Can Law Firms Tap Latent Market for Corporate Contract Management?
I often wonder why more corporations do not deploy enterprise contract management systems. These systems manage the entire contracting process, including negotiation, drafting, execution, and rights management. Already in 2004, I suggested (blog post) contract management was a big opportunity. The opportunity remains large.
The Corporate Executive Board CEB’s [Corporate Exectuive Board] Legal, Risk and Compliance group blog post Contract Management Technology: Ten Core Functionalities (7 Jan 2014) focuses on system features. I was struck, however, by its introduction:
“While system costs and budget constraints were impediments, many more [members] told us that a lack of knowledge about technology options and concerns regarding access and implementation underscored their reluctance.
Whether building a bulletproof business case for budget or discovering available system functionalities, the critical first step is understanding your organization’s unique contract management needs and selecting a system which responds to those needs without extensive customizations and prolonged implementation.” [Emphasis added.]
Large law firms can capitalize on this gap in corporate performance. Sure, they have Big 4 and consulting competitors. But Big Law has unique access to general counsels, who often are veto-holding stakeholders in contracting.
Partners will, of course have questions. Can we bill for this? Is it really legal advice? Do we know anything about systematic management of contracts?
Smart law firms would ask these and other questions and then find answers so they could develop new business. While this effort may start closer to consulting than to legal work, it will likely surface a reasonable number of contracts that actually do require high-end and probably even hourly billable counsel. Moreover, for clients who want better value from firms, this seems a good way to add it.
If companies – whether aided by their outside counsel or BigLaw competitors – adopt systematic contract management, will they be able to do less law? Or if not less law, enhance revenue and compliance?
What am I missing? Why does the gap persist?
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