Business has never been more complicated in the legal arena, especially for the General Counsel. Legal teams have gone from being asked to provide legal advice, to a corporate advisor for both legal and business matters.
With more and more regulation, providing timely advice is becoming increasingly difficult. There are more silos within legal and businesses, and the lack of coordination and insight across these groups make it difficult for the GC’s office to get the information they need when they need it.
What we at Seal Software are seeing is the way in-house teams are collecting, processing and utilizing legal information to actively support decision making and extract value for their businesses. I have some thought-provoking ideas on ways to identify best practices to help you provide value to your organization to help make smarter decisions, drive down cost, increase efficiency and increase revenue.
There is much talk about gaining control of your contracts and your organizational efficiency. But, how and why quantitatively is this so important? If you combine reports delivering metrics around the business problem, the storyline is quite concerning for organizations, their customers, and employees. The opportunity cost of not doing anything is high and the opportunity to gain back lost revenue is significant.
A case in point. You want to buy a product… an expensive and important one for your home or family. You start researching companies and learn that your prospective business has a lot of legal problems. Executives couldn’t find a lot of their essential client paperwork; and if they did, there was too much of it, difficult to understand or hard to monitor. When these mission-critical problems are at the forefront of senior executives minds, it’s hard to think of anything else… like the daily running of the business.
This means they cannot focus on their core business, competition, profit. Public metrics on the business problem of poor contract management tell a compelling story. The most numerous types of litigations against most companies deal with (1) contracts and (2) regulatory matters. Contracts and regulatory issues also can have high-risk factors concerning prevalence, financial exposure, the volume of rules and potential reputational risk. And when you look at the sheer numbers of contracts most organizations have, thousands – if not hundreds of thousands – you realize every one of them has the potential to affect business outcomes. In the end, US companies are losing up to 9.2 % of their top line revenue due to these inefficiencies (higher in other worldwide regions.)
Let’s do the math around this possible $92 million revenue loss. The International Association of Commercial Contract Management (IACCM) confirmed a study that found 9.2% of top line income is lost to poor contract management. That means for every 1 billion of corporate revenue that potential loss would be approximately $92 MM. Would a legal department still feel like a cost center if the GC was able to walk into their CFO and guarantee of 9.2% back in top-line annual revenue? Gaining back a share of 9.2% of annual revenue lost through identifying weaknesses in a company’s contracting process, through either cost reduction and missed revenue opportunities on the other, is the stuff of which General Counsel Superheroes are made.
What would your General Counsel Superpower be? We know what our superpowers are here at Seal Software… to be the best at searching, extracting, analyzing data and learning from it.