Silicon Valley-based law firm Wilson Sonsini and Juro, which provides a collaboration platform for contracting processes, have teamed up on a new research study, “The 2020 Tech GC Report: Enabling the Business Through the Crisis,” that focuses on the needs of GCs at high-growth companies in the current environment.
The report covers a range of topics, including the pressures on GCs to add value to their businesses and the impact of COVID-19, but some of the more interesting insights have to do with challenges related to contracting processes and the technology needed to manage them effectively. The 30 GCs, CLOs, and other in-house leaders interviewed for the report all work for high-growth, technology based companies. The challenges they face are similar to those faced in all industries, but some of those challenges are magnified by the need to keep up with the high pace of growth expected by management and investors.
The biggest barriers to adding value to their organizations? 67% say they are “buried in low-value work.” That work includes many of the manual processes associated with contracts, negotiation, drafting, internal approvals, and downstream storage and management of contract data.
The top three challenges the respondents identified for legal teams managing contracts were unscalable manual processes (53%); the proliferation of multiple contracting systems (37%); and the proliferation of too much third party paper (30%).
Manual processes are the bane of many in-house legal organizations, but they may be particularly painful for legal leaders at high-growth companies. Many of those processes were established before the company even had a dedicated legal function, the report notes. GCs are faced with cleaning up and automating entrenched processes, at the same time that the growth trajectory of the company is demanding more and more. From the report:
“It can be difficult to convince stakeholders to move away from [entrenched processes]; it’s served them well enough so far, so why should they change it? As a result, manual processes become a daily grind for lawyers who still struggle to get buy-in for process changes… This is why 37 per cent of respondents identified moving between multiple systems as one of their most keenly-felt challenges with managing contracts. Without a unified workspace, reducing risk and maintaining legal hygiene as the business scales becomes even more difficult. And when the next funding round arrives, and legal is charged with getting documents in order for due diligence, multiple systems and manual processes go from being an annoyance to a serious concern.”
What’s the antidote to those manual processes? Technology that automates and streamlines processes, but that also illuminates and unlocks value. Survey respondents identified three top things they looked for in a technology solution:
- 80% Easy Adoption: Tech has to be easy to use by legal teams, but also by the wider business. A key aspect of providing the added value that their companies demand is making legal systems and processes available to the wider business.
- 57% Integrations: Managing multiple systems is a challenge inside any business; to the extent that contract management software integrates easily with other commercial systems in use in the organization is crucial.
- 43% Access to Data. The value of contract-related technology is not just improved workflow; the real value is in the data that the technology provides access to. The data can be related to the speed and efficiency of the contracting processes, but can also be related to the content of the contracts themselves.
The value of these aspects of legal technology solutions is not limited to contract-related applications; these are universal benefits of the best technologies in use at legal organizations. But contracts represent untapped sources of both process improvements and of valuable data and insights currently hidden in contracts, and these GCs are increasingly turning to technology to tame processes and gain insights.
At Kira Systems, we strive to meet the three challenges above in our solutions. To encourage adoption, our system allows users to leverage machine learning and their own expertise to models to extract just the information they need from contracts, but without any special machine learning or data science expertise. We make integration easy through established integrations with several technology partners and with an API that lets customers build their own custom applications. And we help customers unlock the data in their contracts - data and insights that can be leveraged far beyond the in-house team, by other parts of the organization.
Is your organization experiencing these same challenges? We’d love to continue the conversation.