A Roadmap for CLM Implementation and AI Utilization

In a recent on-demand webinar, Turbocharging Legal Contract Transformation in the Age of Generative AI, Bernadette Bulacan, Chief Evangelist at Icertis, and Kami Paulsen, Managing Director, Deloitte Transactions and Business Analytics LLP offer valuable strategies for effectively implementing a Contract Lifecycle Management (CLM) system and advancing in AI maturity. You can access the conversation here; here are some highlights from their conversation.

1. Addressing Pain Points and Optimizing Technology

Bernadette outlines challenges faced by legal departments, including cost control, process improvement, and technology updates. Based on insights from Icertis customers and the Blickstein Group’s Law Department Operations Survey, she identifies these pain points as obstacles to efficiency. To overcome these challenges, she suggests beginning with a review of existing processes to help reduce inefficiencies. Establishing cost containment goals early can set a solid foundation for adopting new technologies, such as a CLM platform, which can then help achieve these financial targets.

2. Accelerating CLM: Crawl, Walk, Run

Kami advocates for a phased approach to maturing CLM practices:

• Crawl: Start with basic tasks like creating a repository of contracts and clauses. This foundational step helps establish a solid base for managing a wide variety of contracts effectively.
• Walk: Move to mapping out contract workflows. Despite the fact that less than 30% of legal departments currently engage in this practice, according to the Law Department Operations Survey, mapping workflows is essential for long-term effectiveness and maturity in contracting practices. Visualizing and detailing these workflows can greatly enhance efficiency and clarity.
• Run: Finally, implement advanced features such as analytics and approval tools on your CLM platform. These features become highly effective when the initial stages of crawling and walking have been properly addressed. Kami says these analytics are useful for “proactive decisions around pre-execution stage because you are getting the data back from the post-execution stage.” But again, this is only possible if the pre-execution stage’s workflow is mapped.  

3. Embracing Change and Leveraging AI

As CLM practices evolve, expanding beyond the legal department is crucial. Bernadette points out that integrating legal operations with other functional areas of the organization can significantly improve overall efficiency. This cross-functional approach helps in breaking down silos and fostering better collaboration.

Kami emphasizes the importance of change management in this process. In the recent Law Department Operations Survey, the number of respondents who say their primary role is change management dropped from 70% to 57%. Kami says this may not be a bad thing, but rather reflects legal departments’ increasing awareness of the utility of external advisors in change management. An external advisor can offer critical guidance, especially when the CLM implementation involves diverse stakeholders from various teams.

Looking ahead, generative AI is poised to transform legal departments by automating routine tasks and improving risk assessment. AI tools are expected to help identify non-standard contract language and streamline review processes. Kami states that the people who “have gotten comfortable with Generative AI at this point are going to be the changemakers that pull the rest of us along in the next three years.” Future discussions will likely center on the strategic use of data in AI models and the resulting impact on organizational data management.

For a deeper dive into these topics and more, listen to the on-demand recording of “Turbocharging Legal Contract Transformation in the Age of Generative AI.”