As you try to get your bearings, you realize that contracts (both drafts and executed) are living on a Google Drive, or in someone’s inbox, or on someone’s hard drive – if you’re lucky! People across the company are using various versions of a contract template to start with, and no one knows exactly which one is the latest or correct version.
This was life for Michael Pappas, General Counsel for Foodsmart, when he joined the company in mid-2021. Michael knew he had to do something to get Foodsmart’s numerous and complex contracts wrangled, so he started looking into CLMs.
Ultimately, Michael chose the Pramata platform to solve his biggest pain points. We sat down to chat with him on how things are going and pick his brain on any helpful tips he has for other lean legal departments or Solo GCs with similar contract management challenges.
Tell us a bit about Foodsmart and what kinds of contracts you have to deal with and manage on a daily basis?
Michael: We’re a food and nutrition company and we also have an app. So, our providers conduct Telenutrition sessions with patients and then those patients can use the Foodsmart app to help them find the best prices on the healthy foods they want and build recipes to help meet their nutritional goals.
What this means is that we’re both a digital health tech company and a managed services organization for a Telehealth provider. We work with many health insurance carriers nationally and negotiate contracts for in-network services. We also have to negotiate contracts with our providers who are mostly independent contractors. Then, there are all the tech workers and engineers we have working on the app, all of our vendors that support the business operations and the patients/end-users who sign up for our service and use our app.
That sounds like a lot of contracts! And it’s just you? How did you manage everything before you found Pramata?
Michael: Yeah, it’s really just me and our Compliance Officer. Between the two of us, we have to manage all the contracts. And as for how we did it? “Not good” is the best way I can describe it. When I came into the company, everything was stored on Google Drive. If I needed to find a contract, I had to hope that someone had shared the Google doc with me or that they’d emailed it to me. If I went searching through our Google Drive for a specific contract, I had to hope it was named in a way that I might be able to find it. I definitely didn’t have visibility into all the agreements that existed, or any clue where to find one if it did exist.
How did you know when it was time to find a solution?
Michael: I knew it was time to get a system in place because there were just too many people doing too many things with too many different documents. The company also has more complexities because we’re a partial owner of another startup, and we do business with healthcare companies in different states. If you know anything about insurance, it’s regulated and administered largely on a state-by-state basis, so we have different contracts with each healthcare provider in each state. It’s not like we can just have one contract with a healthcare provider nationally in most cases. With all the complexity, I knew we couldn’t keep managing contracts in a haphazard way.
Was it hard to make the case at your company and secure the budget for a system?
Michael: It took a few months from start to finish and that was mostly because we were trying to make sure we were going to get a sufficient ROI to justify spending the money at that particular point in time. That’s sometimes a large part of it. It’s not that you think a solution is too expensive on its own, but that the company is trying to figure out if it’s a must-have right at this moment. Especially when resources are tighter. Companies want to see if there’s any way to push an expense into the future. We were at a tipping point where the amount of money the company was spending for me to manage contracts without a good system was just unsustainable, and the risk of not having the contracts organized effectively was increasing.
When you were comparing systems, what features did your small legal team find the most important to look for?
Michael: Our main pain points were at the start and the end of the contract process. First, is everyone starting with the right template that’s been approved to use? And last, where are all the final documents stored and can they be searched through and reported on? We didn’t need so much help with all the things in between, which is where lots of other systems focus.
When we looked at Pramata, we found it was better than competitors at the areas we needed most. I can quickly search and find out how many NDAs we executed last year or how many contracts contain a specific term, across all agreements. Reporting capabilities are also huge for us. Now that we have enough history in the system we can see trends and use that for future planning. These were the features that were most important when we were comparing systems.
Do you have any tips for other GCs who are trying to evaluate and select a vendor?
Michael: It comes down to functionality. Before you invest in something, you need to identify where your real challenges are and then look at which system is going to solve those best. One of our biggest pain points was not having a central and searchable repository for all executed contracts. Some other vendors we were looking at told us that once signed, you could do whatever you wanted with the final document. That’s exactly what we didn’t want! We wanted something that would enforce organization and structure after contracts are executed. So, that’s my big tip for anyone comparing vendors: Don’t get distracted by cool features alone. Make sure the system is really good at solving your most important challenges.
So, how have things been going since you got Pramata up and running? How does your team like using it?
Michael: Things are so much better than before. It’s like night and day. We have around 25 to 30 people using it across the business and, overall, they find it easy to use. Once I show them where to find the contract details or templates they need, it’s really intuitive.
One of the biggest differences for me personally is that I have much higher confidence now that if I need to find a contract that I actually have it and can find it quickly. Also, the kinds of requests that used to make me crazy, like people asking me to compare terms across contracts or asking how many contracts we have with a specific set of terms, I can just answer within a few minutes and even show them how to find the information.
Outside of my team, in the larger organization, it’s been a great experience. No one questions why we have Pramata. People see the value every time they have a “quick question” right before a big meeting and I can actually give them the answer.
So, you’d say you’re a Contract MVP now at Foodsmart?
Michael: Definitely. It’s a great feeling to know that everyone’s working with the correct templates, that executed contracts are in one place, that I can search them and report on them quickly and just overall be able to serve the business much better than when I was spending so much time trying to track down a contract or manually search for terms.
To see Pramata’s radically simple contract management solution, sign up for a quick demo today. And learn more about how we take care of the heavy lifting, to help solo GC’s and lean legal departments do more with less.
