When many think of ‘playbooks’, the image of a coach knelt on the sidelines of a game, furiously scribbling out team plays might come to mind. While this tool has its roots in sports, playbooks are continuing to gain traction within in-house legal teams. No matter what you are trying to achieve, you should always have a clear set of strategies to get to your goal. Whether your goal is winning a game, or getting a transaction over the line, a playbook ensures that everyone in your team is on the same page. This article will discuss how your in-house teams can implement the use of contract playbooks.
What Are Contract Playbooks?
In the world of contracts, in-house teams use playbooks to set out:
preferred positions (your model clauses);
fallback positions (what you will accept if your preferred position is not accepted); and
deal-breakers (those clauses that you will never accept).
In practice, a playbook could take the form of a document that outlines these principles. However, this is just the starting point. After deciding upon different precedents and positions for your in-house team, this playbook could then be automated and built into technology, like an online portal. This technology will then assist your negotiations so that they are guided by pre-approved positions.
Well-designed playbooks have the ability to:
ensure consistency across contracts; and
promote better quality outcomes.
To help conceptualise the value of playbooks, consider how you use template documents for contracts. If you had to draft a contract from scratch every time, there would be a lot of wasted time associated with negotiating and entering into contracts. If templates alone can save time, a contract playbook can make the process even more efficient.
When designed and used effectively, playbooks can become just as indispensable to in-house teams as standard templates and precedents.
Getting Started With Contract Playbooks
Set out below are six tips for setting up contract playbooks that will increase efficiency and communication within your in-house team.
1. Build a Minimum Viable Product (MVP)
Developing and maintaining a good contract playbook takes time and effort. That said, building out the playbook should happen in a measured and sustainable way. If you try to map out every possible iteration of your negotiation position from the start, the process will be overwhelming.
Instead, focus on capturing the essential requirement for a ‘minimum viable’ playbook. You can do that by capturing positions related to one specific type of contract, or a set of commonly negotiated clauses.
Begin with recording the preferred and fallback positions for this narrower scope. Then, flesh these out as you encounter the contracts in your day-to-day work. This approach also means that your in-house team will not need to take time away from completing legal work. Your lawyers can provide ongoing legal assistance while incorporating legal knowledge into the playbook.
2. Have Someone ‘Own’ the Playbook
Having someone take the lead in transforming information from lawyers into a playbook-worthy output can ensure that someone’s always moving along the development of the playbook. This playbook owner can also have a role in analysing the lawyers’ compliance with the playbook. After identifying any deviation from the playbook, it is helpful to unpack why the deviation occurred. If the playbook is not applicable to a particular scenario, it will also help you understand which parts of it need to change.
It is also important to have an authoritative person to approve amendments and changes to the playbook. The approver may be the same as the playbook ‘owner’. Alternatively, you may wish to work with an external provider to design the playbook. If so, you can give this provider full autonomy to build out the playbook and rely on their legal expertise to make the right calls.
Waiting for the authorisation of changes can slow down contract negotiations and undermine some of the playbook’s value. If you have clarity on how you can make and approve changes from the outset, the process will be more efficient.
3. Design Alongside the Legal Work
Finding the time to develop a good playbook is often a challenge. For in-house teams that are time-poor, it can be tempting to save the challenge of tackling playbooks for a quiet day (if there ever is one!).
However, designing the playbook separately from the day-to-day legal matters that are the subject of it is incredibly difficult. Designing a playbook before doing legal work can result in a document which is aspirational and does not reflect the reality of legal positions.
Therefore, you should aim to develop the playbook simultaneously as you complete legal work. This way, the playbook can be built iteratively with input from lawyers. You can then create a playbook which is rooted in practice, rather than theory.
We have seen clients spend a lot of time creating a playbook which sets out idealised scenarios, only to have that playbook abandoned in favour of the reality of business practices. For the playbook to be effective, it needs to be developed and tested in real time.
In practical terms, this might mean jotting down some bullet points while you get the specific piece of legal work out the door. Then, you can flesh out the details and pop the information into the right format at a later time. This is where a playbook owner comes in handy, as they can ensure your legal work is captured in the playbook.
4. Know Your Players
Consider who the playbook is being designed for. It could be used by:
lawyers in your in-house team;
your external legal provider;
commercial team members; or
any combination of these.
Even if one set of players are responsible for preparing the playbook, you need to ensure you receive input from the group who will use the playbook. If you can clearly identify who the playbook will help, you can then work towards ensuring that the content of the document is relevant to its users.
For example, your legal team is building a negotiations playbook for leases. However, business managers are who will be applying the playbook when engaging directly with landlords. Therefore, you will want to ensure that there is alignment between your legal and business teams. If not, you might end up with a playbook that makes legal sense, but does not make commercial sense.
5. Know Your Game
When kicking off the process of designing a new contract playbook, it is helpful to understand:
what your team will use the playbook for;
how your team will use the playbook; and
the types of contracts that it will cover.
Asking these types of questions is all a part of clearly defining the problem that the playbook will help to solve. Situating the playbook within an overarching challenge will also help you identify what other systems or processes are needed to support the playbook.
For example, your in-house team spends a lot of time advising on positions for supply agreements. You find yourself repeating which same clauses can be changed, subsequently wasting time. Here, you can develop a playbook which allows your business team to respond to negotiations with pre-approved positions.
Contract playbooks need to sit alongside precedents and templates. Part of developing the playbook may mean updating templates so that they are consistent. You may also need to adopt the different wording of clauses to reflect alternate positions within the playbook. If you are clear about the purpose of the playbook, you can ensure that your team has access to the right kind of templates.
6. Guide the Exercise of Discretion
Finally, the playbook should be very clear as to the amount of discretion that a user can apply.
For example, imagine a contract playbook is silent on what changes can be made to the confidentiality clause. Here, it can be tricky for a user to know how to interpret this silence without further guidance.
Does it mean that no changes can be made to the confidentiality clause? Or, does the silence mean that any changes can be made during negotiations?
Even if you do not have clear positions on every aspect of each contract, users need to know what scope they have to make amendments. Try and pre-empt any confusion by providing clear guidance on how to proceed if the playbook does not canvass an issue.
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When using the playbook, it is important to take time to ensure its relevance and usefulness. Legal positions and business strategies can change over time. Encourage your playbook owner to periodically:
revisit the playbook;
test it in new scenarios; and
feed learnings back into the document.
Importantly, whoever ‘owns’ the process of developing the playbook should closely integrate with those who are using the playbook. The playbook owner can then take the lead in ensuring the content of the playbook mirrors the reality of legal negotiations.
By updating your precedents as needed, you can create a ‘living’ playbook which adapts over time to meet the needs of your in-house team.
When done right, contract playbooks can transform the way your in-house team supports contracts across your business. To get started:
design your playbook while doing legal work;
keep in mind who will be using the playbook;
create a minimum viable product;
nominate someone to ‘own’ the development of the playbook; and
ensure there’s guidance on what to do if the playbook is silent on an issue.