Category Archives: Legal

Don’t Kill ALL the Lawyers …

… but certainly think about how (much) and when you use them in Procurement and your organization as a whole.

Earlier this month, THE PROPHET asked a very important question regarding Lawyers, Contracts, Procurement, and Tech in 6 parts, which essentially boils down to:

When will advanced tech, especially the tech we have today, replace lawyers for most in-house and even on-retainer Legal services?
To which the doctor replied: Why hasn’t it already?

Right now we have legal-tech so good that you should NEVER use a lawyer to:

Write a contract.
In fact, if you have any contract writing skills at all, even without ANY tech whatsoever, odds are high in your favour that you will write a better contract without a lawyer, especially in tech and supply chain when you know your business, the risks, and the key agreements and protections you need in place and, frankly, the lawyer doesn’t.I can’t count the number of times I’ve been told this is a great contract and there’s nothing wrong with it as we paid XK (where X, depending on the contract type, starts at 5, 10, or even 15), when the contract is in fact mediocre at best, full of holes, and sometimes even worse than the contract the firm was using. But sunk cost fallacy takes full effect, and a slipshod effort by the paralegal, quickly reviewed by the counsel to make sure there is nothing glaringly wrong, and put before you with a big price tag becomes the greatest contract ever written.

And yes, a lawyer will know to look for the presence of key standard clauses that should be in every business contract and contract from your business but, guess what, so will any contract creation / analytics product on the market.

And yes, a lawyer can tell you the potential risks associated from veering away from a standard contract, standard terms & conditions, and standard mitigations, but, guess what, so will any contract creation / analytics product on the market.

There’s very little contract-related value a lawyer can offer that modern tech can’t do, especially in the hands of a tech-savvy contract manager who understands the purpose of a contract and writes the contract in plain English.

Locate the relevant statutes (laws), decisions, and regulations that affect your business.
There aren’t many valid uses for Gen-AI, but large document search and summarization is one valid use, and a use that usually works remarkably well (with a very low failure rate compared to other tasks wrongfully put to these LLMs). No need to pay thousands in hourly billables to dig up what these tools can dig up in minutes and you can review in hours.
Summarize your Financial and Legal (Reporting) Obligations with respect to all statutes and regulations that apply to you.
Again, this is one of the few valid uses for Gen-AI that works quite well as it’s just another type of document set summarization. So why pay a legal team dozens or hundreds of hours when you can get a highly accurate summary for next to nothing in comparison?
Summarize known incident response options, and known benefits/risks of each.
Again, this is one of the few valid uses for Gen-AI that works quite well as it’s just another form of document summarization. And while this won’t necessarily be 100% complete, or give you specific insight to your situation, it helps you get a handle on where you might start.

The reality is that you only need a lawyer to:

Do a final contract review.
To make sure you didn’t screw up a clause, miss a core enterprise requirement they have committed to memory, or address an upcoming risk or issue they happen to know about that you don’t. Considering this is all they really do anyway when you ask them to write a contract (as they are either sloughing it off to the paralegal or just pulling one from the file that is close to what they think you need and just making a few edits), just pay them for what they do that they are good at.
Review the list of statutes, regulations, and legal decisions you believe you are subject to.
Their in-depth knowledge of the law means that a good lawyer who practices in the relevant area will quickly be able to tell you whether or not each statute, regulation, and/or legal decision is relevant to you, key points you shouldn’t miss, and whether there are any statutes, regulations, and/or legal decisions they believe you should also be aware of because they are, or may be, relevant.
Review the financial and legal reporting you plan to do and advise you on completeness, correctness, and accuracy.
They know the law, and how to keep you in line with it.
Advise you on your incident response plan and best alternative options.
Again, these are legal experts who focus on mitigating risks and arguing for a living, unlike dumb algorithms which can just summarize which they are given. This is, or should be, the true value of your legal counsel and when you should really be paying the high hourly fees.

As to THE PROPHET‘s question as to:

When will it happen?
The answer is who knows?

Considering that good contract creation applications have been around for almost fifteen (15) years, where all you had to do was define clauses and variants by geography or category, standard templates by category, etc. and then rules for special situations, and it would assemble a custom template for you in minutes, the base technology should have been common a decade (10 years) ago. Now we have Gen-AI thrown into the mix which can analyze your contract repository, pre-populate your standard clauses and build starting templates, and then customize those based on the buy specifics, you can get a decent draft in minutes with very little manual effort.

