In that spirit, we wanted to give you the opportunity to get to know one of the humans behind Pramata better. Our Co-Founder & CEO, Praful Saklani, recently joined Shai Mehani, CEO & Co-Founder of In-House Connect, as a part of their “Humans of LegalTech” webinar series.
—
Shai: Welcome to In-House Connect’s Humans of LegalTech! I’m thrilled to have with us today Praful Saklani, Co-Founder and CEO of Pramata, the radically simple CLM platform trusted by some of the largest companies in the world for over 17 years.
Praful: Thank you for having me!
Shai: I’ve interviewed a lot of legal tech founders over the years and most of them don’t have any legal background. Is that the case for you?
Praful: That is the case, but I will say that I very much founded Pramata on the basis of true legal pain that I think almost anybody who watches this video will empathize with.
Back in 2001, I was selling a previous company, and we were going through due diligence. I’d hired a bunch of attorneys, and they came in and dove into a legal banker’s box and started rifling through all of our contracts. We were a relatively small company, and I thought that larger companies would have a better way of doing things, not just contracts in a box, so I said, “This must be a lot easier for the larger companies, right?” And their response surprised me!
They said, “First of all, you have a box! Second of all, the box doesn’t contain a lot of junk.” So, I learned that at larger companies, it was just a big Sherlock Holmes kind of search mission. That it’s really hard for people to get their arms around this kind of information.
So, about five years later, when I was looking at starting a new company, I went back to that problem and said, “Let me look into that contracts thing again and see if anybody’s solved it yet.”
Shai: And that’s when you thought, “I’m going to build a CLM?”
Praful: Basically, yes. The first thing I did was reach out to a bunch of people I knew who were General Counsel or involved in contracts on the sales side or the vendor side and I asked this smattering of people what they’re biggest challenges were.
They kept pointing to a fundamental problem, which was they didn’t even know what existed. Each time they needed to sell something new to an existing customer or needed to renegotiate with an existing vendor, it was like having to put together a puzzle to understand what had come before that and if it was ever amended or overridden with something else along the way.
This puzzle became the DNA of the solution that we worked on as a founding team at Pramata and continues to be at the core of our solution today. Because, one little known fact is that for most companies, 80% of the paper they trade is rooted in something they’ve done in the past. But it’s so difficult to locate those past contracts that it becomes a scavenger hunt every time.
Shai: It sounds like the first problem you wanted to tackle was helping companies get their arms around their contracts, extract the data, put it into a dashboard or a database of some kind that’s searchable.
Praful: Yeah, so at the start, it was more about just extracting the data from individual contracts and putting it in a database. One thing I think all the lawyers listening will know is the concept of order of precedence – how information changes over time. Like, this was originally a termination, with only termination for cause. Somewhere along the way, termination for convenience was entered. Somewhere along the way, somebody said it was 60 days. So when somebody wants to either do a new transaction with that customer or wants to go and even meet with that customer, the first thing they need to know is what’s really active as of today.
So it was really about understanding how you build that tree, and how do you build the database that underpins that and the algorithms that underpin that to roll all that information up? That was really the fundamental thing.
Take expiration dates as an example. Wouldn’t it be great if all contracts just had a simple expiration date listed? But in our experience, the vast majority of contracts have the expiration date written similar to, “two years from the date of the first order” or “180 days after provisioning.” So, there’s all kinds of things you have to look for to extract an expiration date. That gives you an example of the kinds of things we focused on from our first customer onward.
Shai: How did you choose the name “Pramata”?
Praful: Pramata is an ancient word from the Indian language of Sanskrit. Like many of these ancient words, there are many meanings, but they all revolve around knowledge and the knower. So, Pramata is really the thing that brings knowledge about contracts to our customers.
Shai: How has Pramata evolved since your start in 2006?
Praful: For a long time, up until about three years ago, we were really focused on that post-signature part of the contract management problem. And still to this day, if you’re a company that really needs to know what all your relationships look like with your contracts, Pramata is the company for you.
