THE INTERSECTION OF LEGAL AND CONTRACT MANAGEMENT

In this episode of The Contract Lens Podcast, Allison Martyn, a Malbek Business Analyst, talks with Edo Bar-Gil, CEO at Lawflex Designed Solutions about the intersection of legal and contract management with legal contract management software. They start by discussing the competing requirements that contract stakeholders sometimes have even within the same organization and the consequences of not involving all the right people from the get-go. Edo shares the reasons that "needs mapping" is so vital and underscores why you have to be honest and candid during that process, however uncomfortable it may be. He explores why understanding legal terms is necessary for contract professionals even though they may not have a law background, and conversely he advocates for legal learning the language of business. At the end of the day, the goals are the same — mitigate risk and increase revenue. So grab a glass of wine, and let's talk contracts!

Intro:
Welcome to The Contract Lens Podcast, brought to you by Malbek. In this podcast, we have conversations with Contract Management thought leaders and practitioners about everything contracts and its ecosystem. Today's episode examines the intersection of legal and contract management with special attention to where those interests align or may come into conflict in legal contract management software. The discussion is led by Allison Martin, a business analyst at Malbek, and she is joined by Edo Bar-Gil, head of legal operations at LawFlex, which offers businesses an efficient and reliable way to temporarily expand their legal capacity by hiring experienced lawyers on a short-term basis. At LawFlex, Edo uses his unique skillset to redesign in-house teams, making legal a partner to business. So now it's time to relax, grab a glass of wine, and let's talk contracts.

Allison:
All right. Edo, thanks for joining us today. We wanted to cover the topic of, a rather challenging topic of the intersection between Legal and between Contract Management. So you can have different groups that are at odds with their goals for their CLM. Legal groups tend to want very detailed information to be captured on every single contract, and Sales users, for example, tend to want to just get through the process. They just want to put in the bare minimum information and then just get on with their lives and get on with selling and not necessarily with the contractual details. And that can have repercussions on down the line.

Allison:
Other groups might be somewhere in the middle, contract administrators tend to want the useful information, but they don't necessarily want as much detail as legal administrators do, so it just kind of depends on where you fall in that spectrum. And the management of course, they want all the data, they want everything available to them in nice consolidated, summarized reports, and they want to know that that data is accurate 100% of the time. So there's really an intersection that's happening within that CLM program, where you have different users coming together, who all have to work within the system together and sometimes compromises need to be made there. So Edo, I'm curious to learn from you what your experiences have been with legal data versus contract management and where those kinds of discrepancies can happen.

Edo:
Cool. This is a great question. I will answer it in one line, one sentence, just so we can focus on something, but I guess it's a balance between all the different stakeholders, and eventually your focus is, let's call it the business need and the business requirements. So yeah, maybe Legal would like to have all the details and defend you and everything, the names and everything. And on the other side, there are the salespeople who want to have the minimum necessary, but eventually if you don't have the necessary data, you won't have a proper database that you can use.

Edo:
I can give examples for you for the usage of proper database, but one example is that you can do a very quick MNA process. If you know all the agreements that have non assignment or unlimited liability in a click of a button, and this is the goal, by the way, also of the sales and legal and their management and everybody. But I guess that the main issue here is to balance. If you create something which is very long and everyone has to fill in 50 parameters of data, even the Legal would be exhausted with doing that and no one will use the system.

Allison:
Yeah.

Edo:
And if you only complete the names and the addresses or something like that, you won't have a proper database. So I guess the main goal is to kind of balance between everyone and to expand the need, the business need. For example, as I said, if you are doing an IPO or even if you need the database, for example, just to note all the contracts with the limitation of liability, even the salespeople can understand it. I would like also to say one more note. I think that when you do that, on the one hand, you need to ask all the stakeholders because everyone has a different perspective, but on the other hand, there should be someone who is making a decision.

Edo:
In that case, it should be the legal, and if I may say, a person like me, a Legal Operations consultant which would be, in my opinion, an outside consultant that has no constraints or politics or something like that, you create a very good brainstorming discussion. Eventually, it will get to a point where you come to an agreement, but I do want to say that the legal must take the lead and not technical people or the people that don't have necessarily the right point of view of the entire process, and the impacts of having or not having specific data.

Allison:
So Edo, you brought up a really great point that I want to expand on, is that identifying all of your stakeholders is really key to the process, and preferably identifying them early on. I think everybody's probably been involved in projects. I know I certainly have, where you get to the end, you get to your UAT, or even after go live which is the worst case scenario, and somebody pipes up and says, "Well, what about my group? You didn't talk to us and we to have X, Y, and Z in our system." And I've been on those calls where there's just dead silence on the line because we missed those stakeholders early on in the process.

