Today's General Counsel, May 2022 by Today's General Counsel

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Partnering With Your Peers in the C-Suite

Prioritize process, not technology, for effective contract management Measuring data for high-impact ESG Post-signature contract management $199 SUBSCRIPTION RATE PER YEAR ISSN: 2326-5000 ISSUU.COM/TODAYSGC

Drug-free workplace policies v. employees’ right to use laws

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contents 4 EDITOR’S DESK LABOR & EMPLOYMENT

10 WEED AT WORK Employees’ right to use is evolving. By Dean Rocco

MAY 2022 Volume 19 / Number 3

COLUMN/CLIMBING THE CORPORATE LADDER

14 COMMUNICATION IS KEY FOR GENERAL COUNSEL No legalese please. By Andrea Bricca

Q & A'S

7 A FULLY-MANAGED CONTRACT REPOSITORY Q&A with Praful Saklani 12 MEASURE DATA BEFORE YOU MAKE AN ESG DECISION Q&A with Ken Crutchfield

FEATURE

16 PROCESS IS KING IN CONTRACT MANAGEMENT Prioritize process, or you’ll create an automated version of something that doesn't do the job. By Diane Homolak

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EDITOR’S DESK

emocracy may be threatened everywhere else, but it’s still doing well at annual meetings and other venues where corporate shareholders make their policy preferences heard.

In the U.S, activists have been filing so-called “green-washing” suits — ESG-based shareholder derivative actions taken when a corporation’s actions don’t match up with its words with respect to carbon footprint and other climate-related risks. In this issue of Today’s General Counsel, Ken Crutchfield is interviewed about the role corporate counsel play in their company’s ESG policies, and the use of data to assess the risk of litigation that green-washing poses. How best to automate contract management is the subject of Diane Homolak’s article. Her advice: Put the “process” first. Think about the end state you want, then reverse engineer a solution. In an interview, Praful Saklani talks about managing the strategic information that contracts continue to yield after they’re signed. Columnist Andrea Bricca writes about the importance of communication skills in making general counsel effective leaders, and Dean Rocco discusses the conflict between mandating drug-free workplace policies and many states’ legalization of adult marijuana use.

Bob Nienhouse, Editor-In-Chief bnienhouse@TodaysGC.com

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Interview with Praful Saklani

raful Saklani is the co-founder and CEO of Pramata. Over the company’s 15-year history, he has held fast to its original mission: to maximize the value

of signed contracts by empowering access to critical contract information for those who need it. Today, that vision has been honed into an essential, effortless solution known as Repository as a Service (RaaS). In this interview, Praful shares his perspective on the value of contract management, why traditional approaches get it wrong, and how Pramata makes maximizing contract value effortless for B2B companies.

How has traditional contract management technology failed to solve the post-signature problem? Current contract lifecycle management (CLM) approaches tend to conflate and combine the pre-signature drafting/approval process with the post-signature repository and data access process. This is a mistake. They are related but different problems and should be solved using different strategies. When you attempt to solve pre and postsignature challenges through a single, rigid approach, it creates a situation where the contract management process works against you instead of for you. This “closed system” approach forces you to standardize the entire contract generation and inflow process before you can get usable contract data to the people who need it when they need it. Imagine if Google required all web pages across the Internet to be standardized for their search engine to work. That would be very slow, expensive and not very useful! BACK TO CONTENTS

Post-signature contract management is critical. People across the organization need to know what terms are active and inactive. What are the current obligations and commitments? And they need to know in one click. They can’t afford to waste time hunting them down when they are trying to engage customers for renegotiations. Companies need to solve contract access and visibility broadly as a cross-functional problem, not simply a legal problem.

If post-signature contract management has impacts far beyond the legal team, what role does legal play? Things are changing at a faster pace than ever before. Markets are evolving rapidly, customers’ needs are constantly transforming, and each executive’s role needs to change accordingly. Every general counsel we work with is examining these questions: “What is my role within the larger organizational mission? What responsibility does legal have to enable the MAY 202 2 TODAYSGENERALCOUNSEL.COM

of information. When your legal team is negotiating with a vendor or customer, you’ll have immediate access to what you need — all because there is finally reliable, complete contract visibility from one centralized repository.

