Aligning Legal with the business

Last week, Dolphin Software attended the Corporate Counsel Exchange event in Brussels, Belgium.  Despite the logistical difficulties of getting to Brussels as a result of our volcanic ash-laden skies, the event was well attended by the General Counsels of Europe’s leading companies.  We wanted to highlight a number of the key themes and issues that arose from the event.

The loudest and clearest message was that the Legal function should aim to become more aligned and integrated with key business processes.  We find this slightly ironic as an IT software vendor because we have been hearing the same message coming from industry analysts and business leaders to align company IT functions with the business for the last ten years – Some may argue whether this has been truely achieved or not.  So, now it is the turn for Legal to be in the business spotlight.

The second key theme to emerge from the Corporate Counsel Exchange event was the issue of staff morale and motivation in the legal department.  Perhaps the issues of business alignment and staff morale are inexorably linked?  It may be argued that if the corporate legal function was less reactive and took a more positive and proactive approach to embedding legal best practices in to core business processes, then the issue of business alignment and staff motivation could be improved.

The third theme to arise from the event was the adoption of legal technology solutions to improve legal operations.   Legal Spend Management and Contract Management software solutions were high up on the shopping lists of the delegates.  When you think about it, other legal-orientated technology solutions, like Matter Management, Legal Spend Management, and eDiscovery solutions may make legal operations more efficient and cost effective, but do little to align the legal function to business processes.  

Given that the contract process touches so many internal departments and stakeholders, we would argue that General Counsels should embrace the new generation of Contract Management software solutions and begin to ‘own’ the contract management process to demonstrate the proactive and positive impact that Legal can have on the business.

The IACCM and other commentators have long argued for a single ‘owner’ of the contracting process, since many organisations have not been able, until now, to identify a central influential authority figure to own this business critical process given the large numbers of other stakeholders in the process, like Procurement, Sales, HR and Finance.

How can contract management software help align Legal functions to the business?
In some regards, the contracting process has become the last key business process to be automated.  Contract management for many organisations remains manual, disjointed and inefficient.

Dolphin Software recently undertook some market research in to the way that organisations handle the contracting process today.  We found that the majority of companies followed a process similar to this:

  • Business users call or email the legal department when they want a new contract to be drafted
  • Internal legal staff spend 5-7 days on average extracting further information from the contract requestor and drafting the first version of the agreement using MS Word based templates or by copying terms and clauses from previously created contracts
  • Draft contracts are sent via email as a rudimentary workflow system for internal review and approval.  This creates multiple copies of the contract document and elongates the contract cycle time.
  •  Contracts are stored in a variety of storage locations: paper filing cabinets, user desktops, Windows file share drives, or document management systems
  • Contracts are managed by spreadsheets, when they are managed.

Contract Management software solutions are able to automate and streamline much of this process by providing legal and business stakeholders with the tools to be able to create contracts in a rapid and efficient way, to speed up the contract review process through the use of workflow, to provide a central electronic repository for contract documents and a central database for contract related data and then to provide managers with real-time alerts, KPIs and management report to ensure that all terms, obligations and commitments are adhered to.

With an efficient contract management process, reinforced by the use of Contract Management software, the legal team can control, but delegate much of the work associated with contract management, but importantly, show the business how legal based solutions can have a direct and positive impact on the operations of the business.

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