Allison:
And that can have really severe consequences later on. So I wanted to support what you said there, that identifying your stakeholders early on is key, talking to those groups and finding out exactly what you need. And as you said, if legal ultimately is running the CLM, you might not need to incorporate all of that, or you might not end up taking all of that information, but to know who they are and to know what their requirements are, is a really huge part of that right upfront. And you want to do that as early as possible.

Edo:
Correct. I agree with you 100%. I think that there are two sides of this coin, if I may say. First, what you said, you need to make sure that everyone is in the loop. By the way, this is why whenever I do a project, I insist on having a very short and focused needs mapping project, like kind of preliminary project where you discuss with all the stakeholders and then in 99.9% of the cases people say, "Oh, you need to talk with three people." And I end up with 10 because they didn't think about other stakeholders, and when someone is not in the loop he feels neglected, and this is not the way to make people happy.

Edo:
And on the other hand, and if you want a project to be successful, you need to make people feel like they are part of the project and also committed. And if they are not heard, no one will be committed. But if you are heard, even if someone is not accepting what you have to say, but he hears you and he understands what you need and you decide, "Okay, we can take A, B, but not C and D." This is something that makes people feel committed and help with the project. So, absolutely.

Allison:
Absolutely, and having people committed to the project also helps with user adoption. And this is something that I talk about a lot with my clients is that you want as much user adoption on the end as possible. And people who feel like they had been neglected through the process, or they weren't heard are going to be dissenters and they can cause you a lot of problems, especially if they're, back in the old days when we were in the office, if they were at the water cooler and saying, "Oh, well that horrible new program, I don't like the way that it does this." And they can take someone who previously was happy or at least ambivalent with the program and make them unhappy with it, and they can really cause a lot of problems for you. So yeah, you want to avoid that situation for sure.

Edo:
Absolutely, and by the way, when you deal with legal people, sorry to say it, I'm also a lawyer, you can double or multiply by I don't know how much the feeling that people get when they deal with Legals. So if you keep them out of the loop or something like that, basically the baseline is that they hate or dislike the legal people. So yeah [laughs].

Allison:
I mean, there's lawyer jokes for a reason, right?

Edo:
Yeah, absolutely. No, because you usually talk in a different language and understand limitation of liability and many other terms, but if you talk like in a business way and talk to them and understand their actual needs, they understand that you are also normal people and not only a lawyer.

Allison:
That's a great point to humanize yourself and to contact on a human level and not necessarily on a lawyer client level. Yeah, that's great. Do you think that there is a need for clients, even those working on the project who are not legal users to have at least a basic understanding of legal terms and of what's important in legal?

Edo:
Absolutely. Absolutely. The goal of every project and specifically projects with CLMS, contract life cycle management system, is to empower the people. By the way, when I do needs mapping processes, I always tell people, "Be honest. Talk about your pain points, because the goal is to empower you." If you don't say, "Well, I don't get the right service, or there is a bottleneck every time I approached the legal team," we will not be able to solve these issues. Never. So you need to come out, you need to say what you feel. You need to be honest, and there is a line between empowering people and giving them something that they cannot deal with. I don't think that everyone in the company should have the right to decide on the limitation of liability. It doesn't make any sense, people have different rationalities and so on, and they can make bad decisions.

Edo:
For example, three options to decide, I don't know, payment terms. 30 days, 60 days, 90 days, and I tell them, "If you choose 90, it's better for the company. If you choose 30, it's fine but I prefer it to be 60." They feel like they are part of the process. They don't need to approach you with each and every simple question like 30 or 60, and you can give them more and more power. For example, if the company should indemnify someone or not, this is something that should be discussed with the CFO and the legal, and the CEO sometimes, and so on. But there are many, many other things that people can decide and negotiate on. And I don't feel like, in the past it was like only legal people can talk about it but I am a true believer in empowering people, and legal is a language, and you can talk legalese even if you are not a lawyer, as long as you understand the limitations.

Allison:
Yeah, that's a good point. Anyone can learn to speak the basics of legalese. You don't have to go to law school and get a degree in all of that. Personally, I've been a contract manager in the past, and I did that for quite a while, and I got pretty good at legal terms. And I've never been to a single law class ever, but I can talk about indemnity with most people.

Edo:
Correct. And I'm happy for you that you didn't go through the law school.

Allison:
Well, I saved myself a lot of money that way too.

Edo:
Yeah. Some people call it the new law, but I think that, let's call it the legal counsel 2.0, okay? Something like that. Talking legalese is something that I think is not considered as being a good legal counselor or lawyer. Now you need to tell kind of business legal language and not only legal, so you can definitely use other people, you can definitely make them feel committed, and if you talk to them on an eye to eye basis and not like I'm a lawyer and you are not a lawyer, it will also help the company to get more revenues, to streamline their processes and so on.

