Eric Laughlin, CEO of Agiloft, talks about the evolution of contract lifecycle management, how the pandemic has heightened awareness of blind spots that many companies have around contracts, and why the most successful organizations think of their contracts as “relationship DNA.”
You joined Agiloft in August 2020, as the CEO, after the company received a $45 million growth equity investment from FTV Capital. Please tell us about Agiloft and what drew you to this opportunity.
Eric Laughlin: I’ve spent my career in legal tech and in tech-enabled services, and over the years, I’ve worked with legal departments undergoing transformation – and that’s what gets me excited. I see the possibilities when legal departments embrace modern approaches to processes, and particularly contracts. And that’s what I want to be part of. Agiloft was particularly attractive to me because of its contract lifecycle management platform, which is our core offering. We don’t think of it as legal tech, but rather as enterprise technology. We’re on a mission to elevate the contract and make it a first-class citizen within the enterprise. To do that, we offer enterprise-grade software that connects contracting professionals to their internal clients. It allows them to fully embrace contracts as data, not just as documents.
I actually started working with Agiloft while I was still with EY. We set up a partnership with Agiloft, and a few months later I started consulting with Agiloft, and I helped Colin Earl, the founder, raise capital from FTV. I knew it was the first thing we needed to do to make this company great, because Agiloft has been around for quite some time and has an amazing product foundation. It had already proven its ability to execute with 600 customers, and it was ready to be supercharged in terms of sales and marketing and alliances. So after working with the founding team, I helped them raise capital – and then I joined as CEO.
Tell us what solutions Agiloft offers enterprises in their contract management process.
At its core, our platform is a contract lifecycle management (CLM) software platform. It really is fully featured, end to end, all the way from requesting contracts to authoring contracts – meaning collaboration and clause libraries, playbooks, routing approvals and signing contracts, contract repository, and analytics on top of that repository. And then there’s the ability to manage your obligations that underlie the contracts in the system. Under the hood, we’ve developed robust artificial intelligence that rivals anything in a legal engine. And the amazing thing is that underlying our CLM application is the Agiloft platform itself, which takes a no-code approach to enterprise software. Agiloft was founded on the idea that enterprise software should be more successful than it is, and that some of the failure points around enterprise software are around the configurability and custom code that becomes brittle. So Agiloft was built as a no-code platform, and the CLM platform is an amazing use case for that, because that agile approach to software really responds to the changing needs of the business, including the changing needs of the contract department over time.
We have some of the most impactful organizations in the world as our customers – in technology, pharma, health care, defense, manufacturing, government, education. I think one of the things that they all have in common is that they value the contract as more than a shield. They value a contract as relationship DNA, and as a valuable data asset for the company. I think that’s a really important approach to take when you think about contracts.
How has the pandemic accelerated the need for contract lifecycle management and digital transformation within the legal industry?
There’s no doubt that the pandemic has changed the way that we think about contracts. I hear it in the stories our customers tell us.
There are a couple of changes in particular that I think are worth noting. At a high level, the pandemic has served as an example of just how fast modern businesses need to be able to react to changes. While I certainly hope that there is not another pandemic of this scope, there will be other unexpected things that change how we do business. That’s an important lesson for us to take away from all this.
To dive a little deeper, I think the pandemic has heightened the awareness of blind spots that many companies have around contracts. When the pandemic hit, I’m sure that most general counsel were frantically searching their contracts for performance clauses, for force majeure clauses, for an understanding of what the impact might be on their relationships. That’s something that might have been a blind spot until the pandemic emerged.
Another effect of the pandemic is that it showed just how important speed to contract is. For example, among our nearly 700 customers, we are grateful to have some of the most prominent vaccine makers and health care systems. Those organizations had very singular missions this year: Create vaccines, expand testing, expand bandwidth for patient services. Those missions demanded very fast speed to contract with new suppliers, with new means of distribution.
For instance, one of our clients was trying to set up a new drive-through clinic. They did it rapidly, and they realized that old and rigid manual contracting processes would have failed under the stress of trying to set something like that up so quickly. But by using Agiloft, they were able to take agile processes and use the technology to keep up with everything that was required. They were able to have very fast speed to contract and still maintain all the necessary compliance standards.
