We're diving in again to the ever-expanding contract management space this week, looking at a piece of software that straddles the murky waters between procuretech and legaltech.

Redlining and amending contracts is a boring and tedious process to most procurement professionals, but a necessary evil that comes with the territory for commercial contract negotiations post-sourcing and award.

My guest this week to break down how technology can get us to our destination faster is Dan Broderick, CEO and Co-Founder of Washington DC-based legaltech start-up BlackBoiler.

Utilising AI to speed up and simplify your contract clause redlining process

I start off by asking Dan about who he typically sees as being the customer's job title in the roles that they sell to, with this being a more legal-focused solution, and to what extent Procurement features in this. We then move on to some of the key features that BlackBoiler offers to set the scene of what it can actually do to aid us as procurement professionals to speed up an otherwise cumbersome and tedious task.

What is Black Boiler's sweet spot?

There's a lot of contract management software now on the market and it's becoming an increasingly crowded space.

Dan sees BlackBoiler's sweet spot as being a contract negotiation automation software that helps customer and supplier get to the point of a mutually acceptable negotiated position on contracts, through the use of automation on changes to standard contract copy.

This can be applied on both native contracts and third party documents.

Both Legal and Procurement alike are seen to Dan as being potential "buyers" in this space. Also Sales to some extent are involved in the conversation because they're often struggling to conclude contracts fast enough to satisfy customer expectations.

What inspired Dan to found BlackBoiler?

As a lawyer, he found that he was often tasked with negotiating contracts that were very similar, and was responding to very similar counter-party positions and redline in these documents.

After getting the feeling that his work felt more than a touch robotic, it made him realise that a significant part of his job could potentially be automated to free up time and to speed up the process.

Are the must-have features different when viewed from a sales, procurement or legal perspective?

YES!

Dan explains that the key challenges tend to be:

How to bridge the gap between AI, and the professional expertise of the lawyer?

Dan explains that BlackBoiler (or indeed any AI-powered solution for that matter) is not designed to work on its own. The objective is to speed up the process and enable arrival at the destination faster, not to eliminate Legal from the process completely.

Helping the legal counsel to become more efficient and free up their resources to work more strategically is the overarching objective. By enabling them to not be actively involved in fairly routine higher volume, lower risk agreements will add value to both Procurement and Legal alike.

Dan likens this to using a junior counsel rather than a highly experienced legal professional for more routine agreements.

What about greenfield or decentralised procurement with no standard contract templates?

This is an area where it's difficult to apply the typical solution that BlackBoiler would go in and solve. Dan mentions that they're currently working on building something that will enable new or less structured procurement teams to go in and generate some standard clauses based on some standard intake questions.

The solution isn't ready for market yet at the time of publishing but watch this space was his comment!

If lawyers wrote contacts in plain English, would this alleviate the need for such tools?

So, I've got to be honest, I've been waiting to ask someone with a legal background this question on the podcast for a while now.

His answer is that nobody in Legal sits at a computer, opens up a blank Word document, and starts composing a contract from scratch. The reality is that most contracts are a muddle of existing, previously agreed to documents and clauses which are usually chopped, changed and adapted for the specific requirements of that specific buyer / supplier relationship.

There is no difference whether a contract originates from third party paper or an internal standard contract template which has been redlined by the supplier.

Is there a full stack CLM suite that does everything?

In short, no.

It's similar to the suites vs. best-of-breed debate in procuretech. There is no one-size-fits-all solution, but through the increasing adoption of APIs and easy integration, it's possible to get different legaltech solutions to speak to each other.

The person who is responsible for the implementation must be aware of this and be mindful of the need to perhaps look at more than one solution, if there is a need and an expectation to cover all aspects of contract management within their digital transformation journey.

Implementation and customer success is key. Dan mentions that many software solutions in his opinion are way too focused on marketing and product development, and too little time is spent on ensuring that the client is happy with and able to get the most out of the software they have purchased.

Who is the customer, and how to differentiate the sales and marketing message in order to resonate?

This is a space where websites and sales campaigns have to incorporate many different potential decision makers. It's not the same as selling e-sourcing software, where Procurement is pretty much the default end customer and user.

Here, a solutions provider in theory has to appeal to Legal, Sales AND Procurement all in one.

So, how does a software company tailor their marketing, content, copy and outreach to speak everyone's language?!

Everyone's contracting function is going to be different. No two organisations are the same. This makes the sales process much less prescriptive. For example, in some cases, Procurement does certain tasks that Legal would be responsible for in other companies.

Some solutions, BlackBoiler included, tend to trend more towards Legal as the key decision maker, whereas other contract-focused software may be somewhat more generic or more tailored towards Sales or Procurement.

Dan rounds off the interview by talking about how the contracting function could perhaps benefit from becoming a little bit more streamlined or joined-up in many organisations to ensure that the whole process is somewhat smoother.

What size of business does BlackBoiler's solution serve?

It's generally a more enterprise-focused solution, with clients typically being organisations who are doing $1 billion and above in annual revenue.

Also, another stream of revenue is focusing on large legal services providers (some of the big law firms) who are typically dealing with enterprise contracts on behalf of their corporate clients.

With that being said, they are also looking at making the solution more within reach of mid-sized businesses. In theory, this could drastically reduce spend on legal services, by just sending out the most complex contracts for external counsel support.

Stay in touch!