How a major manufacturer unlocked efficiency and cost savings with CLM case study

The challenge

When Melody Smith, Assistant General Counsel at Klein Tools joined the organization in 2016, she became the third member of a very lean legal department. With only three attorneys, the department faced a herculean task— the team were given a corporate directive that all contracts undergo legal review and approval. “And when I say all contracts, I literally mean the million dollar automated cell manufacturing machine, to Steve, who cuts the line at Mansfield, Texas, we review all of those contracts and approve those,” Melody said. The team had to review approximately 5000 contracts a month.

Without any contract management process in place, the problems were inevitable. Turnaround for contract review was slow as resources were stretched thin and processes were carried out manually. Plus, Klein Tools did not have a central repository where all the information was stored, further lengthening the approval process. “It’s mind boggling how much time we were wasting with just the inefficiencies in the contract review process,” Melody said.

The lack of transparency over contracts wasn’t just a question of efficiency for the legal department but it also posed a significant monetary liability to the organization. For example, expensive contracts with auto-renewal provisions were being renewed since there was no way to track active contracts.

Since there was no way to track contracts, many contracts did not go through the right renewal process and were being signed off by employees without the right authorization.

“One of the key features that led us to choose Agiloft was the idea of we really didn’t know what we were doing. We looked at a couple of out-of-the-box systems that were rigid. And that lack of flexibility I can say was personally scary for me when you’ve never done this before.”

– Melody Smith, Assistant General Counsel at Klein Tools

When it became clear that Klein Tools needed a CLM system, Melody turned to the IT department to develop a solution. That, however, didn’t work out as planned. “It just did not function and did not have the adaptability that we needed, as a legal department, and did not have the workflows that we needed—and quite frankly, really slowed down the process rather than speeding it up,” said Melody.

So, Melody began by reaching out to vendors like Agiloft and setting up demo meetings with the legal team as well as other departments. Once other teams saw how the solution could work and how the features could help them, gaining internal stakeholder buy-in was easy—not only for the funding but also for the resources to implement the CLM system.

The solution

To implement the solution properly and comprehensively, Klein Tools are rolling out Agiloft CLM in phases. The plan is to implement it in three to four phases, but they also understand that Agiloft CLM’s flexibility provides them the choice to get into additional phases as business needs necessitate.

The legal department worked closely with the Agiloft implementation team to develop the right workflow processes.

“With the auto-populated option that we have in Agiloft CLM — when we’re using our own paper — we [can] now send out NDAs, in less than 30 seconds.”

– Melody Smith

Agiloft’s easy-to-use solution also meant that they could develop their own processes without constantly consulting the Agiloft implementation team—giving them the freedom to explore the platform and find what suits them.

“We were maybe five months into using it at a corporate-wide level, and I think maybe we’ve had to rely on Agiloft [team] maybe three or four times during that time and the majority of the stuff we’ve been able to do ourselves,” Melody said.

At times where the Agiloft team were needed to make changes, the response was swift. “… And so we went back to the Agiloft team and said, ‘Okay, we need to change these things’. And they were able, obviously, to do that within 10 minutes.” Melody said.

For their next steps, Klein Tools are looking to streamline their contract workflows and eliminate redundancies. This includes integrating Agiloft across Finance and IT to drive efficiency and visibility. Ultimately, the aim is to have employees across departments to have a streamlined review process and enable transparency via contract management dashboards.

The impact

Despite being only in the first phase of Agiloft’s implementation, Klein Tools are already seeing noticeable changes.

With the right approval process in place, legal no longer has to worry about the wrong people receiving contracts and unauthorized employees signing off these contracts.

The most noticeable difference has been the quick turnaround time in getting contracts approved, previously from two to three days down to mere minutes. “There are some contracts—especially if it’s on our own paper, and the other party is already reviewed— once I push it out for e-signature, I stamp my approval, the external third-party signs, the internal party signs, and we’re done usually with within 60 seconds,” Melody says.

The auto-populate option that comes with the solution has also come in handy in for the legal team. “We now send out NDAs in less than 30 seconds. It consists of typing in the entity name and then it’s automatically populated and sent to them. So, it’s amazing when we’re using our own paper, the length of time that it takes for us to get contracts out the door,” she says.

A central repository and dashboards for employees have also eliminated many of the problems they faced before. Previously, legal were constantly getting a barrage of emails inquiring the status of contracts. Today, the end user only needs to log onto the platform to track the contracts and see where it is in the review process.

Challenges

Lack of central repository

Unclear approval processes

Potential liabilities from unclear
contract status

Lack of structure and transparency made
implementing systems difficult

Benefits

Cut down approval process from 2-3 days to minutes

Enabled visibility to better monitor and
track contracts

Drive operational efficiencies

Eliminate compliance and liability risks

Learn how Agiloft can impact your business.

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