Allison:
And now that you mention it, a lot of the contracts that I've seen in the last, oh, five to 10 years, I guess, have made more of an effort to write in plain English. And clients will tell me, "We are writing in plain English, we're trying to make this clear and to leave out as much of the legalese as possible." So maybe that's a trend that's happening in the legal world, to kind of make things a little bit more accessible for people. And to break down that barrier, as you said, it's a language difference. And if you're trying to break down that barrier, then you can better serve your clients that way.

Edo:
Working with multinational companies and specifically startups, I can tell you that no one is willing to listen to a lawyer who is talking legalese. They want a lawyer who can speak business language because eventually, the bottom line is risks and revenues. And you need to make sure that you enable to mitigate their risks, minimize them, but increase the revenues while doing that. So if you talk about, I don't know, theories of legal, whatever discussions, it won't help you to be part of the team. And I do agree with you on everything here.

Edo:
Working with multinational companies and specifically startups, I can tell you that no one is willing to listen to a lawyer who is talking legalese. They want a lawyer who can speak business language because eventually, the bottom line is risks and revenues. And you need to make sure that you enable to mitigate their risks, minimize them, but increase the revenues while doing that. So if you talk about, I don't know, theories of legal, whatever discussions, it won't help you to be part of the team. And I do agree with you on everything here.

Allison:
Yeah. Yeah. That makes sense. It just alienates. You same with technical people who speak in overly technical terms and the business can't follow, it just serves to separate you from the team.

Edo:
Correct.

Allison:
So another good question, so in instances where you have had maybe a difference of opinion between, say, a legal group and then a business group of users, what are some of the compromises that you've seen take place between those two groups?

Edo:
All of them should focus on the same bottom line, which is mitigating risks and increasing revenues. So I really don't think that there should be here any conflicts. I look at it a bit differently. I think that everyone should understand that the end goal is to make a deal happen. Sometimes the deal is very, I wouldn't say bad, but it's not as good as the organization wanted because for example, there are many risks or unlimited liability for engaging with a very important client and so on. So the bottom line is not as good as expected or wanted, but in these cases, the legal should say, "Okay, these A, B and C could happen or not, or couldn't happen. Percentages of things like that to happen are A, B and C." By the way, you can also analyze. In the past, I don't know, 10 years, there was no claim involving the insurance coverage or something like that.

Edo:
So it also mitigates the risk, okay? You need to see the entire picture and not to focus only on the legal issue itself, and you need to make sure that both parties understand each other. If you do that, yeah there might be some shouting and arguments and so on, but people understand eventually that they have the same goal. So I represent, I'm not familiar with the lawyer saying, "Listen, you cannot do that, and that's it." You should say, "Okay, there is a risk by doing that, these are the chances, make the decision. I do want to get this deal done, but just understand that there might be some risks." So when you do that, and when you talk to each other, you can solve everything.

Allison:
Yeah, and ultimately it is the business's decision that you and I can work as consultants with them and we can make the best recommendations, but ultimately it's up to them to decide what's right for their business and for their company.

Edo:
Correct. And again, I'm talking now as a GC of startups and everything, I've never felt like I'm not part of the business. And maybe this is something that I did on purpose, I'm sure that I needed some purpose, but I was always part of the management team and the business team and the discussions, and I made sure that I'm part of all the discussions, because I feel like I positioned the legal team and myself at the heart of the business. This was my goal, I made myself an enabler and business person, and I managed the legal team as a business unit, so I never had issues like that. I've never felt like I have to stand and say, "No, no one can move on." I can highlight the risks and we can make a decision afterwards based on everything. As long as you calculate and take into consideration all the parameters, every decision you make, even if it's not the best, it's still legit.

Allison:
So you just brought up another thought to mind. What about parameters that didn't get considered before that maybe the team just missed?

Edo:
It can happen, and it will happen. It's not an issue if, it's an issue of when it will happen, and even if you make a mistake, you should admit to making a mistake. That's fine. I didn't consider that. I didn't see that. It can happen. Even the smartest people on earth make mistakes. That's fine.

Allison:
Right. We're all human, right? Even lawyers.

Edo:
Yeah. Lawyers are not human. I'm kidding. Again, I'm a lawyer too. We are humans and we make mistakes and that's fine, and sometimes, for example, if I asked you a year ago, "Listen, let's not move on with a specific project because there will be a lockdown for one year." You would have said, "What are you talking about?" Correct?

Allison:
Yeah. Oh yeah.

