Corrine shared that hosted systems present some unique challenges. For example, patches or changes run the risk of breaking the system, and if the legal team isn’t IT’s top priority, it could be tough to get the resources needed to keep things running effectively. There could also be more system downtime if there is an issue. Because, of this, cloud based solutions may be an easier path to take. However, Rhonda also suggested you look at your other tools before making a decision, as you will want to select a tool that can easily integrate with the systems already in place. (So if you are hosting everything else, maybe hosting is the way to go.)
Lesson 6: Interview the Team
The group suggested that interviews should be used when selecting a contract management process and solution. Interviews should include the end users who will send the contract out as well as the power users of the legal services group (legal ops, paralegals, etc.)
Sample questions for the interview could include:
- What is the process for contract review, including who can submit?
- When is a contract required?
- Which provisions must be included?
- Who negotiates T’s and C’s?
- Who can sign off?
- What is a routine situation and what requires additional review or analysis?
- What works? What doesn’t?
Lesson 7: Understand Contract Management System Barriers and Pain Points
Take time to understand external barriers, like a change-resistant corporate culture, compliance challenges, competing databases, or even the internal perceptions of legal. Members of the panel said that getting users off of Word or Excel was a particular challenge. This was interesting to me because this is the exact reason Apttus offers contract management solutions that users can access from Microsoft Office. Attorneys and other users can remain inside familiar Microsoft Office applications including Word with all activity in documents and Outlook preserved and controlled by the Salesforce CRM application.& Apttus X-Author Contracts allows for the creation and negotiation of contracts using Microsoft Office, but with real-time access to clause libraries, approved language, and other policy controls centralized inside Salesforce.
Lesson 8: Consider the CRM integration
One of the attendees asked the panel if it was important to implement a contract management solution with the customer relationship management (CRM) system in mind, specifically mentioning Salesforce.com. The panel didn’t speak much to this, other than offering that vendors presenting at the event work with Salesforce (Apttus is one of them! Visit us at Booth 103!) As the leader in contract management for Salesforce users, and a solution built inside Salesforce.com, Apttus can provide you with additional rich information on this topic.
Lesson 9: Think about Privacy and Security
Bill suggested we consider both privacy and security when selecting a solution, and recommended IT and legal work together to implement a solution that’s going to fully meet the needs and requirements of the organization.
Lesson 10: Review and Analyze All the Information You’ve Gathered
Christian suggested that the contract management taskforce should analyze all of the information gathered during the process before making a decision. This includes:
- Reviewing policies and procedures, including rules, standards, and exceptions
- Reviewing and diagraming current methods and workarounds
- Considering solutions, such as enhanced processes, and weighing the pros and cons of an internal database system versus a dedicated vendor
Lesson 11: Define What You Need
Finally, the team suggested that we take the following into account when selecting a solution:
- How many licenses will you need?
- Will there be one central administrator or will everybody have access? Should they?
- Consider tiers for those that may need a license and who should have access to what
- Define who is a “must have” or a “nice to have”
- How any legacy records should be migrated?
Once you know your requirements, you can create a document that defines what to look for in a contract management solution. As you start to look at vendors, Rhonda suggested that you ask for references and even do system pilots. She advised us to understand the expertise of the vendor, as it is risky to be a beta tester for a small or new solution.
If you’re off and running, how do you take it to the next level?
There was much more offered during this session that I couldn’t capture in my notes, including some great information around performance metrics and reporting results to the organization. If you’re seriously considering contract management, I highly encourage you to seek out the session recording or slides, as well as connect with the panel members. It was a great session to start my day at this year’s ACC annual conference, and I’m looking forward to what else might be in store!
What sessions did you attend at this year’s event? Were they as information packed as this one? Any other sessions you recommend I attend? Share your thoughts below.