Creating a contract playbook: Free checklist

Creating a contract playbook checklist

Creating a contract playbook can transform how your company handles contracts, improving consistency, reducing risk, and speeding up negotiations. This checklist guides you through the essential steps to build and implement a comprehensive contract playbook tailored to your business needs.

By following this contract playbook checklist, you’ll ensure that your company has a clear, standardized approach to managing contracts, empowering your legal and business teams with the tools and guidance they need to negotiate effectively.

How to use this creating a contract playbook

Here’s how to make the most of your contract playbook checklist:

• Follow the structure: This checklist takes you through each phase of building a playbook, from initial strategy to rollout and maintenance. Use it as a roadmap to ensure you cover all the important aspects of your contract process.
• Customize for your business: Adapt the checklist to fit your company’s specific contracting needs, industry, and risk profile. Every business is unique, and your playbook should reflect your operational goals and risk tolerance.
• Involve key stakeholders: Use the checklist as a collaborative tool. Engage with legal teams, business units, and executives to gather insights and ensure the playbook reflects the needs of all departments.
• Track progress: Mark off tasks as you complete them to stay organized and ensure nothing is missed. A well-structured playbook requires thorough planning and attention to detail.
• Keep it updated: Contracts evolve, and so should your playbook. Use this checklist to periodically review and update the playbook based on changes in law, business needs, and feedback.

Checklist

Establish justification for the playbook

[ ] Understand and clearly communicate the reasons for creating a contract playbook.

[ ] Gain support from key stakeholders across the company, including:

[ ] Senior management (having an executive sponsor is ideal).

[ ] Attorneys within the law department, if you have one.

[ ] Paralegals, contract administrators, negotiators, and other legal professionals.

[ ] Third-party legal outsourcing organizations, if applicable.

[ ] Internal business teams that frequently work with contracts.

[ ] Individuals authorized to sign contracts.

Communicate the benefits of a playbook

[ ] Highlight the following benefits of a contract playbook to the relevant stakeholders:

[ ] Helps manage risk, identify opportunities, and ensure accountability in the contracting process.

[ ] Streamlines and standardizes the contracting process, reducing negotiation time and legal costs.

[ ] Ensures compliance with legal and regulatory requirements while managing company obligations.

[ ] Strengthens negotiation positions with counterparties.

[ ] Enhances the company’s reputation for efficient and high-quality contracting.

[ ] Identifies gaps or inconsistencies in contract templates.

[ ] Pinpoints areas for improvement in the contracting process.

[ ] Assists in training legal teams, business units, outside counsel, and third parties on company contract standards.

[ ] Guides less-experienced negotiators to follow best practices and ensures experienced negotiators remain aligned with company standards.

Co-ordinate internal resources and key stakeholders

[ ] Evaluate existing business functions, tools, and processes related to contract creation, analysis, or negotiation, including:

[ ] Previous efforts to create playbooks.

[ ] Contract templates, standard clauses, past negotiated contracts, and any history of failed or abandoned negotiations that highlight recurring issues.

[ ] Company policies on contracting, approval processes, signature requirements, and current contract management systems.

[ ] Software tools that automate or support contract drafting.

[ ] Useful clauses from internal and external attorneys’ personal clause banks.

[ ] Negotiation training materials or internal guidance memos.

[ ] Engage key stakeholders early in the process by:

[ ] Reviewing existing contract templates and understanding the reasoning behind standard clauses and negotiating positions.

[ ] Assessing the company’s risk tolerance and identifying unique requirements or exceptions.

[ ] Gathering feedback on current challenges with contracts, negotiations, and the overall contracting process.

[ ] Identifying the most frequently negotiated and contentious contracts and clauses.

[ ] Building a sense of ownership in the playbook and contracting process among stakeholders.

[ ] Identify necessary resources and develop or acquire the tools required for the playbook.

[ ] Assign a playbook coordinator responsible for:

[ ] Leading the product.

[ ] Organizing and curating data collected.

[ ] Ensuring consistency in the playbook’s content and format.