What a great segue! Let’s talk about the centralized contract repository. How has Pramata’s Repository as a Service made it more attainable for companies?

overall business strategy of the company? What can we do to empower revenue goals, customer success and profitability?” Ten years ago, maybe 10 percent of the legal executives I spoke to were thinking this way. Now, it’s well over 50 percent and rising each year. So, assuming the legal leadership in a company already understands the need to partner with other areas of the business to achieve strategic goals, the question is, Where can I have the biggest impact? Contractual relationships contain critical information that is vital to the strategic objectives of sales, finance, operations, customer success and many others. Ensuring that the information in contracts is available across the organization is “low hanging fruit” that unleashes efficiency and productivity across all these functions. By championing initiatives to quickly address the information bottlenecks, legal executives can enhance the strategic impact of their departments immediately. The great thing is that you don’t have to choose between value for legal versus cross-functional impact. There is also a very practical and direct benefit to your legal team — efficiency. With post-signature contract management, you can stop the “round-robin” of daily phone calls from sales or finance in search of this contract or that piece

To solve this contract management challenge, companies must empower the business with the contract data they need to drive action. To do that, you need a reliable contract repository with high-quality data and visibility that is updated daily. And it must have intuitive, accurate search and reporting that’s easily adopted by everyone. And you need it now. This may seem obvious, but it’s a much more difficult undertaking than many companies realize. So, they end up with low user adoption and incomplete or inaccurate data. In many cases, they try again and again with similar approaches, wasting years in the process. Our solution was to create a fully managed contract repository that combines an intuitive and cross-functional cloud platform, powerful AI-driven technology and a team of contract experts that gives organizations a complete, centralized and searchable understanding of their contractual relationships. It creates and maintains that one source of truth with 99 percent-plus accuracy. This is Pramata’s Repository as a Service (RaaS). Read the full interview here.

L ABOR & EMPLOYMENT

Weed at Work By DEAN ROCCO

he labyrinth of medical and adult-use marijuana laws continues to expand across the United States. At present, 18 states have adult-use programs and 37 states permit cannabis for medicinal use. Rasmussen, Gallup and Harris polls from 2021 reported that well above 60 percent of Americans favor cannabis “being legal.” In a Gallup poll from August 2021, 49 percent of Americans acknowledged trying cannabis – the highest level ever measured by Gallup. In light of these figures, it is not surprising

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that human resources departments are increasingly having to confront cannabis-related personnel matters. Anticipating that the increased use of cannabis under new legalization statutes might conflict with employers’ existing drugfree workplace policies, states are beginning to include employee-use rights in their statutory frameworks. For example, at the same time New York’s Marijuana Regulation and Taxation Act (MRTA) legalized adult use in 2021, it prohibited

employers from taking adverse action against employees who engage in legal use of cannabis offsite, outside of work hours, and without use of the employer’s equipment or other property. In addition to prohibiting discrimination against “off-duty” cannabis use, the MRTA prohibits most employers from testing employees for cannabis unless they are expressly required to do so under other applicable law (e.g., federal drug regulations for commercial truck and bus drivers, New York drug-testing mandates covering for-hire vehicle motor carriers), or if an employee exhibits an articulable symptom of impairment. This effectively eliminates pre-employment drug testing for most employers. The MRTA expressly permits employers to take adverse actions if employees exhibit articulable symptoms of impairment; notably, the smell of cannabis by itself is not an articulable symptom of impairment. In New Jersey, regulations codifying the state’s adult-use ban on discrimination against employees for lawful, off duty cannabis use prevent employers from taking adverse actions against employees simply due to cannabinoid metabolites in their bodily fluid. Although New Jersey’s Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act does not expressly prohibit drug BACK TO CONTENTS

testing, it does prohibit employers from acting based solely on a positive drug test. During the 2019 legislative session, Nevada passed AB132. As of January 1, 2020, this law prohibits employers from refusing to hire applicants who test positive for cannabis unless the job is as a first responder, a motor vehicle operator covered by state or federal drug testing laws, or one that could adversely affect the safety

to state drug-testing prohibitions. Safety sensitive positions covered by federal or state drugtesting mandates will normally be respected. Examples include regulations published around the Omnibus Transportation Employee Testing Act of 1991, such as those issued by the Motor Carrier Safety Administration for truck and bus drivers or issued by the Federal Aviation Administration for pilots. Other

