Internal auditors at Hormel Foods had identified disparate workflows and processes among various business units that were creating inefficiencies, a top company lawyer recalled.
The auditors pressed for new methods, including how the in-house legal team processed contracts, which flowed to multiple functions across the company, Susan Olson, senior staff counsel on Hormel’s in-house contracts team, said Thursday on a webinar sponsored by Ironclad, the legal software company.
The chosen solution was to install a contract lifecycle management platform, to bring the same processes, workflow design and transparency level for thousands of contracts that flow annually through the food company, which employs around 20,000 people.
Hormel’s contracts team – four attorneys, paralegals and administrative assistants – has since shaved its contract-processing period by 75%, from around three months to three weeks, on average, Olson said. The team is within the Minnesota company’s larger in-house legal department.
Hormel migrated to Ironclad in August 2023. One “huge, huge requirement” for Hormel’s CLM selection was a system that would not require much customization work from the company’s IT department to implement, Olson said.
Hormel’s contracts generally concern procurement of turkeys, hogs and other ingredients for the business, along with producing non-disclosure agreements.
Previously, the in-house team used Microsoft Excel to track Hormel’s contracts – and found that system lacking in several ways, she said.
“It was absolutely, completely manual, every step of it,” Olson said. “When I started handling contracts I set up an Excel spreadsheet so I could keep track of where things were.”
One problem was that people sometimes forgot to update the status of a contract on the sheet, or who had the current review task. Updates to a contract weren’t always noted, or who had input the updates, she said.
“It was just manual stuff. Good times, right?” Olson said.
Several other business units have Ironclad access via licenses and “user adoption was surprisingly fast at the business unit level and frankly unexpected,” she said. Most employees have found that “faster turnaround times and visibility” on contract flows are their top benefits, which has aided adoption, she said.
For Hormel’s lawyers and paralegals, the ability to quickly see changes in contracts has been critical given that prior Word documents did not always track every change, requiring the lawyer to try to find each change, Olson said.
Hormel’s contracting team uses 52 workflows generated by the CLM, with two more being added in the next week, she said.
The company, with annual revenue of $12 billion, counts among its brands Jennie-O turkey meats, Justin’s nut butters, Skippy and Spam. Nearly half of the company’s stock, 48%, is held by The Hormel Foundation, to provide grant funds for the community of Austin, Minn., the company’s headquarters.
