It’s that time of year for predictions. I have previously suggested that law firms with outsourcing practices have an opportunity to help their clients not just draft complex contracts, but also manage them once signed. In 2005, we will likely see more corporations adopt contract management systems.
Many corporations already have deployed contract management software (for example, diCarta lists customers such as NBC, Kraft, and Walgreens; imany lists Honeywell, P&G, and Scripps; Nextances lists Genzyme and Fireman’s Fund; and Upside Software lists JCPenney and Boeing).
Cisco Systems’ law department, probably the leading law department in the use of technology, recently deployed contract management software according to the Corporate Legal Times magazine (Sept. 2004). Eliminating the Paper Trail reports that the law department created an automated system, “Click-Accept.” It “automatically generates, customizes and keeps track of distributor contracts – as well as 30 other types of high-volume contracts.” The system automates the contracting process from end-to-end, so that no lawyer work is necessary and signing occurs digitally. Cisco plans to expand use of the system over the next few years. To date, Click Accept has processed 500,000 contracts and saved an estimated $4 million. According to a news item on Cisco’s web site, Click Accept has freed up two full time workers (presumably lawyers?) for other work.
The challenges of contract management – as in many intersections of law and technology – are primarily ones of process and culture. But with savings like this, it seems safe to predict more companies will adopt contract management systems. That much seems inevitable; more interesting will be to observe whether any large law firm figures out a way to capitalize on the trend.