The way we’ve deepened that over time is by having a big tent in terms of who got value from that data. So yes, it was Legal, yes, it was the contract management team, but also some of the biggest users of our platform and of our data are Finance, Sales, Procurement. When you look at who all needs to understand contracts in a business, it turns out to be a very large group of people.
Then we started to look at how you leverage that information to streamline your pre-signature process. How do you use it to create the right kinds of templates? How do you use it to understand which are the clauses that you negotiate most? How do you get deeper into what you see across your portfolio of contracts then? How do you quickly set up workflows? We’re talking about hours, not days. That’s how we took that advantage and that proficiency that we have with data and we pushed it through the entire contract lifecycle management process.
Shai: What makes Pramata unique in the industry across all the other CLM and contract management tools?
Praful: Here’s the big thing. The vast majority of companies really focus a lot on standardization of the process and the templates and the language as the first problem. And the repository is kind of a secondary problem. The big difference is, in our view, they actually go hand in hand and side by side. You can make a lot of progress on both simultaneously. We believe that you have to have visibility into everything that’s in every contract, regardless of where it came from or how it came in.
Most of the CLM companies over the last 10 years have focused on standardization and workflow and templating. The idea is that if you can figure out a way to essentially minimize the amount of true creativity in the contracting process, and you can keep people within guardrails and you can make sure those guardrails are policed by approval cycles, etc., then the system will work really, really well.
And we’ve noticed that it does work quite well for things like NDAs or simple statements of work. Relatively simple contracts can be highly automated.
The problem is, when you get into bigger deals, $100 million or even $1 million, at a Fortune 100 company, it’s not going to be standardized. That’s where negotiations really happen.
Pramata’s biggest difference from other CLM companies is that we just take all those contracts as they are. It doesn’t matter how many, how disorganized, we give you a solution that works both when you can standardize things and when you can’t. We take your data as-is. Give us the ugliest contracts, give us the simplest contracts. It’s fine. We’ll make sure they all get organized. You want to do simple workflows, you can create simple workflows. You want to create complex workflows. You can create complex workflows. You don’t have to change your process to adhere to the software. You can actually meet the businesses where they are in the real world. So I think that’s a huge differentiator with Pramata’s approach.
Shai: What does a typical customer onboarding look like? How long does it take?
Praful: One of the key brand promises that we have is that we do the heavy lifting for you. And what I mean by that is that we are an end-to-end solution. Not only do we provide the software, but we also provide the humans in the loop, so that for any automations that are required, whether it’s for data extraction, data normalization, integrations, etc., we include all of that as part of our package.
Now, obviously, when you deal with very large enterprises, they have their own teams and you collaborate with their teams, but I think particularly for legal departments that are with mid-sized companies, maybe have limited access to resources, technical resources, IT resources, keeping it simple is very critical.
Another part of our promise is that for all customers, we like to define the really big value milestones within 30 to 60 days. When we look at the people who’ve come to Pramata, switching from other solutions, many of them were six months, a year, two years, three years into other things, and had like a 10% or 30% penetration in terms of the percentage of their contracts that were either going through the system or in the system. So getting really far within 30 to 60 days is critical.
And again, the way we start is that we tell people to just upload all their files. Don’t cleanse them before you send them to us. We have a Cleanse process that de-dupes everything, figures out which ones are contracts, which ones have been fully signed, which ones are master agreements, which ones are amendments, order forms, etc. So, we do all of that.
And when there are exceptions, our team – the humans in the loop – works through those exceptions to make sure that they’re manually cleansed or brought back into the set, because all automations have dropouts. And then in parallel with doing that, we say, if there are quick workflows that you want to get started up, maybe NDA automation, simple statement of work automation, let’s get that started up in the first week.
We’re doing great things with GenAI so that we can actually help you derive a template form from contracts that you’ve signed in the past, and we can make it so you don’t even have to create the template form. It can be created for you. So there’s all kinds of interesting things that you can do to make this go really fast. And we think that’s what the market should be demanding, which is, I want a full system that works across all of my contracts, and I want it up and running fast.
Shai: It seems like in general there’s a pretty low level of customer satisfaction with CLM tools. Why do you think that is, and what’s Pramata doing to address that?
