Oaktree Improves Compliance For 300+ Suppliers With Contract Data Extraction
Founded in 1995, Oaktree Capital Management is a leader among global investment managers specializing in alternative investments with $183B in assets under management. The firm primarily operates in credit, private equity, tangible assets, and listed equities and has over 1,200 employees and offices in 20 countries.
Overview
Oaktree Capital Management is a UK-based investment firm that leverages an extensive global network of suppliers and partners to help them manage $183B in assets on behalf of their clients. As such, the legal department at Oaktree oversees a large volume of different types of contracts, 90% of which originate with third parties.
Challenge
Managing such a complex ecosystem of contracts left Oaktree’s legal team spending a significant amount of time reviewing and analyzing contracts of varying complexity. Dealing with so many contracts starting on third-party paper with unfamiliar templates and provisions also added a level of risk that was difficult to manage, including the ability to:
- Find missing clauses
- Determine which clauses deviated from preferred positions
- Check for non-compliance with regulatory requirements
The UK’s rapidly changing data privacy regulatory landscape made Oaktree’s situation even more critical. As a result, Oaktree needed to reassess their entire contract repository to ensure compliance with the Data Protection Act (DPA) and the UK GDPR .
At the same time, a few other key factors added to Oaktree’s challenges. These included:
- Dependence on manual processes and simple search functionalities to extract insights from the entire portfolio of contracts.
- A lack of guardrails led to disjointed contracting practices and posed the risk of non-standard clauses slipping through the cracks.
- Lack of access to contracts outside the legal team placed an unprecedented burden on legal to cater to business or commercial queries around suppliers.
“Contracting was siloed. Within the legal department, contracting-related processes were happening in a disjointed manner. Simple things, like version control, were super painful. Storage of executed contracts happened across multiple repositories, which made it impossible to find insights quickly.”
Solution
Given the complexity of the challenge, Sirion took a phased approach to Oaktree’s CLM implementation, using powerful AI to automate and speed up processes while ensuring security and adherence to government regulations.
Sirion’s contract AI improved Oaktree’s contract management systems with:
- A centralized contract repository for their 400+ legacy contracts that was easily searchable across the organization.
- Auto-extraction to extract metadata from current and legacy contracts.
- A clause library with categorized templates to reduce the dependence on third-party paper.
- A visual data dashboard to better analyze extracted insights, monitor obligations, and check for regulatory compliance.
- Integrations with multiple third-party risk management applications and their existing enterprise systems.
“Looking at the volume of contracts passing through the legal department could help us make decisions around capacity planning. With Sirion we could leverage insights, like how long it took to get to an executed version, to validate our internal SLAs and better inform the decisions and the conversations we were having with our business partners across the firm.”
Impact
Sirion’s AI CLM solution gave Oaktree complete visibility into their entire database of contracts that they’d never had before and access to insights across their vast pool of suppliers and partners.
With a streamlined contract lifecycle management platform in place, Oaktree saw:
- Faster time-to-value – Oaktree had insights into all of their contracts almost instantly once they set up their contract repository.
- Increased regulatory compliance – With all their contracts in one place, Oaktree could search existing contracts for missing or non-compliant clauses based on the UK’s new GDPR and DPA compliance updates. As a result, Oaktree swiftly and automatically updated contracts for 300+ suppliers.
- Standardized global contracting practices – Oaktree streamlined and standardized contract lifecycle management across multiple geographies (EMEA, NA, and APAC).
- Improved efficiency – Visibility into benchmark operational data across the contracting pipeline helped Oaktree identify areas for improving efficiency and eliminating bottlenecks.
- Automated and streamlined workflows – Oaktree gained more flexibility in their contracting process and gave time back to legal and procurement teams across the company.
“With Sirion, it's really easy to find insights like which contracts have a particular clause that keeps getting renegotiated time and time again to try and speed up those cycles.”
Additional Resources
Mastering Contract Negotiations: Everything You Need to Start
AI Contract Data Extraction: Benefits to Cross-Functional Teams
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