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Eric Laughlin – Democratising Contracts

This Next Normal series podcast features Elevate’s Chairman and CEO, Liam Brown, talking with Eric Laughlin, the CEO of Agiloft, a contract lifecycle management software company.

Contracts as Shields

This Next Normal series podcast features Elevate’s Chairman and CEO, Liam Brown, talking with Eric Laughlin, the CEO of Agiloft, a contract lifecycle management software company. Liam and Eric cover change management, keeping up with technology, and adopting both within legal.

  • [00:55] – “I’ve been in legal and legal tech for most of my career.  I feel fortunate to have ended up as the CEO of Agiloft.”
  • [02:27] – Agiloft is a no-code platform solely focused on CLM with 700 customers.
  • [06:45] – Giving tools to the frontline, democratizing flow and decision-making.
  • [07:32] – Contracting processes and contracts as a shield – a defensive weapon, its armor.
  • [10:54] – Connecting contracts to commercial processes.
  • [12:06] – Risk profiling, AI tells us what’s in a contract and how that compares to standards.
  • [13:34] – Being CEO for the first time.
  • [16:00] – Value creation for the business, cash, and how fast ARR is growing
  • [17:50] – Our customers’ want us to be better at partnerships
  • [20:29] – I read Designing Your Life which is about taking a prototype approach to life.
  • [22:32] – “Leadership in tough times requires …”


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Podcast Transcript

Note: This transcript has been adjusted to improve readability. Transcripts are generated using speech recognition software and human transcribers. The context and more than 95% of the actual transcript have been preserved.  We strongly encourage our listeners to listen to the audio.


Nicole Giantonio: Hello, this is Nicole Giantonio, the Head of Global Marketing at Elevate. The podcast episode you’re about to hear is part of our Next Normal Leadership series, featuring Elevate’s Chairman and CEO, Liam Brown, talking with Eric Laughlin, the CEO of Agiloft, a contract lifecycle management software company. Liam and Eric cover change management, keeping up with technology, and the adoption of both within legal.


Liam Brown: Welcome, Eric. Thank you for joining me today to talk about leadership in law. I’d like to ask you to start with an introduction, who you are, what role you have, and how you came to find yourself in the seat you’re sitting in today.


Eric Laughlin: Great. Well, thanks for having me, Liam; I appreciate it. I’m the CEO of Agiloft, a contract lifecycle management and software provider, and I’ve been in legal and legal tech for most of my career, if not my entire career. At first, by complete chance, as a consultant right out of college, my first client was Thomson Reuters, and I worked on some of the Westlaw projects. So it was the first thing I did. I never thought about law in my life until I showed up at the doors helping the Westlaw team figure out how to go from CD-ROM into the online world. I have spent my career working in content and software and services all in legal, primarily at Thompson Reuters, where I spent quite a bit of time in the Serengeti Tracker team after we acquired Serengeti. And then, for the last part of my stint at Thompson Reuters, four or five years with the Pangea3 team, leading that team. We took the Pangea3 team over to Ernst & Young and joined Riverview Law to become their legal managed services offering. I’ve been involved in the world of contracts, and when it was time to think about my next journey, I created a partnership between my organisation and Agiloft. I really feel fortunate to have ended up as the CEO of Agiloft. It’s such a fantastic company, and we’re on quite a great ride.


LB: I’m going to ask you to talk about Agiloft first, but I will want to come back to how do you go about getting your first CEO gig because I think that might be interesting to some people. But can you talk a bit about what Agiloft does and the sort of purpose behind the business?


EL: It’s a software solution. We sell into corporate legal departments, procurement departments, and sales operations for mid-sized, all the way up to very large enterprises. It’s an end-to-end CLM tool, everything from requests to authoring, routing approvals, repository, obligations management. It is a very robust AI engine under the hood, which we’ve developed ourselves and are quite proud of. The interesting thing about Agiloft as a software platform is it is a no-code platform; that was the approach we took. And the original company, its mission was to change the way that enterprise software was implemented. The idea was enterprise software fails way too often, and I bet a no-code/low-code approach could change that. It took quite a while for the team who built that platform to come across the CLM use case. And now, we are solely focused on CLM. It’s fantastic, we have 700 customers representing all sorts of different types of industries, and it’s a fantastic company.


