Scaling Your Legal Expertise: Why Contract Playbooks are Essential

As a legal professional, you've spent years honing your craft, developing a keen eye for contract nuances, and building an arsenal of go-to clauses. What if you could capture all that expertise in a single, easily accessible, and sharable resource? Enter the contract playbook – your secret weapon for streamlined, consistent, and efficient contract management.

What is a contract playbook?

A contract playbook is a comprehensive guide that distills hard-earned knowledge and best practices into a structured, easily reference-able format. It's not just a collection of clauses; it's a strategic tool that encapsulates preferred positions, negotiation strategies, and risk assessments for various contract types.

Think of it as creating a digital version of a legal mind – one that can be shared, updated, and leveraged across your entire team or organization. A well-crafted playbook typically includes:

• Guidance on when to use any number of pre-approved contract templates
• Standard preferred clauses and fallback positions
• Negotiation guidelines and strategies
• Risk assessment criteria
• Approval workflows 
• Best practices for drafting and review
  
  

Why create a contract playbook?

In today's fast-paced legal environment, efficiency is key. You’ve heard the phrase “don’t reinvent the wheel” - well, a contract playbook can serve as a mechanism to ensure you and your team aren’t having to re-learn how to approach different scenarios when it comes to negotiating contracts. A hallmark of a well-constructed contract playbook is that it can be leaned on by any member of your team, and ideally produce the same output, regardless of which team member is using it. 

Without a contract playbook, everyday tasks can become cumbersome and tedious due to a lack of structure in how contract review work is approached. Legal teams may be pulled into routine contract matters, which other internal teams could handle, which diverts their time and attention from more complex and strategic issues. Those other internal teams that could be helping lack the guidance and clarity to handle contract review independently, which can lead to inefficiencies and reduced agility. Having a contract playbook in place is critical for setting your organization up for success.

Recognizing the challenges faced by legal professionals in creating contract playbooks, Screens.ai has released our new Playbook Generator designed to address the time constraints that prevent legal teams from developing contract playbooks.

Efficiency and time savings

A well-structured playbook dramatically reduces the time spent on routine contract work. Instead of reinventing the wheel for each new agreement, you and your team can quickly access pre-approved language and strategies. Having clear guidelines and approval workflows helps take the guesswork out of what your team should do next in any given situation. This benefit extends beyond legal teams as well. By empowering non-legal teams with clear expectations and guidelines, other departments can handle basic contract tasks, reducing bottlenecks in the legal department and allowing legal teams to focus their expertise where it’s most needed - on complex issues and strategic matters.

Further, if your organization can identify the specific areas of risk you want to focus on for a given agreement type (for instance, NDAs), you can give your team permission to not negotiate clauses that fall outside the scope of those risk criteria that matter to your organization. This approach can allow for more focused negotiations, and you can even potentially eliminate negotiations altogether if your risk criteria are fully met. 

Consistency and risk mitigation

By standardizing your approach to contract negotiation, you ensure that contracts adhere to your organization's preferred terms and risk tolerance levels. To the extent your counterparty doesn’t agree with your standard preferred positions, playbooks will often provide various fallback positions with increasing levels of “give”. Providing this roadmap of how to approach those negotiations allows your team to negotiate more confidently and effectively which often leads to faster deal closures and more favorable outcomes. Arming your team with this information is essential as it ensures consistency and not only reduces errors but also minimizes potential legal exposure.

Improved onboarding, training, and alignment

For new team members, a contract playbook serves as an invaluable training tool, allowing them to quickly understand your organization's approach to preferred and fallback positions, what your risk tolerance is, and more. Playbooks can also be a way to store and share institutional knowledge as members of the team come and go. 

Additionally, contract playbooks can serve as a single source of truth regarding what terms your organization seeks in contracts which can prevent all sorts of missteps during negotiations. 

For instance, what if one member of your team unintentionally undermines another member of your team by offering more favorable terms to your counterparty in a separate transaction? Often businesses will have multiple contracts running concurrently with the same vendor - having a single source of truth reduces the risk of conflicting positions being presented to that vendor. You can imagine how presenting a unified stance on key issues can strengthen your organization’s negotiating power.

Data-driven improvements

As you use and refine your playbook, you'll gather valuable data on negotiation outcomes, clause effectiveness, and process efficiency. 

Understanding how frequently your preferred position is rejected and how often your fallback positions are accepted can help inform strategic adjustments to your playbook. For instance, if your preferred position is that your counterparty’s liability is capped at 2x 12 months’ fees, but they’re only agreeing to that 25% of the time, and the other 75% of the time they’re agreeing to your fallback position of 12 months’ fees, you might update your playbook to have your preferred position be 12 months’ fees. Of course, any adjustments are dependent on your organization’s risk tolerance and how much you desire to reduce negotiations. 

