What is a contract playbook and how do you create one? Find out how to build a contract playbook for your business in this deep-dive.
With in-house legal teams continuing to find themselves buried in low-value work, contract playbooks are becoming increasingly important. When created effectively, a detailed contract playbook is one of the most effective ways to enable teams to self-serve on contracts, as commercial teams can consult with the playbook instead of involving legal teams. With Juro, legal teams can automate their contract playbook and return to higher value and higher risk work.
But what actually is a contract playbook and how can you create one that works for your business?
Discover everything you need to know about contract playbooks in this Juro explainer. If you’re ready to automate your contract playbook, get Juro. If not, continue reading or use the menu below to navigate this resource.
What is a contract playbook? 📗
A contract playbook is a compilation of different information targeted at streamlining, standardizing and codifying the process for managing contracts. A contract playbook contains a wealth of information and knowledge about the collaboration, negotiation, review and approval stages of contracts. This information is commonly used to empower individuals to handle key parts of the contract process themselves, without needing to rely on a lawyer.
Contract playbooks can come in various forms. However, most will be stored in excel sheets or as notes in other platforms like Google Docs, Notion and Airtable. For the best results and higher levels of compliance with the playbook, some rules are even automated within the contract process using a contract management software, like Juro, which provides legal with total peace of mind.
What is the purpose of a contract playbook? 🎯
But why exactly do contract playbooks exist? Well, contract playbooks serve a number of different purposes, including that they:
Empower business teams to self-serve. Contract playbooks deliver enough information that business teams can work on contracts without the need to request constant input from the legal department, as all of the information is already provided.
Clarify the contract negotiation process. Contract playbooks, or contract negotiation playbooks, are designed to add clarity to and explain the important processes and rules to follow when negotiating, reviewing and agreeing contracts.
Speed up the negotiation process. A contract playbook is designed to reduce delays and friction in the contract negotiation stage since it prevents different teams from needing to wait around for responses from one another. Instead, they can follow the protocols laid out immediately.
Help to deliver more efficient training. Contract playbooks are an effective way of educating new lawyers and individuals from other departments about the contract lifecycle, as the rules are clearly written and confirmed in one single source of truth.
Create a more structured workflow. With a contract playbook in operation, individuals can quickly and easily find out who is responsible for certain stages in the contract workflow, and when this changes.
“Juro completely lifted the burden off our legal team by empowering our Sales team to handle the majority of small business contracts from start to finish.”
What is included in a contract playbook? ✍️
A contract playbook is also often referred to as a contract negotiation playbook, since it typically comprises large quantities of information that guides business and legal teams to self-serve on contract negotiation and review. For example, a contract playbook will usually cover the following information:
Fall-back positions. A contract playbook will often outline which alternative course of action to take during a negotiation where your original plan or proposition has failed.
Negotiation strategies. Contract playbooks will often also cover best practices when negotiating, as well as which provisions are most typically negotiated and how to approach these friction points during a negotiation.
Recommended contract wording. For business teams self-serving on contracts, legal language won’t be second nature. There will be lots of contract terminology that needs explaining. Including example clauses and guidance in your contract playbook is also common practice.
Escalation points. Details surrounding how and when you should escalate a contract related issue will also commonly be outlined in your contract playbook, as well as information about who an issue should be escalated to.
Rationale statements. Contract playbooks often have a collection of rationale statements to support proposed clauses and amendments, and these can be accessed to provide to the counterparty during negotiations.
Approval processes. Although business teams are often empowered to self-serve on routine contracts, contracts will usually still receive a quick check from legal. The contract playbook will typically outline specific sequences to be followed for approvals. These can be used to inform approval workflows.
Explanation of legal concepts. Most commercial teams will be unfamiliar with complex legal language and principles, so it is often useful to include a simple explanation of legal concepts in your playbook.
Instructions for amendments. A contract playbook will sometimes also outline when and how to amend language within a contract, as well as how to respond if the counterparty chooses to propose new language in the place of yours.
Valuable contract data. Many contract playbooks will delve into the contract data contained in earlier agreements to describe how frequently certain decisions are made and when.
Who uses a contract negotiation playbook? 👔
Typically, the legal team will be responsible for creating a contract playbook, and it is usually driven and informed by the key legal practitioners in an organization who are experienced in dealing with different contract types and scenarios.
However, a contract playbook can be used by anybody that is involved in the contract workflow at any stage, whether they are part of legal, the HR function or the sales team.
For instance, in businesses where legal teams have enabled commercial departments to self-serve on routine contracts, these commercial teams will also be expected to refer to the contract playbook for useful information and guidance during negotiations. This is because it prevents the need to involve legal on repetitive tasks, and empowers legal teams to return to high value work whilst business teams self-serve.