We’ve had good semantic document summarization for well over a decade, and Gen-AI has taken that to a new level, most CLM vendors are integrating it, it’s easy to use, can be trained to be highly accurate for this task, and not expensive.

We’ve had good contract analytic solutions for about a decade, which can analyze all sorts of performance metrics, risk metrics, associated costs, and so on.

But yet these solutions have rarely been adopted, when they could save an organization a lot of money, help the organization get their risks under control, help the organization better manage their spend, and help the organization understand its supply chain.

This shouldn’t be surprising given that year after year, as per our recent myth-busting 2025 2015 trends, companies say they want strategic value but only focus on cost-cutting, but don’t even do that right. Only two technologies have been proven to support year-over-year cost reductions of 10% or more (adjusted for inflation), and those are

  1. (advanced) spend analysis
    (not the dinky projects some companies outsource to Big X who use second rate third party tools for poor results)
  2. (strategic sourcing decision) optimization

And how many companies have truly adopted these technologies AND use them in house? Our guess is less than 20% in the first case and we know it’s less than 10% in the second case. It’s like we said in our recent rant on You Don’t Need Gen-AI to Revolutionize Procurement and Supply Chain Management — Classic Analytics, Optimization, and Machine Learning that You Have Been Ignoring for Two Decades Will Do Just Fine!

The Sourcing Innovation Source-to-Pay+ Mega Map!

Now slightly less useless than every other logo map that clogs your feeds!

1. Every vendor verified to still be operating as of 4 days ago!
Compare that to the maps that often have vendors / solutions that haven’t been in business / operating as a standalone entity in months on the day of release! (Or “best-of” lists that sometimes have vendors that haven’t existed in 4 years! the doctor has seen both — this year!)

2. Every vendor logo is clickable!
the doctor doesn’t know about you, but he finds it incredibly useless when all you get is a strange symbol with no explanation or a font so small that you would need an electron microscope to read it. So, to fix that, every logo is clickable so you can go to the site and at least figure out who the vendor is.

3. Every vendor is mapped to the closest standard category/categories!
Furthermore, every category has the standard definitions used by Sourcing Innovation and Spend Matters!
the doctor can’t make sense of random categories like “specialists” or “collaborative” or “innovative“, despises when maps follow this new age analyst/consultancy award trend and give you labels you just can’t use, and gets red in the face when two very distinct categories (like e-Sourcing and Marketplaces or Expenses and AP are merged into one). Now, the doctor will also readily admit that this means that not all vendors in a category are necessarily comparable on an apples-to-apples basis, but that was never the case anyway as most solutions in a category break down into subcategories and, for example, in Supplier Management (SXM) alone, you have a CORNED QUIP mash of solutions that could be focused on just a small subset of the (at least) ten different (primary) capabilities. (See the link on the sidebar that takes you to a post that indexes 90+ Supplier Management vendors across 10 key capabilities.)

Secure Download the PDF!  (or, use HTTP) [HTML]
(5.3M; Note that the Free Adobe Reader might choke on it; Preview on Mac or a Pro PDF application on Windows will work just fine)

For Successful Sourcing Sometimes You Have to Listen to a Lawyer

the doctor is always on the look-out for good articles on (strategic) sourcing and its importance to overall procurement performance in today’s stressful supply environment. Especially if the article isn’t yet another seven steps to sourcing success article. This article by Chris Eastham of fieldfisher was really close, as it provided nine tips to improve sourcing efficiency after telling you that

  • Sourcing is a Live Wire
  • Geo-Political Drivers cause Chaos
  • Technological Drivers cause Complexity

and these collectively compound your struggles, which are exacerbated enough due to organizations taking approaches that don’t serve their overall strategic objectives such as:

  • an insufficient focus on business drivers
  • only seeking piecemeal advice from Legal
  • a lack of project management (that results in key activities happening out of order)
  • a lack of early stakeholder engagement
  • an unsuitable project team (that doesn’t have the right subject matter experts)

And the author is dead on here. These are common mistakes. The author, as noted in our introduction, also had nine tips that included the following six:

  • early engagement of all stakeholders
  • realistic (not overly ambitious unrealistic) plans
  • core team with (enough) subject matter experts from day one
  • the desired results and a business case up front
  • do multi-round tenders that include detailed RFIs
  • define rules of engagement for stakeholders and vendors

But it was the following three that need to be highlighted because the doctor doesn’t see this advice enough in seven steps to successful sourcing articles.

