Technology

alt.legal: IACCM Is Taking The Alt.Contract Movement From Vision To Reality (Part I)

Legalese is toxic.

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Last month, I and my colleagues at Thomson Reuters Legal Managed Services descended on the International Association for Contract and Commercial Management (IACCM) Americas Conference in St. Petersburg, FL. This conference was part think tank, part educational, part research, and part networking. The program was much more substantive than most conferences, emphasizing content over flash (although it was certainly professional, enjoyable and well-run). Proof point: there was high attendance and engagement in nearly every session on the agenda, different again from most conferences.

And with good reason! Every session was rich with insight, from leaders in the federal government discussing how they rolled out microservice-based blockchain efficiency in the hairiest and beastliest agencies for contracts (GSA and HHS), to sessions demonstrating how manufacturing hardware on a factory floor could be visually tied to contractual obligations, supply chain management, and SLAs.

These were some serious contract nerds, and I was eating it all up.

So after the conference, I was determined to get some time with three leaders from IACCM: Tim Cummins, President; Sally Hughes, CEO; and the newly-joined Peggy Chang Barber, CEO Americas & General Counsel (formerly Vice President & Associate General Counsel at Hewlett Packard Enterprise). The three of them are passionate visionaries driven to accomplish the stated goal: enabling “both public and private sector organizations and professionals to achieve world-class standards in their contracting and relationship management process and skills.”

This is part I of my (lightly edited) interview with Tim, Sally, and Peggy from IACCM.

Ed Sohn: How did IACCM start?  What is its history and how did you navigate to where you are today?

Tim Cummins: Yes, since I’m the culprit! The organization was incorporated in 1999 (we’re coming up on our 20th anniversary!). But contract management as a discipline simply wasn’t really recognized back then. Contract administration had existed, but those functions had largely been mostly replaced with initiatives in ERP.

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Yet globalization brought dramatic increases in complexity around contracting and around commercial policy and practice. Businesses in the 1990s could not make global commitments, and were incapable, in fact, of responding to demands for a commercial syncing and a contract management capability.

Organizations, particularly in telecom and technology as the driving forces in networking and globalization, came to realize that they needed much more consistent commercial practices. And underpinning those, they needed some necessary skills deployed with consistency. Buyers, similarly, began to discover the inadequacy of their thinking. They were trying to strike global supply agreements but didn’t have the practitioners that knew what that meant and nor the tools to support it. Contracting has become a multi-organizational need to establish viable, sustainable commitments and then build the operational capability to execute on them.

This is way beyond the remit of traditional legal organizations; building this capability is not something that the law department has ever had the remit to do.

ES: Certainly the contract management function works closely with lawyers, but you’re saying it’s not the remit of the legal department. What is the role of lawyers and other professionals in advancing the operationalization for modern contract and commercial management?

TC: My viewpoint on that is that it’s incredibly hard for any single function to take ownership. In some organizations, the GC is better positioned and in a more powerful position, and we have some great examples of GC leadership, like Craig Silliman at Verizon, for instance.

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But the counter side of this is unfortunately, all too often, because the word “contract” is involved, there’s a tendency for lawyers to be an obstacle to change and not a driver of it.  Sustainable change is incredibly difficult without direct support and acquiescence from the law department, but often the law department alone is not powerful enough to drive through the change itself.

Peggy Chang Barber: I agree. People think about the word “contract”, it’s a written document and therefore the legal department owns it.  But truly, unless you are doing something illegal, the contract is a business document and most of the issues are business risk issues. Even with issues traditionally considered to be legal like limitation of liability and indemnities, you are indemnifying for certain things within a scope, and how the business deal is structured makes a huge difference in how much risk is in these provisions.  It takes collaboration between the organizations that owns contracting and the business to actually make strategic change.

A key role of lawyers and contracting professionals is to influence people and help them understand that the contract is valuable and alive after the deal, not something to be put into a drawer.  The general counsels I have worked under, particularly John Schultz, had a tremendous amount of credibility and influence with the business. To the extent that GCs have that influence, things can change – you can drive contract simplification and use data analytics to identify and address risks that make a real difference to business outcomes.

ES: Let me ask about that last piece as well, because this is something I found so fascinating about IACCM. With smart professionals equipped with these capabilities and skills, while there’s a spirit of partnership and inclusion for lawyers, there’s also this idea that legalese is toxic and we should be allergic to it. Not every contract is a snowflake, and lawyers’ needing to justify themselves overcomplicate what should be a much simpler process. Is that dynamic present?

And really, what is the role of a lawyer in contract management, and where is the role of contracting professionals that manage the process?

Sally Hughes: That’s a massive question!

PCB: Exactly!

SH: There’s very much we can say about all of that.

I’m going to go back to your original point: legalese is toxic. It is!

In a world where we are all about designing for users, that phrase applies and should apply equally to the legal department or contract drafters more generally, they need to be designing for the users of those documents after they have been signed. The point is that there is no one in the organization, and we see this extensively in the work and research we do, that owns contracting. There is debate around this but approximately 20% of an agreement contains legal language and 80% of it is business.

Contracts are the bedrock of businesses and they have multiple stakeholders of whom legal is just one. Unfortunately, as Peggy mentioned, there’s this assumption that’s been built up over time that because a contract is defined as having legal enforceability it must thus belong just to legal.  We’ve lost sight of the purpose of a contract and its position as an economic instrument — the operational guide for successful projects.

It is incumbent on legal departments of the future to be focused on designing for users.  At IACCM, we always say, what we should be doing is putting ourselves out a job in everything we do.  IACCM wants to make ourselves redundant on the basis that we’re going to create a world where our mission is achieved, and we’ve succeeded in improving the integrity in trading relationships. That’s our mission.

The legal department’s mission in contracting should be the same: how do we make ourselves redundant because we’ve enabled and empowered the business to create these successful trading relationships with these positive operational guides to support successful outcomes?

TC: Not that we probably expect that to happen!  But having that mentality drives you towards continuous improvement and service to others.

This is just the beginning of the conversation. To be continued in Part II (and possibly Part III?), and it gets even better. Stay tuned!

Ed Sohn is VP, Product Management and Partnerships, for Thomson Reuters Legal Managed Services. After more than five years as a Biglaw litigation associate, Ed spent two years in New Delhi, India, overseeing and innovating legal process outsourcing services in litigation. Ed now focuses on delivering new e-discovery solutions with technology managed services. You can contact Ed about ediscovery, legal managed services, expat living in India, theology, chess, ST:TNG, or the Chicago Bulls at edward.sohn@thomsonreuters.com or via Twitter (@edsohn80). (The views expressed in his columns are his own and do not reflect those of his employer, Thomson Reuters.)

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