These statutes evidence growing legislative intent to protect employees’ off duty cannabis use. of others. Where employers elect to test employees, employees may submit to an additional screening to rebut the results of a test within the first 30 days of employment. These newer statutes protecting off-duty adult use build on similar laws in no less than 15 states protecting employees’ off-duty medicinal use. While these statutes evidence growing legislative intent to protect employees’ off duty cannabis use, they continue to respect employers’ prerogative to prohibit use during work hours and on work property, and recognize federal and state laws permitting drug testing for employees in safety sensitive positions. Many employers covered as federal contractors under the Drug-Free Workplace Act of 1988 mistakenly believe that this statute obligates employee drug testing. The Act does require contractors to disclose violations and convictions, and notify contracting agencies when a conviction is disclosed. But it does not require employers to drug test employees, nor does it provide an exception BACK TO CONTENTS

examples might include contractors working in national security who are subject to Department of Defense regulations. The landscape surrounding medical and adult use marijuana laws continues to change, and varies from state to state. Employers must take note of the employee rights provisions within cannabis legalization measures and fold them into their overall workplace drug and alcohol policies.

Dean Rocco, a partner in the Los Angeles office of Wilson Elser, is the Western Region Chair of the firm’s national Employment & Labor Practice and co-chair of its Cannabis and Hemp Practice Group. dean.rocco@wilsonelser.com

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Interview with Ken Crutchfield

oday’s General Counsel spoke to Ken Crutchfield, Vice President and General Manager of Wolters Kluwer Legal and Regulatory U.S. The Legal

Markets Group within Wolters Kluwer Legal & Regulatory U.S. provides legal professionals across a wide range of markets with expert content and analysis and leading workflow solutions. Ken is responsible for setting the vision and strategic approach with a focus on developing leading digital products. He brings three decades of experience to his role. Prior to joining Wolters Kluwer, he was the Senior Vice President & General Manager for the Bloomberg Tax Technology division of Bloomberg BNA. He also served in executive-level positions at organizations including Thomson Reuters and LexisNexis. Throughout his career, he has successfully led the growth of multiple businesses in varying industries, including tax & accounting and legal. In this interview, we focus on the rising concern about ESG matters, how they relate to corporate counsel, the biggest challenges and best practices.

Welcome, Ken. Let’s start off by having you define ESG matters, and then discuss the role corporate counsel usually play in a company’s ESG policies, compliance, and reporting. Absolutely. The concepts of ESG aren’t new; but, more recently, activist investors, interested customers and others have driven a lot of voluntary disclosures within certain industries, particularly where there is an environmental concern or other sensitivities. ESG stands for environmental, social and governance. Environmental is just that — dealing with climate change, greenhouse gas emissions, water usage, pollution and dumping, etc. Some

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companies look to have a net zero carbon footprint, for example. That’s not a requirement of law, but they are looking at how they manage their environmental footprint. You have other industries – energy companies, for example – that get scrutinized based upon their carbon footprint, and how they’re reducing the negative impact. Social is about ideas of social justice, diversity, equity and inclusion, where corporations have a degree of responsibility in terms of making the world a better place and making their company more equitable. This can go as far as product enhancements and policies governing supply chains. The intent is to ensure BACK TO CONTENTS

that businesses do their part to support progress in society as a whole. And governance not only refers to the traditional role of the board in balancing the interest of stakeholders but also data and privacy compliance, and ensuring there is more diverse representation on the board. All aspects of ESG are important, but which part is more important will vary from company to company and industry to industry. So, the role that corporate counsel play is strong but varies based

standardize climate-related disclosures for investors. So, some of this may become required and trigger legal obligations for publicly traded companies.

What are some of the main challenges corporate counsel face in regard to ESG? I would say ESG is multifaceted. It’s a new area that corporate counsel will need to become familiar with so they can more accurately assess risks and advise their companies. How do customers view what you’re doing, and does that impact your business at a fundamental level? Do you need to be looking at your suppliers? Are there other stakeholders that you need to be considering? From there, you can begin to understand the things that are important to your industry, your business and your stakeholders. I think that’s the biggest challenge: prioritization. Not being overwhelmed, and having a rationale for policies, what to track and disclose, whether it’s voluntary or mandatory.

With the rise of regulatory compliance and disclosures, general counsel and corporate counsel are going to need to be involved more directly. upon the company and industry. With the rise of regulatory compliance and disclosures, general counsel and corporate counsel are going to need to be involved more directly, first with assessing and understanding what policies need to be in place and what legal compliance is required, but more broadly, making sure they’re supporting the company strategies around ESG, and perhaps even being involved with the procedures and controls to ensure that there’s transparency in case of an audit.