  1. document all key requirements for the project in advance
  2. document all key product and service requirements, including any necessary terms and conditions that must be agreed to for the vendor to engage with the business
  3. get the right Legal team on board before the event is launched

Why are these three tips so tantamount to triumphant sourcing events?

  1. multiple reasons to document all key requirements for the project
    • if you don’t document all key requirements, you can’t be sure you know them
    • you can’t get the project right if you’re missing key requirements
    • you need to make sure you don’t invite any vendors that can’t even meet the key requirements
  2. multiple reasons again to document all key product and service requirements
    • if you don’t document all key requirements, will you buy the right product or service for you and, more importantly
    • you can’t share all the key data with vendors, which is important to ensuring they quote on the right products or service and
    • they can’t self select out if they can not meet any of your core business requirements, which means you could waste time analyzing their bids, optimizing the perfect award, only to start over when they figure out they’re not right for you (or, even worse, when they deliver the first order and nothing works)
  3. multiple reasons to get the right Legal team (which might just be one in-house counsel, or might be three hot-shots from an external firm for a complicated, 100M purchase that can make or break the company)
    • they know the key requirements that need to be addressed and in the contract to minimize internal risks
    • they know the risks of the dealing with companies in other geographies and what you have to consider for the suppliers you are planning to invite to the event
    • they know what should be in the contract, and communicated as such up-front, what should be in an appendix, and what is not crucial
    • they know the data you have to collect to meet the different regulatory (reporting) requirements that your organization has to adhere to, and which requirements you have to communicate with suppliers to make sure they can, and agree to, give you the right data

In other words, Legal, especially for any buy that is financially significant, strategically significant, or risky, is key to get involved in the right aspects up-front. (And note that if you build a team with the right stakeholders, and document the right requirements, Legal will be able to work quickly and efficiently, and even more so if you are willing to use standard templates and insist that vendors agree to your standard contracts and standard terms.)

Source-to-Pay+ Is Extensive (P13) … But I Can’t Touch The Sacred Cows!

In our last installment (Part 12) of this series here on Sourcing Innovation (SI), we provided you a list of forty-plus (40+) vendors that could potentially meet your spend analysis needs and help you identify the cost savings, reduction, and avoidance opportunities you have in your organization as well as the best modules to achieve those cost savings, reduction, and avoidance opportunities. The right spend analysis tool properly applied will generate returns that are many orders of magnitude greater than the cost of the tool and will surprise you.

However, some of those best opportunities will be in the “sacred cows” of Marketing, Legal, and SaaS subscriptions. And you probably think you can’t do anything because you don’t have the data, Marketing and Legal won’t let you touch their spend (or give you the detail you need to even analyze it, often because they didn’t collect it), and you have no idea on what SaaS is actually being used and how much you overspend.

the doctor knows this, and knows that you might need custom solutions to manage, and analyze, this spend, so, before we move on and tackle the next module in the Source-to-Pay queue, we’re going to take a brief sidebar and provide you with short lists of vendors that specialize in each area that will collect the data you need — and sometimes even provide you with deep, customized, integrated analytics that provide you with the insights that matter (including the insights that matter on your matter spend) — to enable deep spend analysis, benchmark creation, and opportunity identification.

But first, we have to repeat our disclaimer that, as per the lists of e-Procurement vendors provided in Part 7 and the list of Spend Analysis vendors provided in Part 12, this list is most definitely in no way complete (as no analyst is aware of every company, and neither Marketing nor Legal are the particular domains of expertise of SI), is only valid as of the date of posting (as companies get acquired and go out of business, often without notice), and does not include the broader range of offerings that are available for SaaS Management (including provisioning and cloud management), Marketing (including agency management pure-plays, although DecideWare, for example, does this), or Legal (including contract authoring, management, and clause analysis — although we will cover some of these players when we get to Contract Lifecycle Management [CLM]).

Again, and we can’t say this enough, not all vendors are equal and we’d venture to say that this most definitely applies to the lists below. The companies below are of all sizes (very small to very large), offer different functionality (focussing in on different aspects of Marketing, Legal, and/or SaaS Spend Management), different levels of customization and integration, different types of companion services, focus on different company sizes and/or company types, and integrate with different Source-to-Pay and Enterprise ecosystems.

Do your research, and reach out to an expert for help if you need it in compiling a starting short list of relevant, comparable, vendors for your organization and its specific needs. For a few of these vendors, you may find a write up in the Sourcing Innovation archives, Spend Matters Pro, or Gartner cool vendor write-ups, but for many of these vendors, you’ll have to look beyond your typical sources of information as they are highly specialized and don’t fall into the typical Source-to-Pay bucket. But if you have enough Marketing, Legal, or SaaS spend, they can be highly valuable.

