Welcome to LEGALTECH MATTERS and a Litera podcast dedicated to creating conversations about trends, technology, and innovation. To modern law firms and companies big and small.
00;00;14;21 - 00;00;33;14
Hello everyone. I'm Caroline Hill, editor in chief of Legal IT Insider and on the podcast today we're here to talk about CLM implementation. And I'm joined by Babar Hayat, who's the head of Product Tech Innovation and Transformation at Konexo. So, which is Eversheds Sutherland's Global Alternative Legal Services and Compliance arm. Hi, Babar.
00;00;35;07 - 00;00;36;20
Hi, Caroline. Good to be here.
00;00;37;03 - 00;00;54;18
Thanks for joining me. So, you joined Konexo in 2019 from Thomson Reuters, and you were previously senior director of Product Strategy and Legal Tech Innovation. You've been there for several years now - time flies!
00;00;56;09 - 00;01;18;14
I joined in January 2020 which was just a couple of months before the pandemic. So, it was very quickly into the you know there I think I was in the office for a couple of months before we went into lockdown. So, it's always interesting joining an organization, you know, getting up to speed, building those relationships in a lockdown environment.
But, you know, I think many people probably faced that over the last couple of years, haven't they?
00;01;23;15 - 00;01;41;08
They have. Actually, it's been so lovely just recently being properly back to normal and meeting people face to face, going out. And it makes a big difference. Although we've done so well in the last while. I think people are just loving having some degree of normality again.
00;01;43;06 - 00;02;04;20
I mean, it's a huge difference. I think just being you know, we're working to a hybrid model and it's quite nice being in the office for a couple of days a week where actually you can see your colleagues, see your clients and it's a different type of connection, you know, having to see people. It just views them in a team environment. It's actually quite nice to be able to see them in person and just get to know them in a slightly different way, which is quite good.
00;02;10;08 - 00;02;31;28
So, we're here. So, I'm grateful to you for spending time with me. So here to talk about CLM implementation. So, we're going to be sort of taking a three-pronged approach to the conversation, as it were. So, we're going to be talking about where to start, which seems like a good place for us to start, what good looks like and then what can go wrong.
So, we talk about CLM personally in this publication, I write about CLM implementations a lot. It's obviously top of agenda for a lot of corporate legal teams. But as we know, these things are not something to be taken lightly or rushed into. And do you get the impression that corporates are, you know, perhaps feeling the pressure and that these, you know, this conversation is going to be really helpful in setting out some of the key to almost perhaps doing some hand holding in terms of giving them some key pointers, in terms of setting the groundwork and then sort of working through the process.
So, I guess, I mean, you might want to talk about your role and how you work with CLM implementation, but where you so perhaps talk about that and then also where do you start.
00;03;22;12 - 00;03;47;10
Yeah, I think I think it's the hardest part, really understanding, knowing where to start and what will deliver the greatest impact and to whom. And so, I lead technology and transformation at Konexo, so I spend a lot of time with clients and have done over the last few years helping them think about I suppose the requirements, the challenges and the pain points and how they can solve for those.
And what we do know is technology is a part of the answer. It's certainly not the full answer to too many of those challenges and pain points. I think what makes that challenging is there are a lot of technology solutions in the market and it's quite overwhelming. You know, if you are out there looking for contract lifecycle management or contract management solutions, you'll see one in the spectrum you're seeing CLM platforms which essentially do and manage the entire end to end contract process, or you'll get points solutions which fall for individual parts of the solution.
And, and for an organization, it's quite difficult to actually demystify what solution is the best for them, meets the requirements, is secure, actually will interact with some of the other systems and solutions they have in place. So, I think getting started is sometimes the most difficult aspect. Certainly, what we've seen and where we're working with clients, I think there's a few key steps that we would suggest and have found actually quite effective.
The first is really around operating model and looking at your processes, understanding how you currently work, how you interact with your different stakeholders, what the contract processes look like today. Before you actually even get into the technology because the technology may, as we were saying, play part of part role. But equally, maybe processes change, a process changes, maybe how you interact with your different stakeholders.
