Many legal solutions, like Contract Lifecycle Management (CLM), are tied to customer relationship management (CRM) systems or to document management (DM) systems. As the role of the corporate legal department has expanded, it’s clear they could be better served by a legal-focused dashboard with a seamless connection to supplier management, procurement, and compliance. A review of The General Counsel Report 2022 and ACC 2022 Law Department Management Benchmarking Report makes four obvious reasons the corporate legal team must reconsider its available toolkit, and its systems work within other critical corporate disciplines.
1. Broad Leadership Responsibility
According to the ACC report – Corporate legal departments are now responsible for compliance, contract management, governance, and invoice review. “At least 90 percent of departments for which the following work areas are relevant handle them internally, including compliance, contract management, corporate and governance, document management, invoice review, legal operations, privacy and security, records management, and regulatory.” So, the workload and the breadth of responsibility have increased in the last two years such that corporate legal departments require systems with a line of site across corporate goals, contracts, supplier compliance, and regulations. Corporate legal will need to drive alignment across these siloed organization divisions and confirm that procurement contracts are optimized to meet corporate goals, and track the governance and compliance related to the supply chain.
2. Need for CLM Transformation
The ability to standardize, review, and track contract terms is vital to managing supply chain risk. Contract terms written with the best intentions of driving supplier alignment are of no value if without processes in place to confirm these terms are being met and the organizations remain aligned. It is essential to have a tool that makes it easy to understand the nature of the relationship, the type of payments, the allowed invoice terms, required reporting and disclosures, and any constraints. The top areas of tech investment were contract management (40%), matter management (23%), and compliance software (13%), followed by e-billing (10%) and e-discovery software (3%), based on responses to The General Counsel Report 2022. COVID-19 response and increased remote work highlighted an increased urgency to modernize.
“We knew, for example, that we needed a new CLM platform, and the pandemic accelerated the implementation of this tool. That single source of truth concept highlighted the need to buy a tool sooner.” There is value in connecting a contract’s practical terms and dates to supplier invoicing, finance, compliance, and governance. Legal teams today need a CLM that connects data points across CLD responsibilities and isn’t just a thin layer sitting on top of a DM or CRM system.
3. Focus on Diversity
Improved tracking has driven awareness of the need for improved Diversity, Inclusion, and Belonging programs in corporations – much of which is now the legal team’s responsibility. The General Counsel Report indicated that “100% of GC surveyed have some role, oversight or priority focused on DIB initiatives for their company and/or legal department. This is up from 71% from the previous year.” The ACC 2022 Law Department Management Benchmarking Report noted, “There has been an uptick in the number of departments that track outside counsel diversity and in the number of diversity metrics evaluated.” Visibility into overall corporate diversity and outside counsel spend with certified diverse firms and companies will clearly provide a more comprehensive understanding of improvements and achievements of DIB goals.
4. Expanding Compliance Demands
Corporate legal departments are squarely in charge of risk reduction and management for the organization. This requires setting and overseeing policy as well as day-to-day involvement in business commitments, public communications, and supply chain events. More than ever, who an organization does business with and how it manages relationships and processes affects public perception and brand value.
As documented in the General Counsel Report, “Environmental, social and governance issues are so critical because [ESG] is a key series of themes in which investors are interested, and regulators are becoming stricter about the clarity of the auditing nature of your reporting on these issues. If you don’t report correctly on ESG, it could be considered fraud, and I am increasingly worried about that.” Close oversight and awareness of the supply chain are necessary to eliminate and mitigate environmental, social, and regulatory risks. The legal team needs a dashboard and view of supply chain data that provides accurate and up-to-date status.
As the GC and the corporate legal department have broader responsibilities to actively track and deliver against Diversity, Supplier Invoicing, Compliance, and Governance, it is clear they need a modern toolkit that connects all relevant sources, produces accurate reports, provides up-to-the-minute dashboards, and delivers constructive insights. It is time for corporate legal teams to consider new tools that tie together goal, supplier, payments, and compliance tracking. This seamless connectivity across disciplines is something that the iQuantum platform does well. Click here to learn more if your organization needs to transform its toolkit in any of the four areas mentioned above.