LB: Your point about the no-code/low-code and the enterprise really resonates with me. The first time I saw that in my world as a CEO was developing solutions to automate HR or people processes, for example. To your point, it’s sort of obvious that in legal, there are similar opportunities. Even in our organisation, I smile when I see how mature our deployment of these kinds of tools is in other functions, and I know that my colleagues in our own law department will give me a hard time when they hear this. I do feel like the law department hasn’t taken a bit of time to catch up, and that’s within our organisation, let alone thinking about others.


EL: Absolutely. There’s something so powerful about the agility that it provides. When you think about the legal world trying to keep up with the pace of change, that is our business world’s reality. There’s a lot the legal department has to do, but one of them is certainly hooking themselves into software that isn’t rigid and brittle but can change as they change. No legal department knows exactly what they want to be three years from now and actually gets there. By the time they reach three years from now, they’ve realised, “Oh, actually, I should do something a little different.” While we all are striving for better processes and better ways of doing things, you have to have a healthy amount of respect for how that path will meander a little bit. The way you work as a company and as a team is going to have to change that way.

No legal department knows exactly what they want to be three years from now and actually gets there. By the time they reach three years from now, they’ve realised, ‘Oh, actually, I should do something a little different.

Eric Laughlin

LB: I remember learning about Agiloft, its history or legacy from that BPM background, and I remember being interested in, I suppose, watching. As you start to deploy these kinds of tools, you accelerate the flexibility and agility in your department. So we’re used to thinking of legal tech as something that will have multi-year change management and engagement. And while that is true, and I’m the first person to actually say to customers, “Be realistic about the change journey and the ROI.” It’s important to point out that some tools, once deployed, are like teaching people to fish. All of a sudden, the law department can be immediately responsive and flexible, too. For example, a CFO saying, “Look, we need to change our authorisation responsibilities, or what we call our authorisation matrix. That is no longer a coding exercise, I’ll iterate it in the next half an hour. Can you take a look at it, yes?”


EL: That’s right. You know, it’s interesting. We had so many of those opportunities to see situations like that during the pandemic. Obviously, things changed for a lot of companies very quickly, and certainly, for our clients. We have a client in the health system, a hospital system, that wanted to set up a drive-through testing facility as quickly as possible, and that’s a whole set of new vendors and things like that, that they didn’t have onboard before. If they were to take their old processes and say, “We’ll just run it through the same procurement process and the same contracting process,” it wouldn’t have met the need. And so they immediately had to say, “How do we adjust these workflows right now? And what is the real approval routing in this process versus what seems extraneous when there’s this time pressure?” I think we saw stuff like that all over the place in the pandemic, but I thought that was a really interesting thing. Our clients set up a drive-through testing facility in seven days, and it was the first children’s hospital to do that. It was just remarkable.


LB: That’s fantastic. One of the things I’m particularly interested in, Eric, is exploring this leadership concept in the whole legal sector. By giving tools to the frontlines, it’s sort of democratising the flow and decision-making. It is an exciting change. It is a very empowering change, and I actually think it’s an important part of leadership. Of course, I believe in the benefit of top-down resource allocation. I’m a huge believer in how do you empower people. And I think increasingly, that empowerment is not just a management technique. I think it’s actually giving them tools. You’ve really made a lot of progress very early on, and you’ve led the way in empowering the people that use your software. That must feel good to the people that work at the company.


EL: Well, it certainly is, and I owe that debt to the founding team who brought us here. As you know, I joined the company just last summer. One of the things that I keep thinking about in relation to contracts and idea of empowerment: How do you think of a contractor? And how do you think of contracting processes and democratisation? It feels like from the work that your teams have done, and my teams have done in the past, that many reference points to contracts are seen as more of a shield than anything. It’s like a defensive weapon; it’s armour. It protects you, certainly, but that idea of a contract as a shield puts you at a distance from your partners, and it puts you at a distance. You’re sort of hiding behind something that shields that relationship. When you think of it as a shield, you only give that shield to somebody who’s highly skilled in the art of self-defence. You don’t just throw anybody out there with a shield; you give it to the lawyer. And so, to your point about democratising, if you stop thinking of it as a shield and have a different reference point, you can think more freely about what the contract should be and who should have access to who should help define it.