The pandemic has also showed us how mobile the workforce has become. Agiloft is a remote organization, and on my own team people have been taking advantage of this moment to move to locations they wouldn’t have been able to live in before remote working. It’s been very clear that organizations that can’t run efficient, virtual contracting processes are struggling. It really points to the need for automation, for virtual processes.
CLM can create a better connection between the contracting organizations and the commercial clients that they serve internally.
What short- and long-term value can organizations derive from highly effective contract lifecycle management?
The short-term value includes some no-brainers. First, having contracts all in one place, digitized and searchable, promotes the knowledge of risks and opportunities that can be found in your contracts. Second, improved speed to contract, which means faster to agreement, faster to revenue, faster to moving forward with your relationship. Third is increased compliance and lower risk, because you know what’s actually in your contracts. Fourth, increasing bandwidth for complex agreements. If you do the contract process correctly, then those highly skilled professionals who can work on highly complex agreements have more time to do that.
In the long term, CLM can create a better connection between the contracting organizations and the commercial clients that they serve internally. Again, contracts need to be thought of as relationship DNA. They can’t just be something that is created and put away on a shelf. Contracts really have to understand and communicate with all of the commercial needs of the business, with the regulatory environment of the business, with the relationship needs that the commercial and internal clients have. Using CLM to connect the contracting department to the rest of the organization and to your relationship partners is a great long-term goal and benefit.
The other long-term impact of CLM is that it can create more resilient contracting organizations that can flex quickly to meet the evolving needs of the business. Once you leverage technology to create a process and give yourself more data – and more data visibility – that allows you to react quickly, as long as your CLM tool is set up in a way that allows it.
What are the primary pain points CLM solves for in-house legal and other business professionals?
Too often contracts are treated as shields, when companies really should think of them as relationship DNA. Using a contract merely as a shield separates you from your business partners, it separates you from your customers, it separates you from your vendors. Instead, you really should find out what’s in the DNA of those relationships – and that’s in the contracts. There could be risks there, yes, but there could also be hidden opportunities. It’s all about proactive discovery of what’s in that code, what’s in that set of instructions for the relationship. Rather than pulling out the contract at the last minute as a defensive mechanism, companies should think of contracts as valuable digital assets for their relationships.
The second pain point I’ll mention is that I think too often companies end up putting their contracts into a digital dead-end storage place. Contracts have certainly migrated from the old paper dead ends, like an Iron Mountain storage box, into something better, which is a digital representation of that paper. But too often, they still get stuck in a digital dead end, like someone’s hard drive. Our idea is that contracts should be housed in a system of record. And they shouldn’t just be digital representations of paper; they should be digital assets. The data underlying the contracts should be populating that system of record. Agiloft makes sure that contract data is accessible to those in the organization who need it, not just the requester or the drafter. We want companies to start thinking of contracts as digital assets, and make sure that their CLM tool is connected to the rest of the company in a way that facilitates relationships.
Another source of pain is around bandwidth. If you treat contract drafting as something that can only be practiced by those who are skilled in the art of self-defense, you restrict contract drafting to a very small number of people within the company. At Agiloft, we take a very different view, which is that contracts can benefit from process and can often be democratized with tools such as self-service drafting and self-service authoring. Something like self-service authoring puts the pen into the hands of the person closest to the relationship. And because the process is facilitated by the platform, it maintains the compliance standards of the company. Self-service can actually improve the work lives of highly skilled contracting professionals, allowing them to use their time and ability on more complex agreements. At the same time, it improves the speed and compliance of everyday contracts.
The fourth pain point is that legal departments that are already pursuing contracts as a process may take too rigid of an approach. They might think, “If we lock in a process, it won’t change, and it never can change.” But that’s the wrong approach. You need to have a process, yes, but that process also needs to undergo a continuous effort of improvement – to make it faster, to get better compliance, to acknowledge the realities of the business and its commercial goals. Since those business goals are always changing, you need to take an approach that is really agile thinking around process. In order to do that, you need agile technology.
The last pain point I’ll mention is that I hate the notion that legal departments get a bad reputation as “the department of no.” It’s my mission, through Agiloft, to elevate contracting professionals into a position of being connected business partners, and to eliminate the idea that they’re “the department of no.” And in order to do that, I need to make sure that contracting professionals have data at their fingertips – to generate insights, to see risks emerging, and to be connected to the business processes of their internal commercial clients. I think CLM – especially a robust end-to-end CLM process like the one Agiloft provides – can do all of those things.
Published April 2, 2021.
