How to talk to your executive team about CLM maturity (hint: more revenue, less risk)
What happens when top corporate lawyers realize the hidden business value of advanced contract lifecycle management (CLM)?
We must assume that many of them leverage that knowledge and the rich data that comes with it to advance company goals. However, earlier this month, they did something else. They came together to host a webinar, sharing with others how agile CLM has brought down silos and generated more value from contracts—transforming them from static documents into the lifeblood of thriving enterprises.
Raising the legal team’s strategic profile with CLM
In the webinar “A New Contract Era: Managing, Collaborating and Thriving,” VP of Solutions and Consulting for Factor Law Michael Callier expounds on his experience in-house with Nike. Moving from a traditional legal environment to Nike, Michael saw for the first time all the efficiency models and problem-solving frameworks that corporations leverage. He realized that there were significant and measurable differences that CLM could make not just within legal departments but within the larger organization—areas that were not addressed by other mechanisms.
Michael understood that if he wanted to bring about change, he had to start talking with the executive team about the evolution of contracts in a way that related directly to the business, not to the legal processes. He had to help them see how the data within the contracts was vital to holistically capture the converging elements of operations. How a connected contract management experience generates value, eliminates bottlenecks, and reduces risk. And, later in his career, how reduced contract cycle times can lead to faster go-to-market motions (specifically in the case of clinical trial agreements).
Definitions: early, intermediate, and advanced CLM maturity
During the webinar, the concept of CLM Maturity capabilities is introduced to help teams better understand where they stand in their risk-management and revenue-recognition journey.
- Early-Stage Capabilities: lack of standardization and centralization. Mostly ad hoc, traditional approach to legal work (although could be a good substantive quality)
- Intermediate Capabilities: systems and standardization in place but without full compliance, utilization, and integration
- Advanced Capabilities: sustainable automation, self-service capabilities and focus on continuous operational improvements, strategic impact, and highest risk-complexity work
Once a legal team has reached the stage of advanced capabilities, the members are able to shift their focus to high-risk, high-strategy work and on continuous improvement—leveraging the rich data analysis offered through advanced automation.
CLM maturity – how to take the next step
Recognizing your organization’s current CLM maturity stage can help in setting goals for the year ahead. It can also offer a framework for communicating at the leadership level on expectations related to risk, slower cycle times, and areas for improvement.
There are unique challenges for the early-stage and intermediate stage. These include the dedication of resources needed to transition to standards and ensuring that you have deployed a system that your users find intuitive and beneficial (and if not, being willing to replace it).
For those already at the advances stage, this is the point where contracts can begin to act as the foundation of all business functions. From critical infrastructure to retaining talent to customer relationship management, contracts can transform from static documents to drivers of business efficiency, benefits, and growth.
Watch the webinar: A New Contract Era: Managing, Collaborating and Thriving
To learn more about what the New Contract Era looks like for today’s organization, check out the webinar here or schedule a demo to discuss how Agiloft can help advance your organization’s CLM maturity.