Digital Transformation has been a major buzzword within the business community for years. Some of the world's biggest technology companies transformed how we live, work and play. Netflix transformed the way we watch television and movies. Uber is transforming transportation. Amazon changed the way we shop. This has permeated the business world as well with enterprise organizations leveraging digital technology to manage their core functions. this has turned companies like Salesforce, Adobe, and Workday into household names.
The corporate legal space has been a lagger in this area. It is still common for many in-house teams to store documents on a hard drive or server and negotiate in Microsoft Word. for many legal professions, the only major “new” technology has been the e-signature.
Times are changing. The marketplace has recognized a need to empower in-house legal professionals, with a ton of new and innovative companies emerging in the space over the last five years, including us at Clearlaw. The result will be a significant transformation in the way that organizations manage their in-house legal operations. Today we look at the future of the legal profession, focusing on in-house counsels and legal professionals.
One of the biggest changes we expect is that legal professionals will have a single, seamless experience to do their work, from editing contracts to overseeing legal risk to managing in-house templates. Processes will include automation and tasks will be completed once and syndicated across the organization. Perhaps most importantly, legal professionals will have data at their fingertips to empower their business partners.
Let’s take a look at a future in-house legal professional and see what some of their tasks look like in the future.
Reviewing contracts
As our legal professional starts their day, they log into the seamless experience we discussed earlier. They see a list of tasks, including three contracts that require review. All three have been evaluated by their contract intelligence platform, which dynamically compares those contracts to their legal playbook. Without our legal professional having to read the contracts, the contracting tool has determined that two of those contracts have acceptable terms to the organization. They have been automatically sent for e-signature. In the third contract, a term has arisen that violated the corporate playbook. Our legal professional opens that document and the tool has recommended two redline options, based on historical redlines within the organization. The attorney selects the appropriate one and hits send, sending the document back to the client prospect for review.
After reviewing contracts, our legal professional evaluates the last month of contracts, looking at trends within the documents. One trend they notice is that multiple organizations would like to leverage the state of Texas as the governing law. After looking into the corporate risk, our professional recommends to the COO that this is acceptable in the future and changes the legal playbook to allow for this acceptance.
Supporting the business
In a meeting with the finance team, the head of finance mentions that the organization is looking at a cash flow issue in the next few months. This comes in a combination of late payments from clients and long payment terms for clients. Our legal professional recommends some changes to support this, including increasing the late payment penalty and reducing the payment terms. The legal professional adds these to the corporate standard template and changes the corporate playbook so all legal professionals get the same guidance when supporting negotiations. Furthermore, the legal professional adds the VP of Finance as an approver within their legal tool on any payment terms outside of the guidelines, speeding up the review process for one-off client requests. Lastly, the legal professional leverages their tool to evaluate how many of these clients with extended payment terms are up for renewal in the next six months. Our legal professional exports this list and provides it to the customer support team, adding language attempting to reduce the payment terms during the renegotiation process. The process takes no more than an hour of the legal professional’s time.
Compliance
A new law has been passed within Europe around customer privacy and will go into effect later this year. While the organization’s standard template does not conflict with this new law, the executive team wants to understand if there is any risk within their customer relationships where they could be out of compliance and thus fined. Our legal professional sets up parameters to see if the law would affect any of their customer contracts. The search returns five clients where an accepted redline conflicts with requirements under the new law. That legal professional creates an addendum for those clients and works with the account management organization to update the agreements before the law goes into effect.
Compelling event
The firm has had a security breach, affecting some of its customers' data. While high-risk data was not compromised, the firm may need to let the affected clients know. The executive team would like to know which firms have data security breach notification requirements within their contracts, the individuals or departments that must be notified, and whether the security breach in question meets the notification criteria. Our legal professional runs a quick query to bring up all of this data and exports it to an excel file for immediate use by the business. Later, clients who had security breaches requested that the organization no longer use their logo or name in promotional material. The business development department wants to know if there are firms that were not part of the breach that allow for publicity and logo usage within their contract. Within a few minutes, our legal professional queried these results, eliminated the clients who were breached, and provided the list to the business development team for use while they update their marketing.