It also may be the types of resources that you need going forward to actually support some of these contract processes.
Another aspect I think we found quite useful is what we call an activity analysis, and really that's around understanding where your team are currently spending time. You know, taking perhaps a week or two and looking at what proportion of their time they are spending on different contract activities, who they're engaging with. The volume of work potentially looks like, and it begins to give you an understanding of things like where your, you know, your, your contracts are currently stored.
How are your team currently accessing that information? You know, how do you receive contract requests and are they complete when you receive that information? How long does it take to actually draft or amend contracts? How many times do you do you spend finding certain clauses when you're reviewing contracts, you know, knowing when your actual contract obligations are met?
And I think by going through that activity analysis, you can begin to narrow down areas which are taking longer than you would like, you know, where there may be low hanging fruit for you to actually solve for and areas that will deliver the greatest impact if you solve them in the right way. So, I think almost ignoring the technology to begin with and focusing in on how do you currently work where you're currently spending your time is a good place to start to begin prioritizing what you actually need to put in place.
00;07;03;00 - 00;07;25;12
It's interesting because I think for some people listening in, that can be quite terrifying, you know, that I mean, and actually I'll get the impression anecdotally I know that some people looked at CLM to try to provide that information. It's almost like a bit of a chicken and egg how I know this is obviously where you work, but so for people listening and going, oh, my goodness, I wouldn't even know where to start.
Is that a very complicated process? Does it have to be?
00;07;30;04 - 00;07;49;06
I don't think it has to be a very complicated process. I think what you're essentially doing, it's getting a rough view of how your team are currently operating. You know, it doesn't have to be precise or exact you know, you certainly don't need time recording information. As you know, one of the questions we've had is we don't record time and therefore, how do we actually get to that level of detail?
And I think the truth is that you don't meet that level of granularity at least to begin with. What you need is a methodology or a framework which helps you just say, you know, these are the types of activities from contract request through to allocating it, making sure the right people are working on something, how you're engaging with stakeholders, and just putting a percentage of your time in a given week against those activities.
You know, you don't necessarily have to put down exact values or any of that exact information and that rough order of magnitude begins to form a picture, particularly when you do that across the team as to where the team overall are spending their time and perhaps where you need to focus on. I think the other interesting aspect that begins to highlight is where you need to dig deeper and you know, typically we would suggest that if you're doing an activity analysis, you also speak to some of the individuals who've provided you that feedback to an activity analysis, because it begins to then give you insight into how they engage stakeholders, where it's important to maintain those relationships with your stakeholders directly, where it makes sense for them to interact with the system and with those self-service opportunities might be. So, it doesn't it doesn't have to be a lengthy exercise. I think in all of you. I think it can be a fairly, very short exercise. It shouldn't take more than 30 to 40 minutes to complete one of these activity analysis per person which actually I think is a worthwhile investment.
You know, once you're starting to prioritize some of the areas that you want to focus on and then, you know, from that point onwards you know, as you begin to identify some of the solutions, you can actually then focus on more quantifiable information, capturing data as part of any processes, any systems that you put in place, which then give you more, more precise information around other things that you could be doing within the contract space.
00;09;44;13 - 00;10;05;17
Do you tend to see there's been an awful lot of focus, probably thanks to CLOC, but also just generally on legal operations directors due to the corporates, you know, someone listening, and we don't have one or we're hiring or whatever do you do you typically engage with the legal operations director? Does it matter or can it be anyone on the team that does this?
I know these are quite logistical issues, but I really do feel like, you know, people struggle with the logistics, to be perfectly frank with you.
00;10;12;22 - 00;10;38;13
Yeah. You know, I think it's ideal to have someone who's focused on operations who can help drive some of this forward. But that doesn't mean it can't be done if there isn't a legal operations person. You know, we engage directly with individuals within the legal team who, you know, are spending disproportionate amounts of the time on manual contract processes who found actually benefit in doing this exercise.
