How Ironclad Saved a Major CPG Company’s Legal Team A FTE

When consumers browse store shelves for their favorite products, they rarely consider the intricate web of contracts necessary to bring new items to market. But behind every package and marketing campaign lies a labyrinth of merchandising agreements, each traditionally requiring hours of meticulous legal work.

For one major consumer packaged goods (CPG) company, this contract bottleneck became incredibly complex and burdensome. The company operates in a highly regulated segment of the industry and faced unique challenges in managing its complex network of agreements.

A broken contract management system

In 2018, the company’s contract management system was in disarray. The finance team had attempted to implement SAP’s Ariba, an enterprise software solution whose operational streamlining capabilities were already being leveraged for other initiatives across the organization. But the implementation never quite took off for contract management.

“We had some more pressing issues, external factors that were impacting the company at the time that required us to divert resources away from things like the implementation,” their Vice President & Associate General Counsel explained. The result was a system that, while theoretically capable, was never properly set up or utilized.

Mired in manual processes

Without a functioning contract management system, the legal team was left to manage complex agreements through manual processes. Challenges abounded, including:

1. Email and Excel-based workflows: “To start a workflow, you had to ensure that the right person within the organization was pulling the right contract template,” the VP recalled.

2. Manual template management: Keeping contract templates up-to-date and ensuring the correct version was being used proved a constant challenge.

3. Time-consuming drafting and negotiation: “I had three full-time employees reporting to me within our contracts department,” he explained. “One of them spent the vast majority of their time drafting and negotiating merchandising contracts, it was so time intensive.”

4. Lack of standardization: Approvals and compliance checks were done manually via email within inconsistent process frameworks that relied upon the knowledge of tenured employees themselves.

5. Difficulty in auditing: Auditing processes and transaction histories was near impossible at the time. “If somebody needed to audit a specific process or they needed to find the history of a given relationship, if key employees had left, then they’d have to dig through our emails and just pray that we had done the right thing with respect to archiving,” said the VP.

The Ironclad solution

After building a compelling case based on the productivity costs of manual contract management, he championed a better solution to his company’s contracting woes. “It was a years-long sales process,” he noted. “But I ended up getting the organization to agree to use Ironclad.”

Implementing Ironclad transformed the company’s contract management process. Here are five of the most impactful features:

1. Automated template management: “I’ve offloaded the responsibility for ensuring that our templates are up to date from the legal department. That’s automated.”

2. Self-service for sales teams: With Ironclad, salespeople do all of the math and fill out all of the details themselves. “They engage in self-help, and by the time I see it, it’s already been approved by finance and sales leadership,” a legal department manager said.

3. Streamlined approvals: Maintaining the company approvals process has been automated, and the process has been streamlined.

4. Complex calculations handled automatically: One of the company’s workflows relies on a number that’s generated by a complex, revenue-derived formula. Before Ironclad, the formula was known to have caused an error or two in its day. Now? It’s all handled by the workflow, accurately and automatically.

5. Simplified legal review: With Ironclad, the standard legal review process has simplified from, “20 emails, 12 different calls, and Zoom meetings editing live with a salesperson,” down to “Click approve, click submit for signature, and click archive.”

Driving efficiencies and spurring career growth

Ironclad’s impact on the company’s operations has been significant. “I can honestly say that Ironclad has saved me an entire full-time employee,” said the VP. “And that’s just with our merchandising program use case.”

The success of the Ironclad implementation has also been a career catalyst for the employee who championed it from the beginning. “I’ve been promoted twice since then,” he shared, highlighting how driving this digital transformation accelerated his own professional growth, as well.

Looking to the future

While the company has seen substantial benefits from Ironclad, they recognize there’s still potential to be tapped. “We’d like to expand it more. We’d like to use it for all our contracts,” a legal team member finished.

Future plans include expanding Ironclad’s use to cover NDAs and science contracts and leveraging playbooks to capture and standardize institutional knowledge. Broadly, the goal is to further reduce the need for legal team member’s involvement in routine contracts.

“I think that over time, we’re going to utilize Ironclad for things outside of this one important use case. We’re going to start to put some of our institutional knowledge into Ironclad,” he concluded.

As CPG businesses continue to seek ways to improve efficiency and reduce costs in an increasingly competitive market, this company’s journey with Ironclad serves as a compelling case study. Investing in the right legal tech stack can optimize contract lifecycle management, drive efficiency, and allow legal teams to focus on more strategic work – all crucial factors in the fast-paced world of consumer-packaged goods.