Decision Night, Legal Tech Edition
Enjoyed a candid conversation at Buying Legal Council (BLC) today with Jason Smith, who has followed the CLM market in tremendous depth for decades tracking 270 products in 115 countries.
Contracts Legal Management (CLM) tools remain the current gold-rush in legal tech with a very crowded field of candidates, even more true with the recent GenAI surge. That said the principles Jason Smith and I discussed apply any tool selection process.
Campaign Promises
Jason noted a significant portion of the products in his list have been acquired or no long exists. When you invest the effort in deploying a tool you want to see it grow with the market, so you want to ensure the tool is on stable footing financially and from a management perspective.
It’s important not to select a tool based on the promises of its sales team but to kick the tires and see with your own eyes HOW features meet your user requirements. Fact check promises and assess how they match to action. For this reason I’m a believer in substantive RFPs.
RFPs
The RFP process is similar for both legal services and legal tech, though in legal tech you tend to be more focused on the specifics of features and user interface.
Jason suggested that candidates can provide you with sample RFPs and recommended collecting from multiple candidates to review against your own requirements. I second that proposal and note that with GenAI inow makes that easy.
Once you have the proposals and an initial score, script a timed demo agenda to your requirements and the specifics of the features. Left to their own devices, any vendor is going to aim for the "happy path" demo which may skirt requirements that are off the path.
Sources
Before you finalize your ballot, however, you will want to do your due diligence to assemble a candidates' list. Typically, we start with suggestions from our internal stakeholders. We supplement the list through professional association listservs, reviewing past conversations and often reinvigorating a relevant thread to collect more recent information.
Next we leverage resources such as professional association tech directories, analysts, and legal consulting firms. Of course, you also have to understand where they are coming from and any potential biases. For examples, do they have any referral arrangements with specific vendors?
As you research the market you can further refine and specify both the business and technical requirements you’ve gathered from internal conversations and process mapping.
Single-Issue Voters
Individual stakeholders sometimes come to the RFP with a pre-determined outcome in mind. Problems that can come with this attitude are resistance to change, deaf ear to others’ preferences, and ignoring important features off radar.
There are many levers to address this issue, but to my mind the 3 most important are: (1) leadership commitment to selecting the highest scoring product that meets our budget irrespective of its legacy status and (2) composing your RFP committee carefully to represent key stakeholder group interests, preferably with folks who are going to check in with their base throughout the process, and just in case they don’t (3) Invite a broader group to see the demos and give feedback.
Road to Victory
Jason and I agree on 2 of 3 principles for victory:
- Put process before technology. Tech projects are always process improvement projects in disguise.
- Educate yourself and your stakeholders. Understand what you are voting for before casting your vote.
On the 3rd I agree with Jason's preference for utilizing the professional services of consultants over the vendor with caveats. It is absolutely true that some vendors' professional services' teams are not well-oiled machines in terms of implementing projects, particularly Agile projects. Consulting firm project teams often provide that discipline which saves you (the client) effort.
On the other hand, legal ops professionals are sometimes hired with the intent of reducing reliance on consulting services. If you know the tool space well and have project management professionals, it is certainly possible to contract directly with the vendor's professional services. Tools with fewer sophisticated business partners might also merit contracting directly with their internal professional services team.
Take-ways
As Jason noted the basic features of most CLMs are quite similar on the front end, though there are nuances which make it important to review those features against your specific use case requirements and company culture. To complement that process, as a take-away we provided a high-level requirements list, focused on system administration. While there is insufficient space here to review the full form, illustrated here are the first two to get you started:
Licensing:
- Is it by the use case or an enterprise basis? The ability to license by use case can often make initial deployment more attractive from a cost perspective, but those costs can mount when your use case catalog explodes.
- Do requesters and approvers need licenses? For example if requests are coming in from Salesforce, do users need a CLM license in addition to a Salesforce license? What about the SVP who approves contracts above a specific threshold? Do they need a license to approve the contract?
Security:
- Can you secure records by business and role? For example do you need for the VP to be able to see all of her direct reports' records? If the system only allows one to see the records one submitted or be an admin, that’s not going to work.
- Does security flow down to reports? You’d be surprised how many tools have reports as an on/off function. If you are a data-driven culture then everyone needs to be able to access their slice of the data, bit if you have a simple use case maybe only having the contracts team see reports, maybe that’s okay.
Also to briefly touch on Gen AI and NLP, for most of CLM history tools have handled in-house templates well but third-party paper with difficulty. GenAI is a breakthrough in overcoming a lot of 3rd party paper friction. For these tools, the best can connect to multiple repositories like your DMS, OneDrive or Google Drive and SharePoint. Many require that you upload to their cloud instance.
It's an honor to present at BLC which has raised the bar for legal procurement and continues to showcase innovative practices. Reflecting on all I learned today and will report back soon.