This year, the Legal Department Operations Survey, conducted in partnership with Above the Law, asked respondents to rate their maturity in various areas of operation, including Contract Lifecycle Management (CLM) technology.
Among those respondents who used CLM tech (just over 80% said they did), half put their maturity at either a 1 or 2 on a scale of 1-5. Conversely, less than 1% of respondents who use CLM technology consider themselves power-users, rating themselves 5 out of 5 for maturity.
In other words, while many legal departments have adopted contract management software, many are just beginning to leverage the technology in their practices. Some departments are in their infancy, using CLM technology solely as an electronic repository post-execution. More mature departments will use CLM for pre-execution activities, like template management, clause libraries and automated approval workflows.
Another indicator of CLM maturity is found within the survey in response to questions about the collection and utilization of metrics. Asked which contract management metrics departments track with their CLM, the most common response is “contract volume by customer, partner, program type and geography.”
This is important data to gather as a starting point for a company. But it is very basic information and telling of the unrealized potential of contract management software in today’s legal departments.
In truth, this is totally to be expected with new technology, especially when that technology handles something as sweeping and complex as managing contracts across highly-matrixed, global enterprises.
Contracts are language-based and unstructured, meaning they do not lend themselves to straightforward data analysis the way, say, external legal spend does. On account of this challenge, early CLM systems were little more than a repository to store and share contracts across the enterprise.
However, today’s contract management software, leveraging the power of artificial intelligence and cloud computing, can do much, much more.
Best-in-class CLM technology can extract contract data and metadata at scale to give enterprises deeper and wider views of their contract landscape. This means business accelerate business, protect against risk, and optimize relationships.
In the report, we explore steps companies can take to get the most value out of their contract management solution. To learn more, please download the full report: The 2019 Legal Department Operations Survey report.