Approaches to Contract Management

Be a BFF to the CFO: An Interview with Faye Moran, Head of Legal Operations at Booking.com

In this interview with Faye Moran, Head of Legal Operations (Interim) at Booking.com, in partnership with ContractWorks, Faye shares first-hand experience of multiple different approaches to contract management.

“I’ve seen lots of demos and pitches of contract management software over the years, but it’s often hard to differentiate them at the end of the day and I wonder how much functionality is really of use to legal teams. I suspect the 80/20 rule applies – you don’t use 80% of the functionality of the tech you buy”

Regardless of sector or business, one of the issues most organisations have in common, she says, is that no one has really nailed the contract lifecycle management (CLM) process. This is surprising given the obvious – and not so obvious – value in their contracts.

Part of this is down to the way that many organisations, particularly large ones, operate in silos, each with their own approach and attitude towards contracts. Procurement and HR, for example, will deal with very different kinds of contracts and will take a very different approach to how they prepare and manage them.

“The lack of a contract management system and clause level data can be critical. Without clarity, you don’t know what’s been agreed or why it was agreed. If it all blows up two years later, Legal have to try and unpick it all. Better systems and information might prevent some of that,” says Faye.

A wider perspective

From the perspective of the in-house legal team, an added consideration is the fact that the Legal team may, depending on their remit, only benefit minimally from having all the contracts and contract data in one place. The big beneficiaries on a day-to-day basis are the other parts of the business, such as the sales team or the finance team, for example.

“This helps to explain why, in some organisations, Legal see their role as quite narrow, with a focus on drafting documents before signature. Whereas if you think about contract management as a whole, it is much broader,” says Faye.

Finding a leader, like a CFO, who is willing and able to drive forward an improved contract management process can be a challenge, she says. But by not doing so, and in persisting with a more piecemeal, siloed approach, opportunities are being missed.

“Legal is only one stakeholder and is often expected to simply draft and review contracts. But there’s a much bigger opportunity for Legal to take the commercial initiative here and really be seen as the proverbial business partner and drive contract management forward,” she says.

Remotely consistent

As the Covid-19 crisis moves into a new, less critical phase, businesses are daring to look to the future once again and think about how things have changed. One of the biggest transformations is expected to be in working patterns, with remote working becoming a much more accepted model.

Faye hopes this may lead to more attention being paid to the way documents are stored and accessed by remote teams, which, she suggests, has tended to be relatively ad hoc in a lot of organisations. Different teams might store documents in different ways, with no consistent structure or naming conventions. Anyone looking at a folder of dozens of documents is likely to struggle to quickly find what they are looking for. Some teams might prepare summary spreadsheets, but it is rarely consistently applied across a business.

SharePoint and Google Drive can get you so far, but without some sort of protocol to govern precisely how they should be used to store documents, they can often create more confusion, rather than less.

“It came to a head at the start of the pandemic when everyone switched to remote working. People realised it was much harder than it should have been to find copies of signed contracts and answer questions like ‘where are our liabilities?’, ‘what do our force majeure clauses say?’ or ‘how quickly can we or our clients terminate these specific contracts?’,” says Faye.

The answer is often going to include tech. Finding a tech solution that makes it easier to extract and query this information across potentially thousands of contracts. But it is also about mindset. Both legal and finance functions need to treat the information in contracts as data, not words, so they can manage it like data and report on it like data, in a more commercial way.

That doesn’t necessarily mean running out and spending thousands on a digital CLM system, however.

Three Key Takeaways

  1. Contract management is much bigger than legal. Help the business to understand this basic but crucial truth.
  2. Consider creating a ‘contract director’ role, tasked with managing the CLM process and bringing stakeholders on board across the business.
  3. Become best friends with your CFO. Help them understand that investing in the CLM process means less risk – particularly financial risk

Read more about contract management solutions in our recent report with ContractWorks.

ContractWorks

ContractWorks

ContractWorks
ContractWorks solves a simple but surprisingly commonplace problem for in-house lawyers everywhere: “We don’t know where our contracts are and we don’t know what’s in them.” We work with in-house legal teams all over the world, helping them take control of their contracts – by moving them away from spreadsheets and shared drives and giving them visibility of key obligations, costs and dates. With low, transparent pricing, ContractWorks is simple to use, easy to adopt and fast to implement. Every package comes with unlimited users, 24/7 support and a suite of helpful tools, including built-in electronic signature, to help you do more with your contracts, using few people, less time and a smaller budget.