Design the playbook

[ ] Define the overall strategy and structure of the playbook.

[ ] Tailor the playbook to the company’s business, industry, and sector, making it user-friendly for its intended audience.

[ ] Separate business issues from legal ones and highlight any key concerns specific to the company.

[ ] Identify which contracts or clauses need business input and which require legal intervention.

[ ] Consider common challenges, such as claims, disputes, litigation, or regulatory matters.

[ ] Determine which contracts do not need legal review because they are:

[ ] Low risk.

[ ] Subject to other internal review processes.

[ ] Created using standard, unmodified templates.

[ ] Maintain a list of contracts that are not covered by the playbook, including reasons for their exclusion.

[ ] Consider developing separate playbooks for different contract types.

[ ] Review the most common requests for contract creation or review to focus efforts.

[ ] Test the playbook with a short contract template and a small group of stakeholders.

Develop the format

[ ] Automate steps where possible and account for any technological limitations.

[ ] Determine which stakeholders will access the playbook and where it will be hosted.

[ ] Integrate the playbook into existing contract management platforms or automated systems.

[ ] Make the playbook easy to navigate with internal and external links to relevant documents.

[ ] Ensure the playbook has a consistent design that aligns with the company’s standards.

[ ] Include a mix of sample language, checklists, process guides, escalation matrices, and training materials.

[ ] Use consistent language and tone throughout, while being mindful of context-sensitive terms.

[ ] Provide clear, straightforward instructions on when and how to use each alternative clause and how to handle negotiations.

[ ] Assign a point of contact, such as a playbook coordinator or a dedicated email, for questions about using the playbook.

Consider creating different versions of the playbook

[ ] Create tailored versions of the playbook for:

[ ] The legal department with alternative drafting options and decision matrices for internal use.

[ ] Business teams with more prescriptive guidelines, outlining strict rules on which clauses to use.

[ ] Develop specific sections for different teams or geographies, such as sales versus procurement.

[ ] Ensure all versions follow a unified approach with consistent terminology.

Include general rules

[ ] Encourage stakeholders to involve in-house counsel early in the contracting process.

[ ] Highlight common contract pitfalls and those specific to the type of contract being negotiated.

[ ] Ensure key concerns from other departments are addressed, including finance, risk management, compliance, data security, privacy and tax.

[ ] Provide links to the company’s general contracting rules and relevant policies, such as:

[ ] Contract Review and Approval Policy.

[ ] Electronic Signature Policy.

[ ] Record Retention Policy.

Outline the contracting process

[ ] Indicate which contract templates and clauses should be used, and in what situations.

[ ] Clearly define:

[ ] Mandatory and discretionary provisions.

[ ] When alternative language may be used and the specific alternatives.

[ ] Required approvals for completing contracts.

[ ] Address any legal, business, or regulatory considerations for contract templates.

[ ] List recurring issues and positions.

[ ] Integrate any approval or escalation requirements to meet internal policies and regulatory obligations.

[ ] Assign business teams responsibility for reviewing and confirming the accuracy of contract terms.

[ ] Store contracts in an electronic repository (e.g., shared drive, cloud solution).

Review each contract template

[ ] Divide contract templates among the playbook team for review and analysis.

[ ] Start with a simple, frequently used contract template, like a nondisclosure agreement.

[ ] Prioritize templates based on:

[ ] Contract type.

[ ] Volume of goods or services.

[ ] Negotiation intensity.

[ ] Contract value.

[ ] Counterparty or risk level.

[ ] Decide if the playbook will cover all provisions or focus on key clauses.

[ ] Interview template drafters and legal professionals experienced with particular contracts.

[ ] Engage business stakeholders to understand the company’s contracting history.

Refer to ancillary documentation

[ ] Review and update ancillary documents related to contract templates, including:

[ ] Standard language for each clause.

[ ] The purpose of each clause for negotiators.

[ ] Alternative language options.

[ ] Guidance on using alternative language.

[ ] Provide alternative language for heavily negotiated clauses like confidentiality, indemnity, limitation of liability, insurance, and governing law.

