Contracts are the foundation of any business, even though they are often neglected or dismissed as an afterthought. They enable business transactions by allowing parties to enter into an agreement to exchange products and services, making contract documents an essential part of your company's business principles.
In fact, a company's history and a complete overview of its business standards are anchored in the company's contract database, waiting to be deciphered.
How to exploit the wealth of knowledge hidden in these mountains of files? Is there a way to incorporate the data into a usable plan to help employees in all departments do their jobs better and more efficiently? Yes, there is! This approach is called a contract playbook.
What is a contract playbook?
Contract playbooks are essentially internal guidelines and predetermined compliance criteria used by internal legal teams to crystallize ideas that have accumulated over many years of negotiations. Playbooks often deal with provisions that are not required but would be desirable ("nice to haves"), clauses that are acceptable with appropriate modifications ("may-haves"), and clauses whose absence/presence constitutes a breach of contract and is unacceptable ("must-haves").
A well-developed playbook helps sales, legal and other departments stay on the same page during contract negotiations. It also allows for a faster transaction, as all parties can rely on the playbook instead of waiting for an answer from someone else. In addition, playbooks are also an excellent resource for onboarding new team members.
Why you should create a contract playbook?
A contract playbook has numerous benefits, including the following:
Playbooks promote the use of a uniform, ideal language
If the playbook team has done its job right, the terms in the playbook represent the best position for the organization to be in. If the rulebook is followed, this position will be consistent throughout the organization. The risks of divergent terminology or regulations are largely avoided. The organization can be confident that its contracts work in its favor, both economically and legally.
A good playbook saves you time and resources
With contract responsibilities more evenly distributed across departments thanks to your contract playbook, the legal team can devote more attention to more critical matters. Less time spent on small activities helps staff focus their efforts and work toward higher-level goals, such as. B. Continuing to improve the contract management process to increase efficiency. Not to mention the reduction in resources spent on hiring outside counsel and training new employees. Your internal team should be able to take on additional tasks normally handled by outside counsel, and new hires can lean on the contract planning book as they learn to negotiate your company's most important contract cycle.
Playbooks make sure everyone is on the same page
Separate contract reviews by commercial, finance and legal departments can pit these departments against each other. Creating a contract playbook brings these groups together to develop language that achieves their goals while accommodating their risk perceptions. The terms in the playbook reflect both the competence of the legal team and the experience of the managing director. The rationale behind the final wording and the overall meaning of a particular provision are recorded in the playbook and become part of the training course. This will reduce internal renegotiations and second-guessing of contract language.
Playbooks make contract review easier
It is time-consuming to check previous contracts for inconsistencies or questionable wording. While there is no way to avoid a legal review of contracts and licenses that have been signed, the fewer changes made to previous contracts, the better. Use of the Guide over time results in contracts with consistent wording for all contract types, facilitating legal review and reducing concerns about uniquely created terms and conditions.
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