Winning with Your Contract Playbook: Strategies for Success

What is a Contract Playbook?

Simply defined, a contract playbook is a comprehensive collection of processes, procedures, and tools designed for specific transaction types. A contract playbook is a version-controlled, continuously-updating, structured repository of best practices, based on risk profiles, for standardizing, streamlining, and improving the efficiency of contracting processes, and improving compliance with relevant legal and business requirements. Contract playbooks improve contracting processes by:
• Training people – Senior resources can create playbooks to train junior people in how to manage particular transactions, or new people in how to run a whole department
• Transactional project management – Playbooks allow department members to assign tasks to themselves and monitor task completion
• Easier due diligence – Everyone is using the same playbook as a starting point, which simplifies reviews of playbook content during due diligence
• Developing a common language – Everyone will use the same descriptive terminology , so terms like "force majeure" and "indemnification" are consistently understood
• Orderly storage – Having a single source of truth for all playbooks, located in a centralized location (or in a couple of centralized locations, perhaps organized by geography or department), allows users to easily search, locate, and reference specific playbooks, and maintain control over versions of them
• Storing data and metrics – Tracking the playbooks used during contract negotiations helps identify issues that can be resolved in a given playbook; tracking metrics of playbook use allows for the identification of bottlenecks in contract negotiations
• Speeding contract negotiations – Playbooks speed contract negotiations by removing ambiguity and incomplete clauses that might slow down the negotiation process
Contract playbooks can assist in the creation of a contract repositories and license management systems, and can facilitate compliance with far-reaching regulations, such as PCI and GDPR standards.

Essential Features of a Contract Playbook

Key elements of an effective contract playbook are strategies, tactics or policies the company has identified will serve to "win" in contract negotiations and structure. These control risk and protect the company from the many risks associated with the particular transaction or circumstances that the section addresses. Categories may include terms, conditions, clauses and negotiation strategy for topics such as representations and warranties, limits on liability or indemnification language, or any terms that the company insists that the other party accept, knowing that this is a "dealbreaker" for them.
These are sections that the company has deemed are of critical importance, and if included or excluded could materially upset the parties. The sections have been drafted in a general format so the specific application to each company’s circumstances can be addressed. This allows for the provisions to be included in any contract, can be tweaked, revised or utilized as-is. For example, indemnification sections are usually custom and then repeated in similar contracts. A playbook can have a "standard" provision, which can easily be altered to suit each situation. You can use a playbook to deal with aspects of your organization that are unique to your business, for instance, a software-as-a-service business model.

Building Your Own Contract Playbook

Essential to the effective use of a contract playbook is that the playbook is customized and adapted to the unique requirements of the business to which it is to be applied. A one-size-fits-all approach to a playbook is sub-optimal to say the least because it does not deliver the most value and means that the playbook is unlikely to be closely aligned with the business practices in the applicable area of the business.
Because the playbook is designed, in part, to be an aide memoire, it is important that the playbook be as familiar as possible to the lawyers using it. Lawyers tend to think in terms of drafting clauses and sections and apply their judgment and experience when doing so. Further, lawyers will often think about how to apply legal concepts or doctrines to the subject matter of the relevant playbook. This is especially true where the contracting process is being used to control risk. For this reason, legal colleagues familiar with the contract subject matter should be brought into the playbook development process early on.
The development process starts by identifying the scope of the playbook which helps to determine the number of chapters, sections and clauses the playbook will contain. In determining the scope of the playbook, however, bear in mind that doing so is an art and is subjective, rather than a science. It is helpful to start the identification of the scope of the playbook from the whole, breaking it down into a series of chunks, then checking whether the chunks align with the way the business wants to do business. Chunking the subject matter allows for flexibility in the development process and enables the delivery of a bespoke tool that best reflects the needs of the business.
Topics for the playbook could include:
Perhaps the best way of identifying the playbook scope is to test it against the various types of contracts the business uses, whether the contracts are used for sales, purchases or service provision. Do any of the topics suggested above need to be changed, added or deleted? Do the topics selected sufficiently reflect the way in which the business operates, from a contractual perspective? Are any of the topics too detailed or too high level? Would any additional topics help more effectively tailor the playbook?
Before starting the development of the playbook in earnest, remember that it is never set in stone. Changes will likely be needed as the playbook is developed and used overtime, especially when there are changes within the business or relevant legislation.