Edo:
Okay. And now there is a pandemic, so I can tell you that when I was a GC, I talked to my CEO and the management about the GDPR and everybody told me nothing will happen. And two years after, it was a mess, not a mess from the point that we did meet all the requirements and everything, but the entire world didn't know how to deal with GDPR and deletion of data and privacy and stuff like that, because it wasn't a huge revolution. So yeah, sometimes there might be things that you will not take into consideration and you need to be agile and to understand that it can happen.

Allison:
Yeah. I remember that when the new GDPR rules rolled out and for me as a non-European user, it really didn't have a lot of impact on me, except that suddenly I got floods of emails from companies that were updating their privacy policies and wanted me to know about it.

Edo:
Yeah, me too. But I remember that, I think that during 2017, every U.S. company that I was talking to said, "It's not relevant for us." In 2018, they understood that it is relevant for them and make lots of changes, and then the privacy shield was, if you remember, terminated and so on and so.

Allison:
In your experience, what are the kinds of data or the data points that both sides agree on that don't really need a whole lot of discussion? But both sides are like, "Oh yeah, that's fine, we need that."

Edo:
It really depends on the industry. For example, if you work with a pharmaceutical company, these terms are very common and everybody agree on them in a high tech company or a sales oriented company, the revenue and the value. So I really think it depends on the specific industry, but if I have to map, and I do that, my methodology is talking about eight to 12 common parameters that no one argue on them. I'm talking about everybody who would like to know if there is limitation of liability, yes, no. Everybody would like to know if you have an obligation to provide insurance certificate, yes or no. Again, we were discussing about contract simplification. It doesn't matter if you need to provide within 30 days, it matters for the life cycle, but when you do a BI afterwards, a BI process, you just need to know if it's a yes or no, for example. I do have to provide all that agreements that has insurance obligations, for example.

Edo:
MNA or non assignment, the ability to assign agreements, the venue itself, choice of flow for example, confidentiality is one of them, the termination or renewal, everyone would like to know if you're committed to one year or two years, or if an agreement is automatically renewed or not, just so you can plan ahead what to do. So I guess these are the main parameters. Even though some of them are legal, I don't think that in today's world, they are considered as legal parameters, but I guess more business parameters. And you have specific parameters for specific industries, as I said. Insurance coverage for shipping, for example, for pharmaceutical companies or for companies who deal with sending equipment, and so on and so.

Allison:
And then the flip side of that, is there any one particular data point where as soon as it comes up, it's a problem every single time?

Edo:
I don't think so. Usually what I see is the people, I think that I get most of the push backs when I say to people, "Listen, you have kind of mapped 80 different parameters that you would like to collect. Now let's take the 80 and make them 20." And they tell me, "Okay, so I'm going to lose lots of info" And I tell them, "Listen, the fact that you can track data is fine, but you cannot use all the data." If you want to know, for example, you cannot make a report based on the party's names. Okay? It doesn't make any sense.

Allison:
Right.

Edo:
But you can make a report based on a which agreement has mutual indemnification or mutual confidentiality or one-sided confidentiality, something like that. So you need to kind of, I would say, focus on the stuff that brings business added value and this is where I get lots of arguments because people, and I'm not talking only about legal people, but people would like to get all the information and they forget that in order to collect lots of data, you need to also complete lots of data. And if you get a form with 55 different parameters to complete, even legal people wouldn't complete the entire form because it's going to take them, I don't know, 15 minutes, and it doesn't make any sense. It should take one or two minutes. That's it.

Allison:
And that circles us nicely back to the beginning where it was that different groups and different users might have different goals and different intentions, but yeah, you're right. If it takes 15 minutes to fill out, nobody's going to do that.

Edo:
No, no.

Allison:
You're not going to have user adoption and it's just going to be a big old mess in your database.

Edo:
Right.

Allison:
All right. Well Edo, thank you so much for taking the time today to join me and talk about this. I think it's an important topic, especially as you said, not everybody wants to talk to lawyers, but if you just start those conversations, you can start breaking down those barriers and get everybody to a point where you're working together and getting the data that you actually need, and that's really best for your business.

Edo:
Yeah. As long as you hear everyone, it's fine. You don't have to agree and accept everything but you need, and again, you also need to balance. If in order to make a decision, you are going to discuss for, I don't know, two months, it's redundant. So you need to balance also here. You need to listen to people, but you need also to make a decision and do a cutoff and say, "Okay, I've learned, I heard everyone. These are the decisions. Let's move on."

Allison:
Yeah, exactly. Sometimes you have to agree to disagree and move on. Oh, Edo, thank you so much. Appreciate your time today.

Edo:
Thank you for having me.