Praful: It’s true, and it’s not just with CLMs. With almost any enterprise software, there’s a very “happy path” in which, if things follow the happy path, everybody’s going to be happy. I think the reason why there’s a lot of disillusionment with CLM is because so many things that those of us in contract management deal with just don’t fall into that happy path. And then, yes, you can resolve the problem, but you’ve got to click this button and then you have to manually enter this information. Then you have to click this other button, then send it to another person. And then there’s this fourth screen…
And then let’s talk about your contract history. There’s this AI button and you just click it and it’ll suck all the data out of all your history. But then you look at that data and none of it makes any sense!
I think people were sold that this thing is going to make everything a lot easier, and in the majority of cases, they learn they now need to hire somebody to manage this system and feed the beast. Or now they need to train their people to enter data in a very specific way. There’s a whole bunch of new things that were added to the process. So is it speeding things up? Is it making their lives easier?
I think that’s the reason why there’s a lot of disillusionment, because things prove to be more complicated to implement in the real world, especially when you’re dealing with situations that aren’t relatively simple templates, relatively simple workflows that could be, you know, straightforwardly automated.
Shai: You mentioned generative AI (GenAI). Can you talk a little bit about what Pramata is doing in the GenaAI world and how you think that’ll impact CLM technology forward?
Praful: Almost all of you are starting to hear the GenaI hype. And right now, we’re probably about where the smartphone was in 2007 when Apple first released the iPhone. And everybody knew some really cool forward looking friend that was playing around with it, but most of us were still clutching our blackberries and saying, “Hey, I need my physical keyboard. Don’t take this!”
But you remember what happened from 2007 to 2009. Suddenly you went from only the creative types using smartphones, to my parents wanting one, and then an eleven year old is using it and seems better than I am at it. It moved very quickly. And GenAI is between those two stages right now.
It’s not going to just be a feature of contract management: It’s going to fundamentally change the way all the phases of a contract, particularly pre-signature, work. I believe that someone will be able to email a proposal to an email bot and the bot will be able to look at that proposal and draft a first draft contract from it without anyone even filling out a form, because that proposal will already tell you who’s the customer, what are the terms, how do they deviate, etc. And then it should be able to automatically figure out what approvals are needed.
It should be able to, for example, take an existing document and say I’d like to amend this with these three things and create a pretty darn good first draft. And leading early adopters, including early adopters in our customer base, are already using GenAI to start to do these things.
At Pramata, it’s a fortunate coincidence that we totally overhauled our platform three years ago, and modernized the whole thing, which meant that as GPT-3 and then GPT-4 came out, we were able to embed it right in the heart of our platform. So now we can use GenAI capabilities and services literally anywhere in our platform, whether it’s request drafting, negotiation process, or reporting.
But as for how GenAI’s going to be used in the future, my simple response to everybody is that within three years, there’ll be nothing that we’re doing in legal tech that isn’t GenaI. It will be everything. I mean it won’t be a “feature,” it’ll just be a question of which platforms and which companies are leveraging it more effectively. It’s not going to be some side thing. And it’s going to happen very quickly within 24 to 36 months.
Shai: Thank you so much for joining us today. Any final thoughts?
Praful: The last thing I’d like to add is that at Pramata we’re focused on “radically simple”. So as you look at contract management, I urge you to look at the following principles, see whether the product you’re looking at and the vendor you’re talking to is really going to make your life simpler. And not simpler two or three years in the future. We’re talking about in less than 30 days. In less than 60 days, are they going to simplify what you and your team need to do so you can focus on high-value things?
And then, are they providing value not just to your legal department and not just to legal operations, but are they providing value across the organization? Because contracts are one of those things that touch every single corner of your organization, and it should be easy for people to get access to that information to do their jobs. It should not be this dark art that’s hidden behind six veils that you need to find the special code to unlock.
So remember, keep it radically simple, and it should get only simpler from here. And eventually, it should be as easy as when an eight year old uses an iPhone.
If you’re interested in learning more about how Pramata can transform contract management at your organization, contact us today.