I started to think of a contract instead of a shield as relationship DNA. It’s a set of instructions for carrying out that relationship and that relationship is the thing that drives business value for you. What could be more crucial than this contract? And what could be more crucial than giving the creation of that contract to somebody who understands the relationship better? You don’t hide behind it; you push it, you push it out. You start to think about: How well can I know my relationship DNA? How can I be more proactive about knowing my relationship DNA? That’s a whole transformation that we can undergo, which will lead us in really positive directions.

…many reference points to contracts are seen as more of a shield than anything. It’s like a defensive weapon; it’s armour. It protects you…

Eric Laughlin

LB: And in many ways, if you extend the way you’re thinking, it actually takes us back to the day when we can shake someone’s hand. When I shake your hand, Eric, it means this is what I agree to do and by when, and with some degree of specificity. To your point about the distinction between holding the shields and perhaps, on the other extreme, the handshake, you’re actually having people who are agreeing to get things done for each other. They are the right people to make the agreement. They’re the right people to deliver and hold each other accountable and keep track of how things are working. I predict that the kind of emerging changes you articulated will lead us away from a centralised command and control, ERP type into democratised relationships, as you say, between business people. In some ways, it takes us back to the code of honour rather than the shield.


EL: When you think not only about democratising the process of contract generation, that’s when we should be doing it. I think a leader is taking a stand, that is the way we’re moving. The other part of democratisation is the democratisation of data. The contract isn’t just held in some digital dead end, but the data is distributed to all the commercial processes, and commercial systems that the relationship managers own. And that’s why you see more and more contract data and contract creation even happening in other systems. At Agiloft, I can’t pretend that my system is the only system in the enterprise; it’s an enterprise software tool that’s connected to everything else.


LB: As people are using tools like Agiloft and you’re starting to have success in connecting to other systems, what starts to happen is you get transaction flow and data flow, and then things start to get interesting because there is a growing body of data that you can do some interesting things with.


EL: That’s when you’re connecting contracts to commercial processes. That’s when it happens, and I think that’s when the magic happens for the people in charge of contracts or contract analytics; in charge of understanding what’s in the data. Suppose they can now have access to insights about how contracts are interacting with the commercial processes. In that case, they can bring a lot more value to the business than they would have otherwise. I’m thinking back to my days at Serengeti Tracker. In the early days of legal operations, some folks were sort of growing into that role, being the early legal ops folks in the early 2010s, and they built entire careers. They became leaders out of, all of a sudden, having access to data that was more interesting than they’d ever had before. And I think that’s amplified 100 times in contracts because that data is now the commercial data for the company, which is quite amazing.


LB: On that note, are there any use cases or things users have done with the data that have impressed or surprised you? I ask that question so that we don’t dwell too much on the more obvious things we talk about when we say, “Here are the benefits of AI and ML, NLP.” Someone in your shoes, do you see anything that catches your attention? You say, “Wow! I never would’ve thought of that kind of use case.”


EL: Still interested in two things: One is risk profiling. And the reason I think that’s so interesting is that AI can help us understand what’s in a contract and how that compares to standards. What’s so interesting is it’s such a great spot to see the connection between the machine and the humans. As humans, we still need to decide how to weight those risks and think about what’s important to us as a business and our business strategy. And no amount of AI can do that part for you, but you need to get there. As you connect contracts into commercial outcomes, now, you actually will be able to get even closer to that and have the machine tell us, as a business leader, which of these risks do lead to bad commercial outcomes. That’s the path that I like that we’re going down right now, and that’s sort of within reach for certain types of use cases.

The other AI help that we all need – and this is in no way specific to CLM – we ought to be able to do a better job. One of our ideas is to do a better job in the interface, in the technology of saying, “It appears that you are doing this with this contract. Let me guide you through this process.” Or, “This process seems to have hit bottlenecks.” You don’t need to just look at dashboards and figure it out yourself. The machine ought to be able to tell you, “This is not efficient.” You’re going to end up using that clause anyway because nine out of the last ten times, you gave in on that. There’s just all these places where the interface can suggest ways to become more efficient, and those are the ways that I think are really exciting.


