Archive: October, 2014
The scariest part of this Halloween season might be what’s lurking in the dark.
We’re not talking about spiders and skeletons, ghouls or goblins; we’re talking about all the important – dare we say critical – information about your business that is kept hidden in filing cabinets, inboxes and shared drives. That’s right: contract data. The phrase alone may be enough to send chills up the spine of every General Counsel and Chief Compliance Officer in companies where contract data remains buried, disregarded, left for dead.
Indeed, far too many companies do not have any useful or meaningful way of analyzing the data in their legacy and active contracts – those common yet complex mechanisms by which nearly all of your external and internal affairs are governed. And when you have no way of knowing what and how many contracts you have, where you have them and what they say, you are exposing yourself to the most bone chilling word in today’s business world: risk.
One way to bury risk is to gain visibility into your company’s existing processes, knowledge and data. Visibility is the light bulb in the basement, the candle in the attic, the flashlight in the graveyard, the car keys in the abandoned truck with a full tank of gas.
Contracts serve as the backbone of the modern business. They contain nearly all the information you need to be able to assess the health of your business and your business relationships, both internal and external. The best Contract Lifecycle Management (CLM) solutions available today not only automate contract creation, they import key data points from legacy contracts, so you can search, sort, share and report on the data of your entire contract portfolio.
With time, CM software vendors will grow to match the breadth of the existing opportunity.
In a recent poston his blog, Commitment Matters, Tim Cummins of IACCM observes that, while the usage of contract management (CM) software has increased substantially in recent years, it hasn’t quite lived up to the original hype. As a CM software company, we agree that many vendors and companies alike have been slow to recognize the full range of potential benefits from CM. Instead, vendors have specialized on one or two dimensions of CM – such as centralized storage or speedy drafting – while neglecting other parts of the contract lifecycle. The degree of customization thought necessary to meet individual corporation’s unique needs has often led to a cumbersome end-user experience, which discourages use, thus undercutting the inherent value of the solution.
But before you resign yourself to an eternity of contract blindness, there is hope. Many companies actually do get many things right. Tim mentions some areas – here in quotation – that he claims could jumpstart adoption, namely:
Law firms use ridiculous amounts of paper. A study from a few years ago estimated that a single attorney in the U.S. will use up to 100,000 sheets per year – that’s nearly 400 pages per workday.
And that’s crazy.
Sustained awareness campaigns over the last few decades have led to a significant shift in public attitudes towards our personal responsibility to protect the environment. We all know the environmental impacts of paper are obvious, from deforestation to pollution from paper factories. In case you need a refresher, the EPA reports paper makes up 40% of the total waste in the U.S. Even recycling can be a source of pollution due to the sludge produced during de-inking. So in this day and age, when recycling is the norm and electric cars are cool, why haven’t legal departments caught up?
It could be that lawyers love paper – it’s what they’re provided with and expected to provide; it feels familiar in their hands; it’s safe, easily read and marked up; they can take it home; they’re used to it. Courts may be similarly resistant to alternatives to single-sided, hardcopy filings and submissions. Thus, in an industry built on paper documents, run by people trained with paper documents who answer to courts expecting paper documents, reducing paper use will clearly require a change in mindset.