Insights Into Contract Management: An Interview With Concord CEO Matt Lhoumeau

On the eve of his keynote address at the 2019 CLOC conference, Above the Law caught up with Matt Lhoumeau, founder and CEO of Concord, the contract lifecycle management platform. Concord is the third company that Matt has founded in his diverse career, which also, among many other things, saw him create one of Europe’s largest video game sites and spend a year working for the former French President Nicolas Sarkozy.

Our conversation ranged widely, from the genesis of Concord to AI hype to the centrality of contracts in society. Selected highlights follow below.

“The worst job I ever had in my entire life.”

While working for a large enterprise company, I was asked to renegotiate the terms of 500 vendor agreements. I was thrilled at first with the responsibility of the task, but I quickly realized I was given a seemingly impossible task to achieve.

I spent six months basically in contract Hell. I spent one month just looking for the contracts in the file cabinets of the company, and obviously we couldn’t find all of them. Then I spent one month reading all the contracts one by one to understand what we agreed at the time, and obviously we realized that we had really missed a lot of deadlines and lost a lot of money because of this. And then I spent four months sending Word documents back and forth to hundreds of people — our legal team, our lawyers, our vendors — to negotiate all these contracts.

It’s a nightmare. People never work on the right version of the document. They forget they have something to approve in their inbox and it takes two, three, four weeks sometimes.  I was coming home every single night asking myself: “Why are we doing this? Why are we managing contracts manually despite a billion-dollar revenue company in the second millennium when we are using software to automate everything else?” And that’s why we built Concord.

Contracts are not just legal documents, but a human process and a business system.

For us at Concord, contracts are not legal documents. They are a human process and a business system. Whether you are buying or selling something, or you’re hiring someone, there’s always a contract in the middle. And companies have spent billions of dollars in the past 20 years to buy software to absolutely automate everything in their company, whether it’s a CRM or a billing system or HR system, etc. Everything has been automated but contracting.

We are able to approach contracts as a business process because we were able to leverage the technology that has been available for the past few years. Most of our competition has been around for 15, 20 years, and initially there was no electronic signature, there was no cloud, there was no online collaboration like Google Docs, for instance. The only thing they could build at the time was a repository, so a lot of the initial legacy systems around contract management were about helping companies store their signed documents on their platform, and perhaps receive an alert about impending deadlines. But they were basically managing legal documents and they were mostly helping companies with their compliance.

With Concord, we decided to take a very different approach. So what we did was leverage the electronic signature, the cloud, and online collaboration in order to build one holistic platform.  On our platform, Concord customers can create and draft their contracts directly on our system. They can redline these agreements with their colleagues and third parties directly on Concord, then they can send these documents and manage them. So it’s really the entire flow instead of just storing documents.

Not a repository, but a workflow solution and single source of truth.

There is something fundamental about having this entire flow. The problem when you have a repository is that you rely on people uploading documents on this repository. And the problem is that they actually never do it. Too many times we’ve heard companies mention that they’ve bought a two-million-dollar contract management system, but no one actually uploads the relevant version of the document, so there’s no value in it.

When you use Concord, you don’t have to rely on anyone uploading something… all the documents are already here, and so you are able to see absolutely all the versions, all the documents, as well as all the messages and reactions taken around these documents, on one single platform. We basically created a new single source of truth for our customers.

At the end of the day, contracts are more than just static documents. They are agreements. A commitment between people to do something great together. And if you actually look at the name of our company, Concord, it means agreements between people.  Our name amplifies our vision of considering agreements as more than just paperwork you store in a repository or a file cabinet.

On why all the AI hype misses the point.

“How are AI and machine learning changing the way contract management software works?”  I don’t think this is the right question, because it is like asking: “What did Java or HTML change in the development of your software?” I think AI and machine learning are just technologies, and I think trying to equate the transformation of an industry with technology is always the wrong way to do it.

What’s important is what our customers want to do. It’s interesting how so many companies have started embracing AI and talking about it all the time, but I have yet to see any company actually doing it well. I think there’s a lot of hype around machine learning and AI — a bit like the hype we have seen around bitcoin and blockchain these past few years. I do not think the technology is there yet, and I think it’s important to always focus on what the users and customers need to do rather than the technology itself.

There are so many great companies that have tried to build something on top of a technology without finding the product/market fit. At Concord, we focus more on the people instead of the machine. Like all other companies, at some point we will start leveraging more and more of these technologies, but the technology doesn’t really matter. It’s machine learning today, it will be something else tomorrow. The real question is what type of business value do we deliver to our customers.

Elevating the perception of legal teams from “blockers” to “builders.”

When you look at a legal team in a company, they are probably some of the most intelligent people in the company. You need years of study to get where they are, they are extremely precise… they’re amazing minds. What’s fascinating though is that legal departments are still seen within their organizations as  “blockers,” as the department of “no” that will slow down the processes. Once again, agreements are the core of absolutely every single business process, but so far the legal department was never really empowered to be the impact center that they are. We have fewer resources and we’re in an environment where there’s more and more constraints and regulations.

The question is: How do we change this? And that’s actually where I’ve seen technology help, because if you use a platform like Concord, for example, it will help legal departments focus on the real value of their work — powering agreements, not managing the admin of contracts. Technology can actually now enable legal departments to accelerate business and become the missing link in a business process. The minute we empower them to automate this, they will be able to enable companies to grow faster, reduce costs on the procurement side, and automate compliance. In the process, we will empower brilliant legal minds to become strategic and proactive advisors for their company.

What I think we’re going to see in the next few years, and that’s really what’s driving us at Concord, is you’re going to see legal departments having the same transformation that we’ve seen with CIOs. Twenty years ago, they were really looked down upon by everyone… and now they are probably one of the most powerful forces in a company. And that was enabled by technology.

Helping companies agree more

Agreements are about getting people to come together and to agree to build something. [The idea that contracts are boring or just a necessary evil] is sad because at the end of the day, agreements are literally at the foundation of absolutely everything. Without an agreement there would be no society. Our Constitution is an agreement. And when you look at agreements between countries, agreements between people in general, that is how we’ve built everything.

So how do we change and remove the idea that contracts are just necessary in a bad way? To refocus on the real thing, agreements are necessary in order to build. That is really at the foundation of our platform, at the foundation of how we want to empower our customers. But we think it’s something that should drive the entire industry, and we should in the future not talk about contract management anymore, but rather about agreement management and how we help people and companies agree more.