LB: Yeah, I really agree with you there, which brings me back to you becoming the CEO for the first time. What was that like? What caused you to go from “Wouldn’t it be great to be a CEO” to “I’m actually going to be a CEO.” What was that like? The going into it, the thinking about it, and then actually the reality of being your first CEO role.


EL: There were times in my career where I thought, “I really would like to be a CEO.” And then, not too long ago, only a few years ago, I thought, “I never want to be a CEO.” [chuckle] And I think I then came back to, “I have an opportunity to be a CEO, and it feels just right.” And I realised that the CEO that I didn’t want to be was the CEO of a $40 billion public company that didn’t really get to know the team, understand the clients, and be their driving culture with the team. Once I was able to squash that notion of CEO and get back to, “I can work at a company of a meaningful size that has a huge growth trajectory that can make a big difference, and I can know most of the people on my team by name.” As I do now, I can have a weekly meeting with my entire team on Wednesday at noon, where we get on and sort of make fun of each other’s Zoom backgrounds, and I can be that CEO. I don’t have to be the giant public company CEO.” And I tell you, when I realised that that’s the kind of CEO that I could be one day, I was so wrapped up in the company itself that I didn’t feel disconnected. Then I got really excited.

As much as I love Thomson Reuters, I love this job a heck of a lot more. It is very fun to be a part of this group and to know that we’re building this thing together. It is just us; we don’t have any fallbacks. There’s no transition to another business if it’s not going well. We’re all into this, we’re doing it, and we all feel really good about it. So it’s great to be a CEO in that position. I’ll tell you what – I do feel really fortunate.


LB: Going from an executive-leading business (but in a larger corporation) the mothership has capital so you have to manage a P&L, but you don’t have to manage cash, to being the CEO of a business where not only do you have to manage P&L and cash, but you also have to manage for value creation. This whole notion of you having a business of a certain value at point A in time, you have objectives for developing and growing that. I know it’s a little easy for you, but how has that change manifested or felt for you?


EL: In many ways, it feels more concrete, more real, so it’s easier for me to get my hands around when I think about value creation for the business, for example, and cash. For me, as a growing software business, those are in constant balance. When I strip it down and simplify things, how much cash am I burning, and how fast is my ARR growing? And if I get those two things right, everything else is working. There’s a lot in there, but those two metrics can really do it all. My ARR won’t grow unless my customers love my product, stick around, and help us get new customers. My cash won’t burn at the appropriate rate unless I make good investment decisions, and my team understands the value of the money they’re spending and spends it wisely. It focuses on a couple of critical things, and I think that’s great. I’ve spent a lot less time asking other people for money, which frees me up to think more about how we use the money. Every business will have moments where they’re raising capital. We raised capital last summer just as I was joining. The first thing Colin Earl, the founder who offered me the job, said was, “Let’s go get money, and then I’ll announce you as soon as the money comes in.” We did that, so that was great. The growth is funding things right now, which was fantastic.


LB: You’ve got a pretty unique industry experience given the arc of your career. You’ve worked with alternative legal service providers, and you’ve worked with the Big Four. You’re now working in legal technology. What do you think about legal ecosystems competition and collaboration? How do you think law companies – whether they are services law companies, technology law companies, consulting law companies, the Big Four law firms – how do you think they’ll play together over the next decade? I realise that’s a very big open question and there are lots of different answers to it, but what comes to mind when you think about that, the competition, collaboration for the players?


EL: The first thing that comes to mind is the people that we’re really talking about. Companies are just people. So many of us have moved around. We’re on our second or third or fourth company, yourself included. I know people on your team, and you know people on my team. There is a really nice level of collegiality in this ecosystem that I have appreciated. I think it facilitates partnerships, so I think that’s the first thing that I liked about it. I think we’re going to enter into a spot now where we’re going to get better and better at partnerships. I think that’s important because there are a lot of players in the ecosystem that are still taking on little bits of the challenge. From our customers’ perspective, they want us to get together and be better at partnerships; whether it’s Elevate and Agiloft or any other technology partners you can think of, we need to get better. And I think there’s a cross-fertilisation of people who will facilitate that. That’s the first thing that comes to mind.