Leveraging Technology to Create Your Contract Playbook

As with other areas of business, technology offers many advantages for managing your contract playbook. For example, most contract management software now includes modules that offer playbook functionality. Such playbooks can be used to maintain and guide consistent drafting of your forms and agreements. Be sure to provide all users with training on the playbook functionality. Without such training, users will not see the value in living with that functionality. Doing so will not only better equip your users with a tool for improving their effectiveness, but also significantly reduce the amount of time involved in drafting and negotiating agreements . In addition to such playbooks, other technology tools should be explored, such as digital document management and artificial intelligence tools. Document management tools with search capabilities can help analyze and bring to your attention significant changes or creations of similar forms. AI tools are fast becoming capable of identifying issues in dockets that may be important or require you to take action. These tools should be considered in the arsenal of tools available to your contracting team.

Maintaining a Contract Playbook Best Practices

Building a contract playbook is not a one-and-done exercise. Suppliers should regularly review and update, and they should actively develop a robust system for interacting with internal departments to understand and act upon suggested changes from end-users. Regular audits of all contracts should be conducted and strategic risks should be identified. Senior management buy-in will only be effective if all levels actually use the playbook. The best way to accomplish that is for end-users throughout the organization to feel that their issues have been heard and that they are being addressed through the evolution of the playbook.
While creating a concise, clear playbook helps ensure accuracy and a streamlined process, such a document is not static. Formal annual or quarterly audits should be conducted with an eye toward: (1) strategic risks that may have developed as a result of new initiatives or market shifts, and (2) gathering and acting on feedback from end-user experience. With technology, including processing transactions in an ERP system or a contract repository, real-time analytics can provide insight into performance and compliance at a granular level. Internal audits can highlight process issues or risks that can be addressed in the context of supplier relationships. Making people feel a part of the process will encourage changes to be implemented by end-users and recognized by the relationship managers who oversee those suppliers.
When not updated on a regular basis, a contract playbook can become nothing more than an outdated and burdensome list of processes. If there has been turnover in the business unit or discipline that is impacted by suppliers and the legal work that supports the relationship, make sure that there is an active handoff and that the successor has the most up-to-date playbook to support that work. That should include all filed forms and relevant guidance.
While a playbook should identify a framework for the types of agreements generally used for similar types of supplier relationships, it should also mark exceptions or inclusions that should be used for those suppliers that have unique circumstances. When audited and updated, doing so in real time and with awareness of such nuances makes consistent organic change easier to implement.

Challenges that a Contract Playbook Can Help You Overcome

Implementing a contract playbook to streamline and standardize the contracting process can bring many benefits, but it can also pose challenges for businesses. One of the most common challenges is ensuring consistent usage across different departments and locations. To address this issue, it’s crucial to have a central repository for the playbook that all employees can access and refer to. This could be an intranet site or a shared drive that is easily accessible from anywhere in the organization.
Another challenge is ensuring that everyone understands and correctly uses the contract playbook. This can be addressed by providing ongoing training and resources for employees on how to use the playbook. This could include regular workshops, webinars, and online resources. Additionally , having a designated person or team responsible for maintaining and updating the contract playbook can help ensure that everyone is using the most current version.
It’s also important to regularly review and update the contract playbook to reflect changes in laws, regulations, and company policies. This can be done on a quarterly or annual basis, depending on the nature of the business and the complexity of the playbook. For example, if your business operates in multiple states or countries, it may be necessary to review and update the playbook more frequently to account for changes in laws and regulations.
Finally, one of the most effective ways to ensure consistent use of the contract playbook is to make it easy for employees to provide feedback and suggestions. By soliciting feedback and using it to improve the playbook, employees are more likely to feel invested in the playbook and its success.