So, they can just focus more on that strategic high, you know, more valuable work. And so, whilst it's I think it's useful to have a legal operations person, I think that's ideal. I think in the absence of those individuals, I think it I think, you know, someone within the legal team can certainly help facilitate the first few steps of this process.
You know, certainly I think as you get into thinking about solutions and implementation of the solutions, the change management aspect, I think having adequate time within the legal team either in terms of dedicated roles like legal operations or, you know, dedicated time from the legal individuals, things are going to be important to make a CLM project successful.
00;11;28;01 - 00;11;52;20
Yeah. I mean, with any project, it's always seems quite incredible to me that people are trying to apply technology when they don't understand how they work. This applies across the board, right? I say until you understand what you do and how you do it, it's very difficult to even start to apply technology or especially if you want to sort of introduce some degree of automation or, you know, if you can't, if you don't know how your process is, but you can't hope to automate them.
00;11;53;16 - 00;12;25;22
Yeah. And, you know, I think it's interesting, we've seen examples where exactly the same solution has been implemented successfully in one organization and not successfully in another organization. And the reason behind that has typically been that upfront thinking hasn't been done around deployments, around processes. And, you know, and as a result, actually your what you measure success against isn't defined upfront.
And so you are, you know, going through the technology first trying to implement something and you can't measure success. It's not meeting requirements. And so, thinking about use cases you're paying for a challenge is absolutely critical. I think in any technology project, whether CLM or otherwise and you know, I think we've certainly seen some of those foundational common use cases you know speaking would you pay fines payer organizations is actually quite useful exercise as well, so you don't have to go at it alone.
You know there's others who are going through the same process at the moment. It's certainly worthwhile speaking with others, other payers within your organization through events like CLOC and Legal Week and other events that are coming up.
00;13;15;19 - 00;13;25;13
So, tell me, so then you've indicated perhaps why some projects are more successful, but so what does a successful CLM implementation look like?
00;13;27;15 - 00;13;50;29
Yeah, I, you know, I think I think it's a range of different, different factors. I think, you know, as we've talked about having a, you know, thinking through your requirements, thinking through your processes upfront, I think it's critical, you know, what you want. I don't think what you want to be doing is replicating the way you currently do things today into a system.
I think what should be done is looking at your processes and looking at opportunity to streamline that as you move forward rather than replicating exactly what you did today into a system. Because the truth is that doesn't work. You know, if you if you're doing exactly the same as you're doing today just into a system that that may give you marginal efficiencies, but it certainly won't give you the transformational benefit that you might be looking for within CLM.
And you'd be but I suspect you won't be surprised Caroline. But there are plenty of organizations that try and try and do that in our experience. But I think there's a few factors that I think make any technology implementation investment, particularly CLM, because it's so wide ranging, successful. I think you need sponsorship at the right level. And I think you need, you know, advocate from the relevant team jurisdictions, stakeholders, you know, those who can act as champions to actually implement that change.
And I think is quite important to highlight. Yes, it's technology, but actually it's a change that you need those advocates championed for. I think that I think it's I think it's important to have a good governance model and actually a good structure to tackle issues and make decisions as they come along. You know, often times I think decisions we've seen, decisions can be made in isolation or perhaps not made at all.
And actually that leads to an almost spiral effect in terms of not being able to meet the requirements of solving some of those key things when they should be. I suppose some of the other aspects in it, change management in communication, I think are absolutely critical and actually should be as you think about requirements and processes engaging with your relevant stakeholders, ensuring that there is a plan around how you communicate the change that's coming to those relevant stakeholders, both in a legal and all the other teams that you, your team will interact with are quite important. One of the you know, certainly one of the areas that we've seen, you know, there's been various, varying approaches taken in the past but we've seen organizations that attempt to go after a big bang approach. You know, they see all of the bells and whistles and the functionality that's available within CLM platforms and some of these other technology solutions. And, you know, the reality is that that's great and I'm sure it will be you know, that functionality will be useful for the organization in some form at some point.