The second is that many software markets tend towards having one or two big players. And you saw that in the legal content market. Where I came from, that happened over time. In the legal technology world and the legal company world right now, we generally don’t have that; we don’t have the dominant folks. I would be very curious to see how long it stays like that. Obviously, the more money and the more PE-backed acquisition Fed. platforms that come into the market, you can see a lot of consolidation happening. That’s my question. When we start getting to a point where there’s one or two big players in every market, it might become a little less collegial. I don’t know about you; I do feel that most of us in the law company world believe that the market that we’re fighting over today is the tiniest little speck of the market that it will be. The two of us, we can open up, can spark our clients’ creativity by showing them alternative ways of doing things, and alternative technology that allows them to visualise those things they can do. And so we can do those things together as partners; we’ll just grow this market. So that’s my hope for us for quite some time.


LB: I couldn’t agree with you more. I think this whole notion of professionals’ mobility is such an important way of thinking about it. So it becomes, “Yesterday, I worked at a law department, and tomorrow, I work at a law company.” We didn’t get to talk about COVID and digital and all the things that are, I’m sure, at the heart of your business. I’ll move to some ending questions that I always like to ask. The first is, and I’ll let you think about it after asking you: “Leadership in tough times requires… dot, dot, dot.” Please finish that sentence. While you’re thinking about that, I’ll ask, are there any books on being a CEO that you would recommend to other executives in legal?


EL: I will admit that I don’t consume a lot of business books. My wife consumes quite a bit, and she tells me about them. But what I will tell you is that one of the more interesting books that I’ve read recently was Designing Your Life, which is about taking a prototype approach to your life. And I think the same thing you could apply to your job as a CEO or any executive, which is to imagine what would make you happy or make you successful or whatever it is. Figure out how to prototype that and make it work. We always talk about prototypes in product or process. When I was reading that book, I was thinking about what my next job should be, and I was thinking, “Actually, I wouldn’t mind going out on my own and doing consulting. I should do that.” And I just thought that was a fascinating thing that we could apply to any parts of our lives, rapid experimentation.


LB: Before you give me the other answer, I just want to comment on that. One of the aha moments for me as a CEO was, there’s no such thing as a baked, done CEO. I’m thinking about my early venture capital or private equity investor colleagues.In fact, there’s some I didn’t work with, but I know them from your fund, who will have given the feedback, “Liam was sometimes a bit too defensive or protective. He had the answers. He wanted to be seen as a baked CEO.” Now that I’m older and a bit more comfortable with that, I like your idea about designing your life and thinking about things as a prototype. That means that you actually prototype things in the same way in your business or your product. It’s okay, isn’t it, as a business leader, to say, “I’m going to prototype this, so I’m gonna try this.” Especially if you communicate that to your board and your executive team, it’s okay when they see that you pivot away or some of those experiments don’t work out. It doesn’t reflect that you aren’t capable.


EL: You often project that sense of a success or a failure as being very black or white, and you can’t set the world up that way because that’s not the truth, yeah.


LB: So now that you’ve had a chance to come up with some good answers, it’s been an interesting last 12 months almost to the day. “Leadership in tough times requires dot, dot, dot.”


EL: Strong connections. And I don’t mean strong connections as in your network outside the business or whatever. That means stronger connections, as in, you have to feel very connected to all the different parts of your business. And I think this goes back to what I told you earlier, which is my fear about being a disconnected CEO at the top of a giant public company. To me, if you’re going through turbulent times and you don’t feel those connections, those little tremors here or there to tell you what’s going on, you’re going to miss something, and you’re not going to guide the business in the right way. Connections to your customers who will tell you what’s really happening, connections to the data, the sort of instrumentation of your business, connections to all of the people. Those connections give you that sense of what to be paying attention to and which way you can pull levers. If you don’t have that, you’re blind and flailing around. So to me, it’s all about that connectivity.


LB: There’s a couple of things that you said today that I might bring into my own leadership, so thank you.


EL: It’s been great talking to you, Liam.

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