Five D’s Will Determine How Well In-House Counsel Manage Contracts
“Ugh! I’ve been squinting at contracts all day,” my lawyer friend said. “It’s nice to see the sun and talk to a human!” We all can relate, right?
Business lawyers are so often trapped in tedious contract review and negotiations, largely because we guard our client’s legal knowledge and business intelligence as though it’s a secret fire we must keep hidden deep within the recesses of a cave.
We lawyers claim the sole right to tend the company “fire of knowledge” and interpret its well-being. When it comes to contracting decisions, everyone else has to wait their turn and take our word for it.
The cave model of contract management is not just exhausting; it also prevents companies from adapting to new market realities. A crucial difference now is that means we must understand the ways disruption is changing contract negotiations and management.
The Coming Contracting Transformation
A seismic shift is transforming our hidden “fire of knowledge” into a bright, illustrative campfire for all to see. This transformation arrives on the heels of five larger technological trends that are redefining how businesses organize and operate:
- Decentralization of information
- Democratization of access
- Diversity of thought
Legal departments are using more collaborative contract management software (CMS) to maintain critical relationships and negotiate seamlessly while managing risk and optimizing assets with less effort. The most effective CMS platforms will reflect the integration of the 5D’s in the next five to 10 years.
Documents you work with today likely originated as digital files and will only ever exist in digital form. Digitally native assets contain metadata that tells who created the file, when and how it was edited and other details. Digitally native assets also form relationships with other digital assets. E.g., In-text citations link files to other documents. Links to company URLs connect documents to organizations.
Digitization adds powerful layers of insight and a new verifiable authenticity. Contracts are no longer paper documents. They’ve transformed into digital assets.
2. Decentralization of Information
Decentralizing information, similar to sharing stories around a campfire, gives company controllers the business intelligence they need to make more informed choices. They easily contribute relevant details to the discussion and gather the information they need to better fulfill their roles.
Decisions still adhere to company policies, but the open exchange of information enables smaller teams to make pivotal decisions swiftly. More nimble organizations avoid the delay and hassle that cause large, centralized organizations to lose out on rapidly developing opportunities.
3. Democratization of Access
Free-flowing communication gets the right information in the right hands at the right time to take advantage of fast-moving opportunities and protect against threats.
CFOs can join the campfire circle and access the financial data they need. CEOs stand back and focus on the big picture. Operations executives may look at the fire’s analytics, e.g., its temperature is and how likely it is to spread. Risk professionals care that the site is free from debris.
Here again, individual teams make more informed decisions and take action faster without waiting for one or two people at the top. Company performance is also enhanced by the cross-pollination of ideas from a wide range of team players.
4. Diversity of Thought
Every time we negotiate, review a contract, or contemplate a business decision, we must realize the opportunities and understand the risks involved. We need data and insight to evaluate financial implications and gauge how decisions may impact clients.
Now, numerous professionals with a wide variety of backgrounds, skills, and experiences enrich our information-gathering processes. Professionals from multiple disciplines sharpen our acumen in analyzing all aspects of an issue.
It’s no longer just the vision of one or two people driving the company forward. Others exercise initiative and unleash creativity, greatly expanding the potential for progress. Organizations that serve diverse client bases make decisions that reflect the values of their target markets.
Slightly improving existing processes is not disruptive. Say you’ve driven a horse and buggy for 20 years. You’re desperate to get to work faster. Do you add a motor to your buggy?
Of course not. You re-examine the situation in light of more recent advancements and ask, “How can we improve travel using new tools and expanded capabilities?” It’s the only way to discover that an autonomous vehicle may be the best option. It’s how other industries innovate.
And now it’s how legal departments reimagine contract negotiation and management in light of digitization, decentralization of information, the democratization of access, and diversity of thought.
Redefining Roles with Advanced CMS Platforms
Lawyers rely on advanced CMS platforms to manage the multi-dimensional digital assets that are today’s contracts. CMS platforms help eliminate data silos, spreading useful information to inform and expedite decision-making. Greater diversity of thought strengthens strategic planning and enlightens assessment processes.
Increased participation by other professionals frees attorneys from the exhausting daily responsibilities of maintaining the fire on our own. With the right technology, you’re in a better position to appreciate the campfire discussion, focus on long-term strategics, and optimize the value you bring to a more agile team.