Note that, due to the newness of SaaS spend management, the different marketing and legal needs of every organization, and the high degree of differentiation between many of the solutions below, we are not (yet) defining baseline functionality and instead advising you to do a detailed analysis of your spend, processes, and needs and judge potential solutions based on that. If you need help with that, seek out a pro who can do the (gap) analysis and RFI creation for you.

SaaS (Software-as-a-Service) Subscription Cost Management

Company LinkedIn
Employees		 HQ (State)
Country
Beamy 60 France
BetterCloud 305 New York, USA
Cledera 63 Colorado, USA
Flexera 1026 Illinois, USA
G2 Track 792 Illinois, USA
Hudled 8 Australia
NPI Financial 410 Georgia, USA
Productiv 139 California, USA
SaaSRooms 9 United Kingdom
SaaSTrax ?? North Carolina, USA
Sastrify 166 Germany
Setyl 14 United Kingdom
Spendflo 70 California, USA
Substly Sweden
Torii 114 New York, USA
Trelica 12 United Kingdom
TRG Screen 179 New York, USA
Tropic 240 New York, USA
Vendr 404 Massachusetts, USA
Viio 18 Columbia
Zluri 111 California, USA
Zylo 144 Indiana, USA

Legal Spend Management

Company LinkedIn
Employees		 HQ (State)
Country
Apperio 48 United Kingdom
Brightflag 150 New York, USA
(LexisNexis) CounselLink 28 Ohio, USA
Fulcrum GT 158 Illinois, USA
Mitratech TeamConnect 1119 Texas, USA
Onit 339 Texas, USA
Ontra 421 California, USA
Persuit 100 New York, USA
Thomson Reuters Legal Tracker ?? Ontario
Tonkean LegalWorks 76 California
Wolters Kluwer (TyMetrix 360) ??? Netherlands

Marketing (Procurement) Spend Management

Company LinkedIn
Employees		 HQ (State)
Country
DecideWare 27 Australia
HH Global ?? United Kingdom
Mtivity 15 United Kingdom
Promost 68 Poland
RightSpend 23 New York, USA
SourceIt Market 6 Australia

Onwards to Part 14.

AI Can Certainly Identify Relevant Case Law, But Can It Predict Judge’s Decisions?

We are all familiar with the use of AI in contract (lifecycle) management to scan contracts, decompose them into clauses, identify the type of clause, index the contract against the clause types, and identify entity and attribute types in those clauses. This is common practice for best-of-breed CLM providers like Icertis and Exari and standalone best-of-breed contract analytic providers like Counselytics and Seal Software.

But not all of these are designed to evaluate a contract, and more precisely, a contract dispute against existing law and case law to determine the likelihood of a ruling in a party’s favour. But that is apparently what the new AI entrants are shooting for.

As per this article in The Globe and Mail, a new AI entrant is offering simulation software that predicts how a court might rule in a given case involving tax law. The software, which takes client details, arguments, previous case law, and current law into account, crunches this, and other inputs, and delivers a simulated judgement claimed to be 90% accurate.

And now the company in question is turning its attention to labour law and hoping to offer a product soon that will offer the same type of predictive accuracy in this legal area. This will obviously be more difficult than tax as there are more grey areas as to what is a violation, but it may be achievable.

But is 90% accuracy enough? That’s 1 in 10 wrong predictions. But maybe it’s enough. If the software predicts that the plaintiff will lose, with 90% or more reliability, a case that could easily cost hundreds of thousands of dollars, and the damages for pleading guilty are less than a million, the right legal strategy would obviously be to seek out a good deal and not risk losing it all in court.

Plus, if both sides of a pending legal battle had access to simulation software that always showed one side losing with significant confidence, then at least one side will always be up for negotiation, and that’s almost always cheaper than a costly court case. Plus, it gets a resolution quicker, and sometimes the biggest cost of a dispute is the lost time.

So while it will never be truly accurate, as you can’t truly predict how a judge will rule in any given situation (as a human interpretation of a grey area can always be different than what might be the typical interpretation), this might just be the software that lawyers, tax accountants, and, soon, HR professionals need to come to their senses and resolve the dispute before wasting time in court.

And if it works in these areas, maybe soon it can ingest global law and treaties and be applied to Procurement disputes …