Self-service contracting: The game-changer in legal efficiency  

Move over, HGTV. There’s a new type of DIY in town, but it’s not flipping houses, it’s revolutionizing the way we handle and process legal agreements. Introducing: self-service contracting. 

What is ‘self-service’ contracting?

Self-service contracting is like having a personal barista, but for your contracts: quick, convenient, and made just the way you like it.  

Imagine being able to create a contract without waiting in line at the legal department’s door. That’s the beauty of self-service contracting! It’s all about empowering the people who need the contracts – sales teams, procurement teams, and more – to create them on the fly, with minimal fuss and maximum speed. 

For the team at Kroll, self-service contracting means empowering business users and expediting their contracting. 

“If you’re like most organizations today, legal or negotiators are the engine of the train, and if that engine’s busy, then other contracts are waiting on the tracks to be pulled,” said Matthew Cooper, Senior Manager at Kroll, in a presentation at the 2023 Agiloft Summit. “So self-servicing is a way to enable contracting without creating risk for the enterprise.” 

CLM: The backbone of self-service contracting  

But how does one DIY their contracts? The answer is Contract Lifecycle Management (CLM) software. CLM software is like an operating system for your contracts. From drafting to signing, and all the way to renewals, CLM solutions keep everything running like a well-oiled machine. It’s about having all your contract info at your fingertips – milestones, statuses, and more. 

CLM isn’t a fancy filing cabinet, though. It’s a risk reducer, a money saver, and a compliance keeper. It’s the watchful guardian that makes sure you don’t miss those critical dates or slip up on the details. And, in the world of self-service contracting, it’s what makes sure that even when you’re going DIY, you’re not going rogue. 

How AI enables self-service contracting  

Self-service contracting is about more than just cutting the queue. It taps into the power of artificial intelligence (AI), simplification, and standardization. By using pre-approved templates and clauses, it reduces the redlining back-and-forth, streamlining the whole process.  

“The [CLM] system can help automatically route the contract to the one or more people who really care about the red lines in that turn of the draft, as compared to having to have a person review that and then farm it out to the appropriate people,” said Kroll Managing Director Michael Stevens. 

Utilizing AI also helps mitigate risk, he said.  

“AI is going to be capable of … analyzing the risk of that contract. So how much does that red line of each clause deviate from your preferred positions? How similar is it to one of your pre-identified fallback provisions for that cause? And then [it] creates a risk score. And that risk score can be used to impact your routing in terms of who it goes to and the level of person.” 

Using AI while self-service contracting also frees up your legal team to focus on what’s important, rather than getting bogged down in the details. 

“You’re going to have capabilities within Agiloft [CLM] to remove legal or the negotiator out of that traffic police role and let them play the role they really want to play, which is as an attorney. So they can take that hat off,” Stevens said.  

Important things to keep in mind

There are lots of appealing things about self-service contracting, but like with anything in life, there are some limitations and considerations to be made.  

Considerations may include the following:  

• The cost of automation: Designing, configuring, testing, and most importantly, maintaining each step in the automation process can prove costly, Cooper said. And, the more functions you automate, the higher your cost for maintenance will be throughout the lifespan of your CLM system’s contract, said Michael Adsitt, Kroll’s Director of Information Management and Governance. Thus, there must be a compelling business case to self-service your contracting. This business case could consist of time savings, enhanced compliance, risk management, or all of the above. 
• AI engine accuracy: AI engines can help offload some manual work, but no AI engine is perfect. Because some data needs to be as close as 100% accurate as possible, there should be a detailed plan on how to ensure the AI’s accuracy falls within users’ range of acceptability.  

• No one size fits all: The appropriate degree of automation will vary for each contract type based on volume, percentage on counterparty paper, risk/value to the organization, and many other factors. 
• Low tech is always an option: Users must decide whether each step in the contract’s lifecycle should be manual or automated and, if manual, who in the organization can be responsible for it. Dedicated, cost-effective teams that focus on data quality and contract review are often the right answer. 

Embracing the future

So, what’s the takeaway for legal departments out there?  
 
Get on board with self-service contracting and CLM or get ready for some serious FOMO. It’s not just about keeping up with the times; it’s about setting the pace. And with the right CLM system in place, you’ll be doing just that – leading the charge in legal efficiency and innovation. 

“With the future, being able to incorporate third party paper, being able to incorporate these way more complex contract documents is really… I mean, the amount of time and money that’s saved on just today on doing NDAs… is tremendous,” Cooper said. 

Remember, self-service contracting is more than a trend; it’s the future. And with CLM as your trusty sidekick, that future looks bright. 

Ready to dive deeper into the world of CLM and self-service contracting? Check out the full presentation and see how you can transform your contract game today!