If you're in-house at a company and haven't been paying much attention to your vendor contracts, you might be missing out on a crucial asset. According to legal ops leader Navin Mahavijiyan, these documents are not just formal agreements but valuable sources of data that can dramatically inform and improve business decisions. In a recent discussion on the "Notes to My (Legal) Self" podcast, Mahavijiyan explained why these contracts are essential and how legal teams can leverage them for greater operational efficiency.

Vendor contracts typically serve a background function—filed away and seldom revisited unless a problem arises or a renewal looms. However, Mahavijiyan highlighted their hidden value, noting, "Managing your vendor, supplier, or subcontractor contracts is crucial for the business. It involves a significant amount of spend and tracking these contracts—knowing when they expire, when to discuss renewals, or simply acknowledging their existence—is instrumental."

The challenge isn't just about creating a repository of contracts. The real opportunity lies in transforming these static documents into dynamic datasets that actively support smarter business strategies. Mahavijiyan is a proponent of using artificial intelligence (AI) to handle this transformation but cautions against hasty adoption without strategic planning. He recommends identifying specific data needs—such as renewal dates, payment terms, and auto-renew clauses—before integrating AI tools to ensure they provide meaningful and actionable insights.

Aside from making contracts searchable, Mahavijiyan stresses the importance of contextuality. It's crucial for legal teams to set up systems that not only store information but also trigger actions through alerts and workflows tailored to different business needs. This approach ensures that various stakeholders, from procurement to finance, receive relevant notifications that prompt timely and informed decisions.

Interestingly, Mahavijiyan pointed out that some of the most valuable data doesn't reside in the contracts themselves but in related external details such as vendor contacts and business context. Capturing this metadata requires a robust process involving intake forms, playbooks, and templates, which help in creating a more comprehensive lifecycle for each contract.

However, as systems grow more sophisticated, the risk of information overload is real. Mahavijiyan advises against bombarding every stakeholder with all contract details, suggesting instead a targeted strategy where information delivery is customized to the specific needs and frequencies of different departments.

In conclusion, vendor contracts hold untapped potential that can significantly influence how a business manages its operations, risks, and growth. By adopting the right tools and processes, legal teams can transform these documents from passive files into powerful instruments of business intelligence—effectively turning a window of insight into a control panel for strategic decision-making. Are you ready to explore this forgotten goldmine?