But going after a big bang approach doesn't usually work, I think, quite honestly. And I think it's looking at the incremental benefits that you can get, you know, looking at the functionality, the capabilities that can be delivered alongside this process changes and the operating model changes that are important to almost building a roadmap towards a wider CLM implementation.
Right. And going for that big bang approach where you want to deliver the most amount of functionality in the shortest amount of time. So, the least amount of cost to the most amount of people that, you know, doesn't work and building that roadmap actually is quite key. Also, from a just an adoption standpoint, could you imagine just rolling out a fully blown CLM system to hundreds of people across your organization in one go?
I mean, just from an adoption standpoint, the change itself would be quite overwhelming, particularly if you marry that up with any process changes or people changes that you bring in as well.
00;17;34;22 - 00;18;04;18
So much time there and I am, and I was not saying you weren't going to see the podcast that people listening but vehemently when you were talking about not just replicating processes, which I think is a recurring theme which I think the legal industry is becoming much wiser too. And I've had that conversation recently when it came to introducing a practice management system where traditionally people have wanted to just replicate all of their own processes, whether they are efficient or not.
And actually, that theme runs across the whole of the technology space, whether, you know, just think about what you do and how you do it and whether that's the right way. And actually, I think one of the really, I mean, we're talking about the corporate space. And as you said, you know, they have their peers to talk to.
And I think, you know, really sort of having conversations about how would the people do things. You know, I know some law firms are more forward-thinking law firms, I think, speaking to corporate, that the sort of clients in some cases or corporates are more generally going, right. How do you how do you do things? And then perhaps taking examples from them in terms of making themselves real and really trying to run change management programs.
Lawyers obviously typically find it harder to change for lots of reasons. But, you know, running change management programs ahead of these big tech implementations. So, let's think about how we do things. Let's try and do it more efficiently. That's one change manager. I mean, this all sounds quite daunting, I'm sure, in some cases, but I think it seems to be really worthwhile.
I was curious. So, you talked about stakeholders. So, should the step and how important is it? Should the stakeholders, the executive level or across the business or what's you sort of thoughts on that.
00;19;16;24 - 00;19;36;29
Yeah, I think I think, you know, certainly I think it needs to be a spectrum across a range of different seniority of stakeholders. I think having the right level of sponsorship, I think is important to, you know, to make sure that the change that's coming is understood, the impact of those understood, the benefits of delivering that change are understood.
But actually it's important to have individuals who do this work day in, day out, whether it's working with your sales team, with the business stakeholders, whether it's the procurement team, you know, I think you'll be interacting with them as part of your contract management processes and having a selection of stakeholders from those you work with on a daily basis, I think is absolutely key.
And actually, you know, the other consideration is how you interact with other systems within the organization. If you have a CLM system that exists in isolation, a silo from everything else, it creates a different type of inefficiency. You know, you're still having to put in place manual processes or undertake manual activities when you're interacting with other systems, whereas actually working with your IT stakeholders to make sure there's connectivity or interaction with the right systems is also, I think, quite important.
You know, it's CLM is not too different from where CRM, for example, was, you know, a while ago as that was being rolled out across enterprises. And it has, you know, in a similar way, has multiple touchpoints across the organization. And we shouldn't just treat it as a legal system or opportunity. It's an enterprise-wide system. Everyone's involved in some capacity from a contract management process across the organization.
And therefore, it should be, you know, if we should be treated in such a way. And of course, it is.
00;21;09;10 - 00;21;28;21
I mean, because also that it can become obvious and you're using it for visibility, but also to save time and if it's not if there's not that integration, actually, it can become very frustrating for people contact going from one system to another and actually a lot of wasted time. And that's one of the things that people find super frustrating, I think having to go from the screen to that screen.
And so that integration, I think is definitely what you need to do about the Big Bang buying into you know, about the types of system, how I guess a legal operations director would have all of this information. But in terms of what's available out there, but I'm interested in you saying don't go for sort of the most the most functionality. Is this also some guidance in terms of how they choose the system that's right for them in terms of the level of functionality that's available yeah.