So how has ESG changed over the last few years, and why is it becoming more prominent in the corporate landscape? Corporate awareness and responsibility is becoming more significant, and whether it’s social justice issues, pay equity, climate change or other things, investor groups and customers are interested in where companies stand. Take, for example, lithium batteries. An investor group might ask a manufacturer or user where the lithium, cobalt and other minerals are mined, how they’re mined, whether child labor is involved. Now, we’re starting to see where the NASDAQ is providing guidance on voluntary disclosures. We’re starting to see new regulatory activity with regard to environmental disclosures as well. In March, the SEC proposed rules to enhance and BACK TO CONTENTS

Finally, for our last question, what is a primary best practice for corporate counsel regarding ESG? I think that first is the ability to measure and collect data, which allows you to make decisions. I always think people, process, technology and data all have to come together. If the first step is understanding the data, then from there you can make decisions on what you need to alter, or what policies and controls need to be set in place. So collect data to identify and measure, assess risks and opportunities, and then focus on what can have the greatest impact. Develop policies and KPIs for those areas, then measure and report progress.

So, it all goes back to data, right? I think so. You can’t act on what you can’t measure.

Right. And you can’t measure what you don’t know. Exactly.

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COLUMN/CLIMBING THE LEGAL DEPARTMENT L ADDER

Communication Is Key for General Counsel By ANDREA BRICCA

ecent columns addressed how general counsel can effectively partner with their peers in the C-Suite. A common thread was open communication and connecting. With that in mind, it is no surprise that when our firm surveyed 150 current GCs and asked them

to identify what they wished they had known when they first assumed the role, they put communication skills front and center.

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Lawyers are generally thought to be good communicators. However, based on over two decades of experience interviewing lawyers for new jobs or about their hiring needs, that surprisingly is not the case. There are as many personality and communication styles out there as there are types of lawyers. Not all are effective for the C-Suite. A key component of effective communication that lawyers tend to do well with — and should continue to hone — is logical and organized presentation. Linear communication is easy to follow for the majority of your C-Suite colleagues and business partners, and will help you connect and present your points. Lawyers go wrong when they do not keep it simple. The number of lawyers I have heard ramble on and on is enormous. If you have ever talked to someone who tells you way more than you need to know, then you understand the feeling. You do not want to be that person. Hand in hand with logical order and keeping it simple is what could be the most important key to effective communication as a GC — listening. Are you being responsive to what your colleagues, investors, vendors, suppliers or outside counsel are saying? Active listening will allow you to get the

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entire message, not just individual points. If you are listening, you will be able to provide the best legal advice for the company. All our in-house clients are looking for a GC who will offer solutions — not just identify problems. As a GC, your ability to listen and respond in a concise way will allow you to better understand what is needed to move the business forward, and thus communicate effective solutions to legal issues, and business issues as well. The GC must engender confidence and trust. How you communicate is directly related to those attributes. Spouting legalese in conversations with non-lawyer executives is off-putting, and you will end up needing to explain more and more. Use language that is appropriate for the topic and not overly focused on your legal knowledge. Instead, make it focused on your knowledge of the business. Understanding your non-verbal communication will also help you in a GC role. Your posture and tone reflect more than you may be aware. Confidence in how you present is important, with the caveat that displays of overconfidence highlight your insecurities. Be aware of your body language and that of others. Are they congruent or opposed? That can tell you if you are connecting.

The proliferation of video, emails and texts means communication is not just in person anymore. Make sure your written communication is clear, short, light on legal nomenclature, reflective of the audience and responsive to what information is needed. When you are on a video conference, find a way to look at the camera and connect with the people on the other side of it. Yes, you’ll need to work at that for it to become natural. Building rapport takes time, but effective communication helps shorten that time frame. Understand your style and how you can improve. Acknowledge others’ styles to help you connect with them. The best lawyers, orators and leaders work on communication skills continually.

Andrea Bricca is a Partner with global legal search firm Major, Lindsey & Africa. She matches employers and lawyers to advance organizational and career goals. abricca@mlaglobal.com

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FEATURE

Process Is King in Contract Management By DIANE HOMOLAK

he vast majority of contract lifecycle management (CLM) implementations fail to deliver the value that organizations expect. Technology is not the culprit, so what is? The potential of CLM is undeniable. However, the marketplace hype for technologies such as automation can create a false sense of what is possible. As with any enterprise technology, CLM systems are not push button. Any solution—whether it’s full-fledged or low-code—will only perform as well as the process problems that were understood and addressed before the technology is implemented.