Getting started with your playbook

Creating a contract playbook may seem daunting, but the long-term benefits far outweigh the initial investment. As with many things, don’t die on the hill of perfection when you’re just starting to create your playbook! Here are some steps to help you get started on your journey of creating a contract playbook:

1. Identify the most common types of contracts you work with (e.g., NDAs, service agreements, DPAs, etc.)
   1. There are so many different types of contracts businesses deal with that this might feel overwhelming at first. If you start by focusing on just a few core agreement types your organization encounters, you can significantly narrow the scope of this exercise and increase the likelihood of adoption by rolling out one playbook at a time as opposed to asking your team to adopt many playbooks at once.
2. Document your preferred and fallback positions for each contract type you identified in step one. 
   1. Read through a contract and flag the provisions you and your organization care about. Then, for each provision identified, detail what your preferred position is as it relates to that provision along with any acceptable fallback positions (e.g., if your organization cares about your counterparty indemnifying you for third party IP infringement, flag that and note that your preferred position is for all types of IP to be covered by the indemnity, but that you’re willing to accept an indemnity that only covers copyrights and trademarks if needed).
   2. If you’re unsure of what these preferred and fallback positions should be for your organization, a great place to start would be to undertake an audit of a subset of your executed contracts and track what your organization has agreed to previously. Take this data and have a conversation internally about the frequency of various positions you’ve agreed to previously. Often, this data can lead you to what preferred standards your organization should adopt.  
   3. Robust playbooks will often contain actual examples of clauses/language you should use; this step often dovetails with the audit of executed contracts mentioned above.
3. Outlining negotiation strategies and risk assessments
   1. Think through how you and your team should approach negotiations with your counterparty and come up with a set of best practices as it relates to redlining, version control, and how to communicate with your counterparty. 
   2. Risk assessments are critical for ensuring the correct contract playbook is applied during negotiations. Often organizations have “high” and “low” risk playbooks for the same contract type and their application depends on any number of factors including:
      1. Whether your counterparty will have access to regulated or sensitive data;
      2. The dollar value of the contract;
      3. Whether your counterparty’s products are going to be mission-critical to your business; and
      4. Whether your counterpart’s products are going to be embedded in your own products or services
4. Establish clear approval workflows
   1. Documenting what deviations from your playbook require internal approval is critical to ensuring appropriate stakeholders are able to evaluate the impact agreeing to that deviation might have on the business. Agreeing to deviations without proper scrutinization can set an unwanted and potentially dangerous precedent for future negotiations. 
   2. Additionally, with clear approval workflows, your organization will see streamlined decision making. Understanding who needs to approve what will help prevent approval bottlenecks and negotiators will feel more confident and empowered knowing exactly how and when to escalate internally. 
5. Don’t be afraid of continuous improvement
   1. Remember, your playbook is a living document. As you use it, you'll discover new insights and opportunities for refinement. Lean on data related to how often various positions are agreed to after negotiations to make informed decisions on updates to your preferred and fallback positions. Feedback from internal and external stakeholders alike can also help inform strategic changes. Embrace this iterative process – it's how your playbook becomes an ever-more-powerful extension of your legal expertise.

Get help from a community of experts 

In today's competitive legal landscape, a well-crafted contract playbook isn't just a nice-to-have – it's a strategic necessity. 

Playbooks are typically thought of as tools to advance an organization’s preferred contract requirements, but at Screens.ai, we believe contract playbooks aren’t just for organizations, they’re for individuals, too. That’s where our Screens Community comes into the equation. The Community is where subject matter experts share their expertise on various types of contracts; these experts have embedded their knowledge about a particular type of contract into a playbook that we call a screen. Those screens can be used by anybody to review contracts from that expert’s perspective and to identify deviations from that expert’s preferred standards. 

We believe the Screens Community represents a leap forward in the democratization of knowledge - imagine the possibilities! Are you engaging with a builder for a construction project? Check out the Small Works Contract: Builder's Checklist. Need a gut check on an NDA? The How to Contract: Low Risk Non-Disclosure Agreements screen might be the perfect fit. Scratching your head over a lease?  There are community screens for retail, office space, and industrial leases. The list goes on and on, and we’re adding more community screens all the time. 

By capturing your subject matter expertise in the format of a community screen, you're not just improving your own efficiency, you're also creating a scalable asset that enhances your value to clients and organizations alike. It’s also a fantastic way to build your own personal brand and share your hard-earned knowledge with others. Isn't it time you unlocked the full potential of your contract knowledge?