00;22;01;07 - 00;22;23;27
You know, I'm not sure if there is a I mean, certainly there's lots of methodologies out there that can. But I think the key thing in my mind is always around spending that time upfront, thinking about your processes and requirements, because that makes the process of selecting, identifying the technology that will help you get so much, so much simpler.
We've seen examples where organizations have gone with the technology first approach. You know, they've gone out, they are evaluating a number of different CLM technologies. They are, you know, they fall under different categories. You know, some are more generic platforms. A little more contract management specific platforms, a point product. And you can get quite overwhelmed, you know, even if you are looking at a dozen or so different solutions, it's very difficult to differentiate, at a high level, between those different systems if you haven't defined your requirements and processes upfront. The reality is if you say, I need a document repository most systems will say they have those document repositories. Whereas actually, if you can be more specific and more granular, exactly what you need and what you want to achieve, then it becomes easy for you to identify those that will meet your needs.
And I think that that's really what you know, if you take away one thing from this, from my perspective, it's that actually being spending that time upfront thinking about use case and requirements is going to set you up for success, whether it's the CLM implementation or any other technology solution. And that's the best approach, you know, and of course you know, as you go to your requirements, not all requirements will be equal.
00;23;44;05 - 00;24;08;26
And using a simple methodology like Moscow, which is, you know, must, should, could what have requirements and basing those based on, you know, a view from your legal team, a view from some of the stakeholders that you engage, whether it's your sales teams or your procurement team and so on. It begins to give you a clearer view of actually what matters to the business and then what you need to get into the organization for it to be a success.
00;24;10;02 - 00;24;38;00
So, on the topic, of success, so you've done your because we're good people, we're listening to this podcast and taking the advice and we've done we've done the sort of we've run it to our processes and we've considered the, the right thing and put it we've we do in the implementation. What does success look like? I'm not talking about the factors in terms of the pre consideration, but when you've actually done the implementation, how do you measure success?
00;24;38;00 - 00;25;10;04
So, I think there's a few different dimensions to it. I think firstly it's being able to measure some of the improvements in terms of the contract management process. You know, are you able to complete your contract management processes more effectively? So, for example, you got a better set of instructions as they relate to contracts coming into the legal team.
And that could be through a contract initiation process where you know, your business stakeholders are more efficient, be able to communicate what they need from the legal team when it comes to contracts. You know, so there's some specific metrics around your ability to capture those instructions, respond back to those instructions in time, being able to work through that contract process.
So, whether it's a reduction in negotiation time, response time. So, to the specific metrics around completing that contract process or speed improvements generally, I think there is an aspect around revenue and financial benefit that can be achieved. So, you know, we've seen examples where we're actually there's a huge number of legacy contracts that no one really knows what's in those contracts.
You know, what the obligations are, what the renewal dates are, the SLAs and so on. And actually, that has a direct impact on revenue and revenue leakage more specifically for an organization. And actually, if you can track and monitor some of the specific data points for more clearly and effectively, then you can have a direct impact on plugging some of that revenue leakage that may occur within the organization.
I think we've seen estimates in the past of between 5% and 10% of contract value is lost as a result of it auto-renewing, for example, and there's a direct financial benefit of having a better contract that you process. I think just stakeholder relationships. You know, oftentimes we've read we'd hear about something stuck in a queue somewhere and we don't know where it is and how long it will take.
And you know, our suppliers are waiting, our customers are waiting in it and we're just not sure where it is in the process. And, and actually by having an efficient contract management process, you can reduce those response times, but also you can provide a level of transparency, you know, improve the morale overall in the legal team, in the committee, and for the business stakeholders because, you know, they know what's going on at what point without having to chase and send emails and make phone calls and all of that type of stuff.
So, I think this is you know, I think there's a range of benefits such as those and of course, can't forget the better relationships you get with your suppliers and customers. Rather than taking days, weeks, months to actually go through negotiation contract processes, getting simple documents over to that an organization that actually you can if you can streamline and improve that process, actually you reduce that time in how you engage with your suppliers and you and your customers.