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Engineer and consultant W. Edwards Deming said, “If you can’t describe what you are doing as a process, you don’t know what you’re doing.” Prioritizing technology over process is like trying to jump on a bullet train without first laying down track, hiring the conductor and mapping the optimal routes. It winds up being a road to nowhere. Following is a list of processrelated reasons why contract management transformations fail, and advice for how law departments can sidestep setbacks. • Pushing bad process in and getting poor automation out.

Most departments have yet to deeply examine their unique contract management issues and identify the fixes needed. Instead, they attempt to force fit their problems into existing solutions and expect the system to automate their troubles away. Ground must be laid to take advantage of emerging tech. Nothing is worse than automating and animating bad process. Without prioritizing process, you create an automated version of something that is not working. You force the technology to stretch beyond its capacity. The result is a loop of constant customization, defeating the purpose of investing in the technology in the first place. For example, most contract agreements take time. They are complex, and require give and take with a counterparty in order to reach common ground. Yet CLMs are built to drive automation of low complexity contracts – a rare scenario in the real world. Let’s say you have an elaborate approval process. If you try to recreate it in the confines of an out-of-the-box application, you will have to customize that application to do all the steps. • One-track thinking about contract management solutions. There’s a lot of hype surrounding CLMs. By following the crowd, law departments get tunnel vision and BACK TO CONTENTS

narrow their choices for solving problems. It’s important to think beyond CLM, and more broadly about contract management strategy. Zoom out and evaluate contract management from the standpoint of people, process and technology. Where would your resources work the hardest, and why? Thought experiments can help shake up our thinking and catapult us into more innovative ways of operating. What if there were no such thing as a CLM? How could you still improve results, and realize faster time to market and greater efficiency? For example, if you have Microsoft Teams and Word for collaboration, you don’t need document assembly unless you are in a template environment. Do you really require a full boat CLM application? Maybe a low-code solution would suffice.

technology implementations. In reality, people won’t follow the process if the system goes against the natural flow of how they operate. They will bypass it. It’s important to take the time to understand what your team is trying to accomplish and why. You have the option of a hybrid approach. Instead of forcing people to work in a tool, divide up the work. Take work best suited for tech and process experts and outsource it. You don’t have to force the entire organization to do things that are unnatural for them. Let attorneys have the front-end experience they want, and then throw it over the fence to automate the back end. Allow the deviations on the front end in the name of the user experience, but integrate data on the back end.

Without prioritizing process, you create an automated version of something that is not working.

• Struggling to find talent. Transforming contract management takes a multi-disciplined team including technology process experts as well as cost efficiency lawyers and contract managers. Talent is harder than ever to find. Companies don’t have resources with the right skill set to work in a technology-enabled world, and technology and data responsibilities are falling on the shoulders of lawyers without the necessary experience. • Going against the flow of user behavior. There’s a blind belief among buyers that everyone on the team will get onboard with new BACK TO CONTENTS

• Failing to prevent food fights with governance guard rails. Businesses will invariably have competing ways of doing things, while CLMs have one way. Establishing governance is critical to reduce infighting between departments and friction between the business and the system. You have to compromise and achieve a level of standardization that enables automation while mitigating risk.

contract management system requires care and feeding. It will change and demand resiliency. You must get people in place to manage enhancements and upgrades. It’s critical to embed layers of knowledge into the process to sustain the system. When you have to change one of your workflows, or update one of your clause libraries, or someone leaves the organization, you must have people with the necessary working knowledge to maintain the system over time. It’s tempting to throw technology at the contract management problem, but priming the pump with a streamlined process is paramount to success. Think about the end state first, then reverse engineer a solution to get you there, whether it’s full-fledged CLM or a low-code workaround. Put the process first and reach your destination sooner.

Diane Homolak is Vice President of Legal Technology in the Contracting and Commercial Solutions group at UnitedLex. She is responsible for assessing and optimizing client contracting processes. Previously she was Manager of Global Legal Innovation and Strategic Solutions at Hewlett Packard.

• Believing implementation is one and done. Going live with a CLM is typically an afterthought for departments. There’s a mindset that once the tech is launched, it will manage itself. It’s important to remember that you aren’t building a statue. Your MAY 202 2 TODAYSGENERALCOUNSEL.COM

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Articles inside

EDITOR’S DESK

PROCESS IS KING IN CONTRACT MANAGEMENT

COMMUNICATION IS KEY FOR GENERAL COUNSEL

Interview with Ken Crutchfield

Interview with Praful Saklani

WEED AT WORK