Contract Playbook: Contract Management Playbook For Modern Organizations

Table of contents

1. What is a Contract Playbook?
2. What is a Negotiation Playbook?
3. Who Uses Contract Playbooks?
4. Benefits of Using Contract Playbooks
5. How To Get Started With Designing Your Contract Playbook
6. How ContractKen Helps In Designing and Implementing Contract Playbooks

Let's get started.

What is a Contract Playbook?

A contract playbook is a manual for contract review which sets out the important terms, processes, and exception definitions per contract type for a company. It usually has pre-formulated standard contract clauses and references to the person or department responsible for specific issues.

Key elements of a Contract Playbook

• Sample language and context - omission and commission
• Preferred position / Acceptable position / Fallback position / Not Acceptable position
• Deal Breakers
• Must Haves
• Approval authority/escalation matrix
• Jurisdiction-specific clauses (sample language) and their subsequent risk-approved deviations
• Checklist to ensure a final sanity check

Why are Contract Playbooks important for managing risk?

• It is a manual for contract review and negotiation and sets out the important terms, processes, and exception definitions per contract type for a company.
• It defines the scope of action per contract topic and thus provides the target audience with the “must haves” and “deal breakers”. There is clear guidance on risk thresholds acceptable for each area.
• Organizations can also add explanations for each clause, which serve as argumentation in contract negotiations.
• It usually has reference to the person/department responsible for certain issues.
• Pre-formulated standard contract clauses round off a contract playbook.

What is a Contract Negotiation Playbook?

• A negotiation playbook defines the scope of action per contract topic and thus provides the target audience with the “must haves” and “deal breakers”.?
• There is clear guidance on risk thresholds acceptable for each area.
• Organizations typically add explanations for each clause, which serve as argumentation in contract negotiations.

Who uses Contract Playbooks?

Multiple teams within an organization use contract playbooks. Typically, roles-based access is applied to the content and rules/checklists/logic within the playbooks.

Primary Contract playbook users are:

• Legal – Internal and external teams reviewing and approving contracts are primary users of contract playbooks. A well-organized and readily accessible playbook greatly reduces the 'dead time' in which contracts sit in people's mailboxes, waiting for approvals or clarifications on minor issues.
• Contract Management / Administration
• Sales Operations / Project Management
• Sourcing / Procurement
• Compliance

Are contract review checklists and Digital Playbooks the same?

• No, review checklists are a subset of playbooks. Just depending on checklists can be a dangerous practice, as contract review and negotiations need a lot of context and understanding of subject matters.
• Converting the playbook principles to a set of questions usually results in a checklist

How do Digital Playbooks work?

• Adding playbook templates, rules, exceptions, and other details to a system that is connected with contract review, negotiations, and management platform - is the process of digitizing your playbooks.
• An online system to host your playbook is very useful to keep it updated as various parts of the org learn new experiences every day

What are the main benefits of using Contract Playbooks?

Benefit 1. Distribute authority across departments

Without a contract playbook, sales and procurement teams are frequently forced to seek answers from the legal department during the negotiation process. Unfortunately, the legal department is usually overburdened with other matters, so it may take them a few days to respond to a seemingly simple question.

The contract playbook establishes a framework that allows sales and procurement employees to make agreement decisions during the negotiation process without consulting the legal team at all.

They can simply find a replacement clause in the playbook, insert it into the contract, and continue negotiations knowing that this amendment has already been pre-approved by company standards.

Benefit 2. Save time and money

With contract responsibilities distributed more evenly across departments as a result of the empowerment of your contract playbook, the legal team can devote more time to more pressing matters. Less time spent on minor tasks allows employees to concentrate their efforts and work toward larger-picture goals, such as further improving the contract management process to increase efficiency.

Not to mention a reduction in resources spent on hiring outside counsel and training new employees. Your in-house team should be able to handle more tasks than outside counsel would normally handle, and new hires can refer to the contract playbook for guidance as they learn how to negotiate your company's unique contract cycle.

3.?Faster contracting cycles i.e. higher speed to signature

Spending less time negotiating leads to greater efficiency in your overall contract process.

Whereas sales and procurement employees used to need the legal team's approval for nearly every minor negotiation, they now review and approve revisions themselves, greatly reducing the amount of time the other party is waiting to hear back about their suggestions.

This greatly accelerates the negotiation and revision process, allowing sales to close more deals in less time. By processing more agreements faster, you will increase revenue for the company while also improving your business or customer experience.

How to get started with designing and implementing your contract playbooks?

To start with the process, you need to perform some preliminary research. This involves more one-on-one conversations and group discussions with relevant stakeholders around:

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