In the world of contracts, efficiency, consistency, and accuracy are critically important. Legal teams navigate a complex landscape of agreements. This can be a long and tedious process as redlines are made, revisions are negotiated and adopted, and company positions are included.
Meanwhile, business imperatives and tight timelines require these contracts to be turned around quickly. But hastily reviewing contracts can mean the reviewer may miss important risks buried deep within the contract and expose the business to liability. Furthermore, as business partners and other legal team members become increasingly involved in reviewing contracts, constantly training and enabling them to effectively take part in the process can be a huge drain on time and resources.
This is why many legal teams have built playbooks for themselves and their business partners to create consistent contract reviews. But what are playbooks, and why are they used in contract review? In this blog post, we'll delve into the fundamentals of playbooks and explore why legal teams may choose to use them.
Playbooks are predefined guidelines, rules, and templates that outline the step-by-step process for reviewing and managing contracts within legal and business teams. They ensure consistent and efficient contract handling by creating structured workflows, standardized language, and best practices tailored to specific contract types and scenarios. They act as roadmaps for reviewers, providing step-by-step instructions on navigating various aspects of business requirements, compliance obligations, data protection, and more.
Traditionally, legal teams store playbooks on Excel spreadsheets and Word documents. Some legal teams have started digitizing and automating their playbooks within their contract review platforms.
A truly effective playbook fully leverages automation and technology. By integrating your playbook with a contract review platform that offers features like natural language processing (NLP), AI, and machine learning, your legal team can automatically identify key terms, clauses, and potential risks within contracts, streamlining the contract review process. Some platforms, like LegalOn, also offer off-the-shelf playbooks that allow legal professionals to start reviewing contracts consistently on day one.
#1 Efficiency: Playbooks streamline the contract review process by offering a repository of pre-approved positions and clauses. Reviewers can review their contracts against their playbooks, providing clarity and focus on the most critical aspects of a contract. Playbooks can also enable training and onboarding of new team members so less experienced reviewers can become proficient more quickly.
#2 Consistency and Compliance: Maintaining consistency in contract language and ensuring compliance with industry regulations and internal policies can be challenging. By centralizing and cascading your company’s preferred positions, playbooks ensure that contracts adhere to standardized language and best practices. This minimizes the risk of errors, inconsistencies, and regulatory breaches.
#3 Strategic Alignment: Beyond standardization, playbooks guide negotiation strategies and risk mitigation techniques. They empower legal teams to negotiate from positions of strength, aligning contracts with the organization's strategic goals and minimizing potential risks. This strategic focus enhances the overall value that legal teams bring to their organizations.
Playbooks offer a structured and efficient contract creation, review, and negotiation approach. They empower legal teams to work smarter, faster, and with greater precision, ultimately driving success and mitigating risks for their organizations. But how do you create a playbook, and what are some questions to consider when building one?
We came up with a checklist of 11 key questions to ask when building a playbook for your organization:
1. Contract Type and Purpose: What specific type of contract is the playbook intended for? What is the primary purpose of this contract (e.g., vendor agreement, customer contract, partnership agreement)?
2. Key Clauses and Terms: Which clauses and terms are essential for this contract type? Are there any industry-specific clauses or legal requirements to be included?
3. Regulatory Compliance: Are there any legal regulations or industry standards that must be adhered to? How can the playbook incorporate compliance requirements into the review process?
4. Data Protection and Confidentiality: How will sensitive information and data be handled in accordance with privacy regulations? Are there specific clauses related to data protection that should be included?
5. Risk Assessment: What are the potential legal risks associated with this contract type? What risks is your business unwilling to take on versus what risks is your business willing to negotiate and share with your counterparty? How can the playbook include preferred and fallback positions that identify and mitigate these risks?
6. Language and Terminology: Are there standardized language and terminology preferences for this contract type? How can the playbook ensure consistency in language throughout the document?
7. Workflow Steps: What are the key steps involved in reviewing and negotiating this type of contract? At what point in the negotiation should you push back to achieve your preferred position, and at what point should you accept your fallback position?
8. Approval Process: Who needs to review and approve the contract at various stages? How can the playbook facilitate efficient approval workflows?
9. Collaboration and Communication: How will the playbook encourage effective communication between legal and business teams?
10. Training and Onboarding: How can the playbook help new team members understand the contract review process?
11. Integration with Tools: How can the playbook integrate with contract review software?
As these questions demonstrate, building playbooks requires significant effort and investment. Although they provide incredible value once deployed, legal teams can access off-the-shelf playbooks on contract review platforms like LegalOn. Legal teams can review our review settings and alerts and pick the most important to their business. They can assign importance levels and watch them get deployed immediately. Legal teams can also create their own custom alerts on LegalOn, tailoring the platform to best suit their needs.
LegalOn’s playbook functionality is directly integrated into our contract review platform, allowing your legal team and business partners to immediately access and apply playbook positions while reviewing contracts. No more toggling between applications or contracts and spreadsheets – that’s the old way of doing things.
Curious to know more? Request a meeting with a member of our team to guide you through our Playbooks and contract review functionality.
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