[ ] Ensure consistency across all contract templates for standard provisions.

[ ] Educate negotiators on when and how to use each clause.

[ ] Use a color-coding system to mark.

[ ] Alternative language that can be added during negotiations.

[ ] Provisions that may be removed during negotiations.

[ ] Communicate drafting and negotiation strategies.

Prepare for negotiation

[ ] Provide negotiation guidelines, including:

[ ] Internal reasons behind specific contract positions.

[ ] Arguments to support the company’s position in external negotiations.

[ ] Justifications for each contract provision.

[ ] Advise negotiators to anticipate pushback and multiple negotiation rounds.

[ ] Warn negotiators not to immediately offer fallback provisions when faced with resistance.

[ ] Provide an escalation matrix for seeking advice in case of negotiation impasses.

[ ] Consider a sign-off memo for contract signatories that explains counsel’s objections to certain legal provisions.

[ ] Conduct a final review to confirm all necessary provisions are included in the contract.

Roll out the playbook online

[ ] Publish the playbook on the legal department's and other relevant internal sites.

[ ] Remind all users that the playbook is confidential and must not be shared externally.

[ ] Ensure the playbook is:

[ ] Easily searchable for finding contracts, clauses, alternative language, and escalation procedures.

[ ] Accessible only to authorized personnel, with editing rights restricted based on roles.

[ ] Secure against data loss or unauthorized access, including from external parties who might have access to sensitive or restricted data.

Train using the playbook

[ ] Conduct short, engaging training sessions and record them for future use.

[ ] Make the sessions interactive with questions and polling to engage participants.

[ ] Tailor the training to address each department's specific needs and concerns.

[ ] Focus not just on contract details but on how to communicate the company’s position during negotiations.

[ ] Use real-time role-play scenarios with the business team to practice applying the playbook.

Maintain the playbook

[ ] Regularly review and update the playbook

[ ] Recently negotiated contracts, standard clauses, and necessary template changes.

[ ] Feedback from both internal teams and external parties.

[ ] Outcomes of contract disputes, litigation, and settlements.

[ ] Benchmarking results against industry best practices and evolving standards.

[ ] Monitor changes in the company’s risk profile

[ ] Set criteria for adding new templates or clauses, or revising templates to reflect changes in laws, compliance or business needs.

[ ] Learn from failed negotiations and address recurring issues that hinder successful contract completion.

[ ] Clearly communicate significant changes to the playbook to keep users informed.

[ ] Label each version of the playbook to ensure all users work with the most up-to-date version.

[ ] Consider sending regular newsletters or emails to discuss updates and improvements.

Analyze the playbook’s impact and usage

[ ] Gather feedback from key stakeholders on the playbook’s effectiveness.

[ ] Measure improvements

[ ] Faster contract turnaround times, broken down by contract type or value.

[ ] Quicker approvals or revenue recognition.

[ ] Conduct a risk-benefit analysis to assess if stronger negotiating positions lead to risk reduction.

[ ] Compare contract terms against actual performance to spot weaknesses or added operational costs tied to certain provisions.

[ ] Measure the efficiency gains and risk reduction resulting from the playbook’s use.

[ ] Use data on playbook usage and effectiveness to guide future updates.

Benefits of using a creating a contract playbook checklist

Here’s how this contract playbook checklist helps streamline your process:

• Consistent contract management: It helps your team follow a clear, unified approach to drafting and negotiating contracts, reducing errors and inconsistencies.
• Faster negotiations: By providing pre-approved language and solutions for common issues, you’ll speed up the negotiation process and close deals quicker.
• Reduced legal risk: With standardized clauses and fallback options, you can manage risks more effectively, making sure your contracts align with company policies and legal requirements.
• Improved training: It serves as a practical resource for both new and experienced team members, guiding them through complex contracts and helping them stay aligned with best practices.
• Clearer decision-making: The checklist helps ensure your contracts are well-structured, with clear escalation points and designated responsibilities, so nothing gets missed.

Frequently asked questions (FAQs)