00;28;07;19 - 00;28;35;22
Yeah, I think the stakeholder point is so important and actually potentially devolving some of some power to the stakeholders in terms of being able to do their own contracts down the line right into when you sort of get to the stage where you can make it a bit more complex and decide which, which contracts need to touch the legal teams in which don't, you know, there's all sorts of ways aren't there, but so in terms of when this obviously our success story is that so what, what goes wrong?
I mean we start starting to get low on time, but you know, what could go wrong and what do you do if it does go yes.
00;28;42;27 - 00;29;07;08
You know I think that's it. Yeah, it is an interesting question isn't I mean, I think we've seen, you know, failing to involve the right stakeholders. I think that that's often or that sometimes missed as part of any technology or CLM implementation, you know, at truly understanding their workflows, their pain points, the systems that they need to interact with.
It needs to be an important consideration. And we've seen that that's not really, you know, sometimes that's an afterthought. You know, when you've gone further down the line, I think a big bang approach rather than incremental small rollout, you know, understanding what your core requirements are, rolling out those core requirements and building on the success of rolling out those smaller pieces of functionalities.
It's, I think, quite key to success. We've touched on data a couple of times, but you can utilize the data that you capture, collect through the process to actually inform what you do next. Is what you've done working. You know, is it giving you insights into other areas that you need to prioritize first? You identify with potentially the noises, and you can improve that part of the process.
And I think failing to plan for change management is probably one of the biggest areas we've seen go wrong. You know, so often times it's seen as a technology implementation and, you know, it needs to be implemented up and running and it needs to be done within this timeframe, which is, you know, entirely right. And that's but that should be one of the metrics.
But certainly, change management needs to be right up there in terms of thinking about technology selection and implementation. You know, you need to think about how your stakeholders currently operate, how they, you know, how they will adapt to react to different changes. And that's not just that, you know, that's not a team at the individual level, team level, jurisdictional level, the failing to plan or manage change effectively, I think we've seen have quite a detrimental, you know, and it doesn't often lead to success if you don't manage change effectively.
00;30;59;10 - 00;31;01;04
And it can be quite costly.
00;31;02;13 - 00;31;27;19
Oh, yeah absolutely. And you know, the other interesting aspect is if you know, if you invest a significant amount of time and effort and money into purchasing any technology solution, CLM solution and it goes wrong actually has a as a negative impact on future considerations when it comes to technology, you know, in terms of confidence and trust.
You know, if you're if you know, whether your legal team or your wider organization will want to adopt future technology or improve other parts of the process, change their processes because they've had such a negative experience potentially. So, I think that we've seen that as a consequence. And really, I think from, you know, from my experience and from what we see in the market when those things go wrong, I think you need to just step back and have a very clear view as to what matters most for your organization.
Coming back to those initial steps around, what are your success criteria? What is the vision? What are you trying to ultimately achieve? And so forth? And then making sure that you're essentially tackling the things that matter the most now. And in some cases, we've seen that the technology selected was the wrong decision.
And, you know, you have to make sometimes a hard decision as to whether investing in forcing the business down a particular route is the right thing to do or whether actually it's looking at it from a different perspective and then looking at either a different solution or whether it's a different process change and in some cases, it's more about implementation and change management.
You know, are you setting up configuring, prioritizing, communicating the change that's coming in the right way to do business?
00;32;57;17 - 00;33;22;04
Okay. Unfortunately, we've got to stop there because we're at time, but you'll find that really fascinating. Thank you so much. It's exciting times. I don't really want to end necessarily on a negative note, but I think it's really worthwhile being practical and thinking through all of these. I mean, some of a lot of in-house teams already have done successful CLM implementations, but this is definitely something that we're being asked about a lot.
So, I'm really grateful to you for your insights, sharing what you're seeing at the coal face. So, Babar, thank you so much for your time.
00;33;32;18 - 00;33;34;04
Great. Thanks, Caroline. Thanks for your time.
33;37;10 - 00;33;43;02
Thank you for listening to LEGALTECH MATTERS. Be sure to subscribe wherever you get your podcasts.