Ask most leaders about the details of their contracts, and you'll likely get a vague response. It's common to hear that these documents are under control, tucked away in a legal department or buried in a digital folder, rarely revisited unless an issue arises. However, Flo Nicolas, a seasoned legal tech strategist and the founder of Get Tech Smart, challenges this narrow view. She argues that contracts are much more than mere legal formalities; they are crucial business tools that signal a company’s operational and strategic values.

In a recent episode of "Notes to My (Legal) Self," Nicolas discussed her extensive experience with licensing agreements in a major telecommunications firm, where she collaborated with various departments to utilize contracts as operational blueprints. “When you’re reviewing and negotiating license agreements across departments, you see firsthand how much depends on clarity,” Nicolas stated. She emphasized that the lack of clarity affects not only legal outcomes but also delivery, accountability, and overall business performance.

Nicolas pointed out that in many organizations, contracts are drafted in isolation and managed as individual cases. This siloed approach can lead to missed opportunities to harness the data within contracts for improving business practices. She believes that legal operations teams are ideally positioned to bridge this gap. “Legal ops is uniquely positioned as a conduit across departments,” she explained. By bringing to light the patterns, trends, and inconsistencies across contracts, these teams can drive significant improvements in both legal and business outcomes.

Moreover, Nicolas argued against the notion that advanced technologies like generative AI are the primary solutions for enhancing contract management. Instead, she advocated for a shift in mindset, treating contracts as vital data sources that reveal negotiated terms, risk areas, and operational inconsistencies. This approach not only aligns legal documents with business operations but also helps in standardizing processes and reducing unnecessary complexities.

The conversation also touched on the practical aspects of contract management. Nicolas advised starting with the most common agreements and focusing on the terms that frequently cause delays or confusion. Collaborating closely with business units to understand what works and what doesn’t can lead to more effective contract strategies.

In conclusion, Nicolas’s insights reveal that contracts, often overlooked, are powerful tools that can significantly influence a company’s strategic direction and operational efficiency. By rethinking their approach to these documents, businesses can unlock valuable insights and align their operations more closely with their strategic goals, ultimately leading to better performance and competitiveness in their respective markets.