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Lexion Accelerate Contracts 3 Steps Playbook

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18 views9 pages

Lexion Accelerate Contracts 3 Steps Playbook

Uploaded by

Rian Alvin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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3 STEP GUIDE

to Accelerate Contracting
with Legal Metrics
by Jessica Nguyen, Chief Legal Officer at Lexion
Introduction

Let’s be honest. Most non-legal executives do not care


how beautifully crafted the indemnity or limitation of
liability clause is. Me and your fellow contract nerds
appreciate it, but your artful drafting will likely go
unnoticed by the C-suite.

Here’s what they do care about – speed. (I’m resisting the urge to make a
Top Gun joke and the need for speed. Oh wait. Too late for that.)

In-house legal teams have a difficult job. We’re asked to do our work as
fast as possible and with few resources. A unifying goal is no one desires
a slow or inefficient contracting process that keeps a business from
meeting its growth targets. The challenge is in identifying where the
inefficiencies are.

2
Due to lack of visibility and data, the in-house legal team is often
perceived as slowing down the contracting process. I’ve experienced this
first-hand. In past in-house legal roles, my team scrambled at quarter-
end to manually populate a spreadsheet with deal statuses to share with
leaders of other departments. To no one’s surprise (especially on the legal
team), it would show that most deals were stuck with the counterparty’s
legal department or another internal department’s sign-off.

How was that data going to help us close contracts faster? It probably
wasn’t. Did it communicate much about the status of the contract or help
set expectations? Not really. Today, there are myriads of contract data
points that can be collected and reported on to help accelerate your
contracting processes.

Follow these three steps and you will soon be viewed as a collaborative
and strategic partner that helps the business accelerate the contracting
process. The key is coming to the table with the right metrics (data is the
language of business), processes, and tools in place.

Accelerating contracting = driving revenue growth.

3
01
Know What to Measure
The first step to accelerating the contracting process is to know where in the
process you have opportunities to improve. As a bunch of smart people have said,
you can’t improve what you don’t measure, so start measuring.

Ten metrics focused on the contracting process include:

Number of deals touched by How long a contract is in


01 06
legal, broken down by type counterparty review, if on third-
of contract. annual contract party vs. your own template
value, and segment (you
can link your team’s work to
revenue, which is key)

Number of deals legal works How long a contract is in


02 07
on that are third-party paper internal legal review, if on third-
vs. your own template party vs. your own template

How long it takes to complete Average time under legal


03 08
the contract review from review stage for a particular
start to finish contract review type

Average annual contract value Average time under internal


04 09
of a contract negotiated business review stage for a
by legal particular contract review type

How long it takes to complete Average time under


05 10
the negotiation of third-party counterparty review stage for a
paper vs. your own template particular contract review type

4
If you haven’t been tracking and measuring this data, now is a great time
to start. You can do this manually by creating a spreadsheet tracker.
Though this method gets the job done, it’s incredibly time-consuming,
tedious, and definitely not the best use of your time. Honestly, this task
often gets deprioritized for busy legal teams, and this manual tracker
does not stay up to date (been there, done that). There’s a better way.

Such as a flexible Legal Request Tracking system plus Contract Lifecycle


Management (CLM) solution like Lexion that automates and tracks
the steps of the process for you, saving you hundreds of hours and
thousands of dollars every year (or more). It even automates reporting
on these contracting metrics and other metrics you desire about your
legal operations.

Every department of an organization (including, Finance, Accounting,


Human Resources, and other G&A functions) has a tool that automates
reporting for the unique needs of that department. It’s time for the legal
department to have that tooling too.

5
02
Analyze the Data
Once you have a few months’ worth of data points, you’ll have a great
baseline of information to start your analysis.

You may not have control over how long counterparties take to review
redlines, but you can at least give the rest of the company realistic
expectations of how long things do take, improve accuracy of forecasting
revenue, and offer suggestions for areas of process improvement.

Typical inefficiencies I’ve experienced (and so have our customers) occur


during the handoff of contracts between a submitter of a request and
legal. These include the back and forth flow of email or Slack messaging,
the lack of visibility of tracking, and no deal status or stage reporting at a
more granular level than “under review” or the like (which leads to the deal
status spreadsheet scramble). When the business sees “under review,” it’s
automatically assumed the ball is in the court of their in-house legal team.

At Lexion, we don’t have these assumptions because it’s always visible to


Sales and other departments where a project stands, its stage, last activity,
and more thanks to our use of Lexion. I’m also empowered to proactively
send out custom and weekly reports to Sales leadership of all customer
deals under counterparty review.

6
03
Use Data Insights to Improve
and Accelerate Processes
The metrics will highlight the areas of slow down, such as counterparty review
periods and the extended review time when negotiating on third-party paper.
This will be an opportunity for you to collaborate with other departments to
strategize on ways to create urgency with the counterparty’s legal department,
increase usage of your own contract templates, set realistic (okay, more
realistic) expectations on sales cycle and contract negotiation timelines, and
align on a prioritization framework (because everyone thinks their unique
request is the most important).

7
You can also adopt tools to streamline and automate some of your contracting
processes, metrics capturing, and reporting. The key to successful
implementation and adoption of new tools are:

Minimal change management and meeting the rest of the business where
01
they are without requiring them to learn another tool or change the way
they work.

Limited IT support required to implement the system because your IT


02
team has a lot of projects on their plate that are a higher priority.

Minimal change management and ease of setup are pillars of Lexion. I’d
be thrilled to show you a demo of all the Lexion features that will help you
accelerate the contracting process.

In the meantime, here’s a glimpse of two key features:

Centralized Dashboard: All tasks (contract or other legal questions)


01
and their respective stages are instantly viewable on a central dashboard
so you have a home for all of your tasks, can quickly jump to actionable
items, and don’t have to waste time sifting through a patchwork of emails
to find deal status or the current draft of a contract.

Email-Based Task Submission and Approvals: From email (e.g., legal@


02
company.com), the rest of the business can kickstart a contract review
request and engage with legal solely from email. Lexion also sends the
approver an email and captures their emailed approval or rejection so
they never have to leave email.

01
02
03

8
If you’d like to see more tips like these, I wrote a
playbook just for you. Read The General Counsel
Playbook to get lots of additional tips to kickstart your
new job on an in-house legal team.

Read Playbook

About Lexion
Lexion is an incredibly easy-to-use contract management system.
We’re on a mission to make legal teams highly productive and happy,
by accelerating contract review and eliminating busywork through
automation and AI. We use best in class natural language processing
technologies to make it 100 times easier for legal teams to find what’s
in their contracts and automatically stay organized. Best of all, Lexion’s
email-centric approach, and legacy contract onboarding, makes
implementation and adoption easy.

We built Lexion at Microsoft co-founder Paul Allen’s artificial intelligence


research institute (AI2) and are backed by the same investors that
funded OpenAI (Khosla Ventures), helped launch Amazon (Madrona
Venture Group), and have advised Google (Wilson Sonsini). With a
top notch and experienced team from Microsoft, Facebook, Google,
and Amazon, we built a company that CB Insights ranked the #1 most
promising AI legal tech startup in the world two years in a row (2020,
2021). Most importantly, fantastic brands trust Lexion to manage their
contracts: Outreach, OfferUp, Blue Nile, and many more.

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