The Key Strategies to Streamline CLM Implementations

At their worst, CLM implementations can be a clunky process marred by disagreements and ever-shifting strategies. Companies can overcome these challenges today by ensuring inter-departmental cooperation, clear communication and a disciplined approach that accounts for the needs of each department.

Contract lifecycle management (CLM) remains a top investment priority for general counsel in most industries for harnessing the power of automation in contracts and opening up bandwidth for higher-value work. But while many legal departments tout the future potential of their CLM systems, some are self-sabotaging from the start and compromising their prospects for success.

For a truly successful CLM implementation that provides the best possible ROI, in-house legal departments must have a laser-like focus on the process. They need to have their internal strategies, priorities, and templates lined up so that all of the primary legwork goes into data migration, building automated clause playbooks, and opening up workflows and better profit-generating opportunities for the company’s blue-chip legal talent.

Fortunately, there are several strategies that in-house departments can apply from the very outset of an implementation to better equip them for a seamless transition and launch.

1. Establishing uniform document templates

AI-powered CLM systems require significant training so they function as expected. Even though most CLM systems are adept at detecting patterns and calling out material deviations from a company’s preferred contractual language, it will only be as effective as the information teams feed it.

It is far too common among companies to submit templates to a CLM vendor for machine learning (ML) work, only to request material edits to those templates deep into process. These changes often disrupt an AI module’s crucial training around identifying deviations in venue terms and indemnification clauses and making auto-suggested changes that align with the company’s preferences.

To fix this issue, companies must canvass key departmental decision-makers involved in any aspect of contracts, including personnel on the front lines of negotiations. Together, they should set a standard for what contracts the AI module must train on and when it should flag potential issues or the need for further negotiation. Solidifying this strategy from the get-go will make the ML process easier to deal with and reduce disruptions around data migration, coding, playbook building and more. It will also ensure that all stakeholders understand how the CLM handles contracts, including those that differ from the company’s established norms.

2. Weighing the needs of each department

Few CLM solutions will tick all of an organization’s boxes. Instead, the best a company can do is to ensure it meets the needs of the departments that will rely on CLM the most. While getting feedback from key departmental leaders is elementary in theory, it is often overlooked in practice.

Even though departmental stakeholders may share the same employer, they still come to the table with different priorities. For example, sales teams may be intent on working within the confines of their CRMs, while legal departments may want more oversight over term updates and workflows. Organizations that fail to address each department’s pain points adequately will go into demo calls, selection processes and implementation planning meetings with conflicting agendas around which feature-related rollouts to prioritize and which bottlenecks the CLM software should address first.

To resolve this issue and ensure their CLM journey does not derail, organizational leaders must account for the needs and pain points of the departments that will interface with the CLM. Armed with this information, organizational departments can cohesively work together to develop relevant success metrics for their next CLM, and prioritize rollouts and additional features around how well they meet those metrics. It’s a process that will save many headaches down the road — and encourage heightened adoption of the company’s new CLM tool across the board.

3. Creating a cohesive feedback workflow

CLM implementations can also get derailed by inconsistent, haphazard feedback from those involved in a company’s CLM shopping process. However, these difficulties can even arise long after the finalization of the purchase and during the implementation. This scenario is far from ideal; the last thing anyone wants is for key stakeholders to request materially-different replacement templates or a significant shift in ML strategy. These can distract from the end goal of implementation and adoption, and incur unnecessary costs and delays that could have been avoided had all stakeholders been on the same page.

There is no easy solution for managing dissent on strategies or last-minute changes; these pivots can fester post-purchase. While teams may not always be able to circumvent changing circumstances, clients can go to great lengths to better control how they communicate necessary changes and avoid costly disruptions.

The path to reducing costly feedback loops lies in mastering readiness. After all, the more ready and prepared a team is to tackle its implementation requirements head-on, the less likely there will be requests for material changes. Teams must do the necessary legwork in advance to select ideal contract templates, collect data and interview feedback from key stakeholders and review these findings to unveil everyday needs and oft-noticed bottlenecks. This process should extend to their research of prospective CLM vendors, and even confirming if demo teams can run the company’s sample contracts and show how the CLM would operate for the organization’s stakeholders in real time. If asked, many CLM providers will do this!

While the organization should ideally troubleshoot any potential disagreements in the vendor research and demo phase, the company’s purchasing and implementation divisions should find ways to maintain open and organized dialogue on any changes they want to implement. These groups can accomplish this goal through regular check-in meetings,

sharing progress summaries, and even regularly carbon-copying pertinent purchasing team contacts on change requests. Following this type of workflow will help everyone stay unified around their objectives and mitigate the likelihood of sudden surprises.

Still, last-minute changes can arise during the implementation process. In that scenario, not all is lost. The company’s involved departments should balance the necessity of the requested changes with the aims of the implementation, and maintain ongoing dialogue with the vendor and implementation team on whether they should treat the request as a high-priority change or revisit the changes later on.

At their worst, CLM implementations can be a clunky process marred by disagreements and ever-shifting strategies. While these types of bumps are inevitable in any CLM or legal tech adoption journey, they are many ways to control their impact. Companies can overcome these challenges today by ensuring inter-departmental cooperation, clear communication and a disciplined approach that accounts for the needs of each department.

This article first appeared in the August 21, 2023 issue of Legaltech News.