The in-house legal team at National Life Group bolstered its budget for a contract lifecycle management system by making it a joint project with the IT department, a tactic that helped lead it to a successful implementation, the company’s legal operations manager said in an In-House Connect webcast.

“IT has the bigger budget, so by collaborating with them, my budget got a lot bigger,” said Lindsay Staples, National Life Group’s senior manager of legal operations and paralegal services. “That was a really big benefit.”

The experience of National Life Group, a financial services company with specialties in life insurance and annuities, is a good illustration of how CLM must be thought of as a technology that impacts the entire organization, not just the legal team, said Evangelos Apostolou, general counsel at Sirion, a legal technology company, because contracts are central to virtually every function in the business.  

“CLM happens at the enterprise level or it doesn't happen,” he said. 

Sales, supply management, finance, governance and compliance are the other big CLM users in a typical organization, he said. 

National Life Group’s legal team includes 12 attorneys who specialize in contracts. The company processes almost 600 of them a year, most of them on third-party paper involving technology vendors. 

The legal department already had a matter management system and could track contract turnaround times but it wanted visibility into what was happening during the typical 90 days it took to get a contract to signature.

“We had no idea where in the workflow that turnaround time was,” said Staples. “We were hearing the lawyers take too long but we lacked visibility into where the bottlenecks were.

A CLM solution was seen as giving them that visibility and also helping with post-signature contract management to stem value leakage.  

Balancing act

The team reached out to the CIO to be part of the effort from the beginning, with a plan to get other function areas involved later, once implementation began, said Staples “We have a very innovative CIO,” she said. 

Were she to do it over, she suggested, she might consider bringing some people from other function areas in earlier so they’re more prepared to use the system the way it’s intended to be used, but when, and how much, to bring in other people remains a tough question to answer.

“There’s an argument for not involving other stakeholders too early, because that could create as many problems as it solves, but leaving it until too late is also a problem,” said Apostolou. “So, it’s a balancing act. It depends on having a sense of your own organization. Collaboration is not a nice-to-happen; it has to happen.”

Working with IT, Staples put out a request for proposal and narrowed the review to five vendors. This was back a few years ago, when CLM companies were just starting to add AI capabilities.

Staples’ team had two must-haves in any CLM solution they chose: AI on the front end and a robust contact management piece on the back end — that is, post-signature. 

Staples’ team wanted the AI to help it create a contract playbook, which it didn’t have at the time. “We had a Word doc that had some provisions in it that we liked,” she said. 

Having a playbook clause library was key for the company’s general counsel and one of the arguments he made to justify the cost with the executive team. 

“Using AI in CLM to identify common clauses is a huge risk mitigator,” Staples said. “That was a great business case for our general counsel.”

Once implementation began, Staples brought in what she calls change heroes — attorneys she could count on to use the system as it’s intended and help pave the way for others to use it. 

“We have one change hero who uses the redlining function well,” she said. “Some think AI is the devil. That makes usage harder to push through.”

It's also a good idea to bring in some naysayers early, because they can help identify problem areas that would keep people from using the system as intended and get those addressed early in the implementation process, said Lucy Bassli, founder of InnoLaw Group, a consultancy. 

“You need naysayers on your list of change heroes to test how hard it will be,” she said. 

There’s also an argument to be made to bring in people from other function areas during implementation, while the system is still being piloted, even if their use of the system will be less than that of other teams, because they still need to be invested in the outcome, Staples said.

“We didn’t engage with the rest of the enterprise about it,” she said. “We thought we could just bring them along. But that’s much harder, because they’re not in it all the time — one template. It doesn’t matter to them. We should have done much more communication with the rest.”

Now about three years into implementation, the legal team is benefiting from it, especially the redlining function. But it’s only now starting to get useful data from the post-signature management piece, because it’s taken this long to get the amount of data that can deliver insights. “Now we can make some little tweaks,” Staples said. 

You can expect implementation to take at least nine months, and realistically much longer than that, said Apostolou, because the system must be integrated with the entire enterprise. But, on the positive side,  the benefits will accrue as you go along and increase over time. 

Bottom line: Selecting the system is the easy part. Matching what the users want with the right system is just a small part of the challenge. The much bigger challenge is the change-management piece that involves getting people to use it the way it’s intended to be used. If you don’t get broad buy-in, the system won’t do what it’s capable of doing and won’t provide the benefits you’re paying for. 

“Change management is 99% of the success,” said Bassli. “Requirements gathering and alignment of features is 1%.”