We all know that contracts make the world go round. They’re the ball bearings that keep the machine of modern life in motion.
At the same time, contracts are also “the most intimidating part of doing business with someone,” as Dan Dalzotto, the co-founder of CLM frontrunner Outlaw, puts it.
As it now stands, most contracts are overwhelming, confusing, and unwieldy. The language they use is often complex and obtuse, legible only to a chosen few. They hold up the deal-making process, foster misunderstanding, and leave parties with the fear of hidden clauses that could hurt them.
But a new wave of Contract Lifecycle Management is built on the premise that contracts don’t have to be terrible. New CLM leaders believe that contracts should be a tool to build connection and nurture trust, rather than erode it.
That vision, combined with friendly tech, is forever changing the work of corporate counsel.
The 6 Paradigm Shifts of Modern CLM
1. Transform static documents into flexible, living entities.
One reason contracts are dreaded is that organizations try to create one rigid, boilerplate document that can cover all possible interactions. In any particular deal, much of that language might not be necessary, but it’s all thrown in there anyway.
When a contract is a static document, it immediately becomes unwieldy. But new technology gives contracts room to change and grow, respond to input and new negotiations, and transform into tailor-made agreements that best address the concerns of each party.
With dynamic templates using conditional logic, you can build flexibility and customization into the process, even as you reduce your template count.
2. Break complexity into discrete parts
There’s a reason only 1% of people actually read tech user agreements. All that small-print is overwhelming. As legal departments seek to protect their organization against a host of potential risks, contracts grow in length and complexity. We can’t just agree to a vague mandate to “play nice.”
This is where technology can help. Just as a software program can be broken into discrete units of code, contracts are being decoded into structured bits of data.
When we break each agreement into discrete parts, it can be generated and customized more quickly. It also makes it much easier for each party to understand their commitments, foresee where disagreements may arise, and make adjustments that address everyone’s needs.
3. Foster trust with plain language
That clunky boilerplate language present in many contracts is trying to be specific enough to provide protection from each risk, while being vague enough to fit every situation.
The problem is: it isn’t actually working. Take the issue of the pervasive legalese term “and/or.” Rather than supplying specificity, it often introduces new levels of confusion and ambiguity. When and/or comes to court, judges grow annoyed. One labeled it a “conjunctive-disjunctive crutch of sloppy thinkers.” Another called it a “Janus-faced verbal monstrosity.”
Plain language is a growing trend in legal circles. And with the new generation of CLM, it’s making inroads into contracts as well.
Plain language in the contract process increases trust and facilitates collaboration and cooperation. As technology helps make contracts more digestible and transparent, plain language is supplanting inaccessible, vague legalese.
4. Use tech to enhance transparency
Watch CSPAN enough and you’ll see someone trying to sneak controversial language into a massive “must-pass” bill. You think they’ve passed a farm bill, but come to find it also hands over a couple billion more to Space Force.
Sneaky language and hidden clauses are a risk with all agreements. That’s why so many professionals spend so much time pouring over the minutiae of every contract draft. But the CLM revolution is giving them a major ally in the fight for transparency.
Look at CLM leader Outlaw for an example of how this works. All changes are version tracked, so no party can sneak in old, deleted language to a later draft. Each party can clearly “red line” problem sections, so each understands what needs to be resolved before contracts move forward. If a section is deleted, any other portion that refers to that section will be automatically flagged.
Tools like this take the confusion out of contract drafting and make it easier for parties to feel confident about the final document.
5. Clear away business bottlenecks
Contracts can form a bottleneck in the deal-making process, as each tiny change has to be filtered back through the legal department for approval.
But technology can help that. By setting up clear parameters in Outlaw, in-house counsel can set up a contract once, and then empower salespeople and others on the front-line to take it from there. With greater transparency and autonomy, deals can move forward more quickly and with better satisfaction among all parties.
6. Turn silos into interconnected systems
Finally, there’s the biggest change of all. The new generation of CLM is helping corporate counsel integrate their work in one end-to-end system, rather than relying on patchwork processes and apps.
When the CLM process is connected to all other aspects of workflow automation and management, legal teams and businesses see a range of benefits, from greater efficiency to increased productivity and accuracy.
What does this look like for in-house counsel?
- With CLM tied to your case and matter management, you can build the process into automated workflows, pull information directly from your files, and connect it to task lists, deadline management, and calendars.
- No more repetitive data entry. With connected variables, all changes you make to key information in a document will update the case files, and vice versa.
- When it’s connected to your document management tools, you can easily search and find the right contract and keep them securely archived in a manner that preserves context.
- With integrated e-signature tools, finalizing agreement digitally has never been easier.
- Connecting with intake and lead tracking software lets you seamlessly walk parties from their first contact to finalized contract.
- And with robust business analytics, you’ll have the insights you need to make the right decision, using the information that’s automatically captured in the day-to-day operation of your work.
As organizations grow in size, they increase in complexity at an exponential rate. In the resulting confusion, different arms of the organization stop communicating effectively and silos form.
But cutting edge, end-to-end legal tech offerings are smashing silos and opening up clear communication again. This leads to greater trust between team members, greater trust between corporate counsel and the organizations they serve, and greater trust between business and customers.
CLM goes beyond in-house counsel
The new generation of CLM is radically improving the process for businesses and their corporate counsel. But this isn’t just for them.
All sorts of professionals need integrated, end-to-end contract lifecycle management. Within the legal industry, this will be a game-changer for firms managing complex operations, such as big law firms and firms litigating mass torts.
Integrated, end-to-end legal operating core is also crucial for legal professionals working in insurance defense, personal injury, immigration, criminal defense, as well as prosecutors, public defenders, and those working in state, county, and municipal organizations.
As legal work increases in complexity, the best technology will continue to clarify and simplify workflows for all professionals.