As in nature, the world of work is constantly evolving and new professional species come into existence every few years. One such new arrival is the contract operations professional, a specially adapted member of the legal ops family, focused on the entire contract environment within a business.
The ‘contract ops professional’ is the taxonomical brainchild of Eric Laughlin, CEO of CLM company, Agiloft.
Sounds interesting, but what is this ‘contract ops’ that he speaks of?
‘It’s a specialty within legal ops, which is a big field, and it’s connected to CLM (contract lifecycle management), which is not really legal tech, but enterprise tech,’ Laughlin explains.
‘The job role is one where you are working to understand and optimise the substance of a contract within an enterprise; to optimise the formation of contracts between two businesses, and to understand and optimise how the contract and its data flow through the tech stack of a business.’
In fact, talking of evolution, one could say that contracts are the DNA of a company – the substance that activates much of what happens within the body of the enterprise. Shouldn’t such a critical part of a company have its own dedicated team?
Artificial Lawyer then asked: but, isn’t this just legal ops already? Laughlin points out that legal ops is a very broad field, and contracts are just one aspect of the job. So, it’s right to have a specialised job category for this.
We then explored Charles Darwin and evolution, with the conclusion that as any field becomes mature you then get specialisation. E.g. once upon a time there were just ‘lawyers’. Today, if you say you are a lawyer, the next question is: great, but what is your area? Property? M&A? Litigation?
‘Specialisation is a sign of maturity and it’s a sign of value,’ Laughlin adds.
And this makes a lot of sense. Once upon a time there were people who did things that became classified as legal ops. Then organisations such as CLOC came along and helped make ‘legal ops’ into a widely understood thing that people could then point at and say ‘I want to be one of those’.
Since legal ops has become ‘a thing’, it has grown. By being identifiable, by having a set of values and goals, it has become a distinct profession of its own. Now, we are experiencing the next logical iterative step: professional specialisation within legal ops itself.
Could there be other specialised ops roles that evolve out of the main family? For sure, but Laughlin is focused on this one, and he’d like to see Agiloft contribute to its development, including providing training.
But who would be a good fit to be a contract ops professional?
Laughlin notes that at the core of the job is mastering how ‘the data flows from a contract through all of a business’s operational systems’, e.g. finance, sales, procurement, HR and…..of course….legal. But legal is just one part of this overlapping Venn Diagram of where contracts matter.
So, an understanding of what the legal content of a contract means will be useful, but that goes hand in hand with an understanding of at least some of the technology a company may use to move, analyse and store data. It may also need someone who has a broad, multi-sector view of a business, who can appreciate how contract data is vital to sales and finance and legal.
And of course, you don’t have to be a lawyer to understand the significance of key clauses in a contract. The part of a sales contract that says: this deal will terminate if condition X or Y is reached, can be universally understood.
I.e. appreciating the impact of an agreement’s language – and the data held in connection to it – does not mean you must be a lawyer. In fact, if the role is to help the whole business, then having a broad experience of the business, rather than being a lawyer, may be an advantage.
That said, Laughlin is not expecting for there to be thousands of such people, not yet and not without the training up to enable their proliferation.
‘It’s a very unique set of skills, but over time people can get proficient on what is the substance of the role. They are not crafting contracts, but learning how to optimise them inside the business, and thinking about sets of data points contained inside those contracts and how they relate to each other. It’s about thinking how a clause could change the performance of a contract down the line,’ he adds.
Last question: who do they report to? A while ago this site covered some research from EY and Harvard Law School about the apparent confusion in many companies over ‘who owns contracting’. A clear reason for this confusion was a lack of appointed leadership for contracting across the entire business.
It seems that having the contract ops team (when you’ve built one) report primarily to the GC would not be a perfect fit. Not unless you change the remit of the GC.
Maybe they could simply report to the head of legal ops, if there was one? But again, legal ops is much broader than contracts. Maybe the CFO, or COO of the company? Maybe we need a Chief Contract Officer or CCO at large companies to run the contract ops team?
Laughlin takes the view that they should probably report to the main legal ops group, but notes they ‘could sit in different places’, and adds that he could see a CFO of a company taking the initiative to build a contract ops team – rather than wait for the legal ops group to do it.
As to the future, Laughlin concludes: ‘Our customers tell us that CLM gets more valuable every year that they have an eye on contract process improvement, and businesses need a person who can do this.’
So, let us welcome the arrival of the contract ops professional.
Do you want to be a contract ops professional? What skills will you need? Here are some thoughts from Laughlin. You will need:
- Some tech skills and data analysis abilities, but you do not need to be a coder,
- Ops and process skills, to imagine more efficient processes,
- Sociological skills, i.e. how does the community of people within this business work?
- And also psychology, i.e. how can we get people to work with us?
Artificial Lawyer looks forward to seeing the growth of this new role.
Think he’s looking at things from his point of view mostly; but in my personal view what matters is the data itself.
It’s clear most of the data relationship will need to be managed by core engineering (especially considering smart contracts). Let’s just for a moment consider the whole data relationship of 1 single contract. Then 10. Then 100. Then 1000.
Let’s then consider that a lot of the contracts will become smart micro-contracts.
To be able to manage this, especially in complex data environments that include platforms, ecosystems and extensive data sharing; you need a largely automated approach driven primarily by a CDO/CTO Office, of RegTech Ops.
Legal Ops maturity is presently lower than everyone around, and the Legal ecosystem is still trying to mimic a lot of the old thinking into the new world. The culture maturity of Legal Ops and the whole Legal ecosystem is not there yet, in my opinion.
Data maturity comes first for companies, and that is managed at CDO/CTO level; so should the underlaying data relationship from a contract, with input from Legal Ops. The technology uptake is going to be significantly higher this way, by making smart contracts a product “ordinary” Legal can just consume.
But I do get where he’s coming from.
Just my 2 cents.