Ultimately, anyone that is expected to self-serve on contracts will benefit from having a contract playbook to hand.
Check out these case studies with real-life GCs discussing their approach to the contract process, and how they empower their commercial teams to self-serve:
What are the benefits of using a contract playbook? 🌟
1. Minimized risk 📉
Having a robust contract playbook in place is an effective way to minimize the risks associated with contract negotiation, particularly where the contract is being managed by a team outside legal.
Since the playbook will be full of detailed advice and structured guidance, individuals are more familiar with best practices when negotiating a contract. This then reduces the risk of individuals making poor decisions, damaging your relationship with the counterparty and making costly mistakes.
2. Prevent delays in negotiations 💬
Contract playbooks are on hand at any time, unlike busy legal teams with hefty workloads. This means that, so long as the information is detailed enough, those managing contracts can progress through the negotiation stage without the need for back and forth with legal. For many experts, this is a key principle of legal hygiene.
Without this in place, delays can quickly stack up and create a bottleneck in the negotiation process. This can cause contracts to have a longer turnaround time, or even create friction that leaves the other party wondering whether they want to sign at all.
3. Legal can return to high value work 💰
According to our recent Tech GC report, 69% of in-house counsel feel buried in low-value work. By implementing a successful contract playbook, this doesn’t have to be the case.
A contract playbook that delegates this work responsibly and with enough support will allow low-value work to be passed back to the departments responsible for the deals, like sales and procurement. This means that in-house lawyers can get on with the work that requires their skills and insight most, rather than getting bogged down in the administrative tasks associated with routine contracts.
4. Legal retains control 🎛️
Most comprehensive contract negotiation playbooks will also lay out an approval workflow. This means that it will outline which contracts need to be passed to more senior members of the team, when and in which order.
This is something that a contract playbook can outline clearly and create a hierarchy for, or you can incorporate your outlined approval workflow into a contract management system that automates the workflow and sets up an approval sequence for different contracts.
5. Creates a united front in negotiations 🙏
One of the biggest dilemmas in a negotiation that involves different departments, like sales, finance and legal, is that they all want slightly different things, and have slightly different goals. This can create a divisive approach to contract negotiation, and make achieving one common goal more challenging.
However, with a contract playbook in place, there are set expectations within a negotiation, and this means that all of the teams are on the same page. This creates a stronger, united front during the negotiation stage, and can often lead to better results.
How to create a contract playbook 🔧
Now that we’ve discussed the various benefits of having a contract playbook, you’re probably wondering how you can get one in place – if you haven’t already!
Here is our advice on how to create a contract playbook that works:
1. Choose a format for your playbook 🖥️
Foremost, decide how you want to create your playbook, and how you want it to be accessed. Traditionally, this information would be kept on paper and stored in filing cabinets within an office.
However, digitized playbooks are the norm today, much like digital contracts. Having a digitized playbook will provide a dynamic, easy and fast way to access important information.
The biggest benefit of digitizing your contract playbook by automating it using a contract tool like Juro is that you can centralize information and remove the discretion associated with using it.
Unlike a contract playbook stored in Notion or Google Docs, an automated playbook will lock down clause variations using conditional logic. This prevents business teams from neglecting the playbook rules, as all of the fallbacks and rules are applied consistently and automatically.
2. Pull the relevant information together 📌
Before deciding how you’re going to compile your contract playbook, it’s important to create a bank of information that you intend to include. Essentially, this should include any information that you’d previously provide in a different format to those managing contracts, and it provides the foundation for the playbook, which you can then try to fill the gaps in afterwards.
This information can usually be sourced from:
- Interviews with the most experienced lawyers in the organization
- Separate guides that were previously being used
- Contract templates
- Old training materials (if they’re still relevant)
- Previous contracts from a mixture of use cases
3. Address all stakeholders appropriately 📢
When building your contract playbook, consider who your users will be. In many cases, various business teams will rely on a contract playbook to provide them with guidance. Therefore, it’s important to ensure that you provide information to help them with their specific requests.
Not only that, but the team responsible for drafting the playbook also needs to account for the fact that commercial teams may have much more limited legal knowledge than legal teams, and will therefore need concepts to be explained fully and in a more simplistic way.
If you want your contract playbook to properly empower users to self-serve on contracts, you need to design it in a way that they find accessible and can understand.
4. Provide sufficient detail 📝
When drafting a contract playbook, you should also give as much detail as possible about different instances, rules and workflows. This will enable you to minimize risk as much as possible, since it will eliminate any ambiguity and room to make costly mistakes.
One of the most successful approaches is to include examples, templates and detailed explanations to your playbook, since this helps to ensure that the teams self-serving on contracts not only know what to do, but that they also understand why they are doing it for the future.
5. Keep design in mind 🎨
Since a contract playbook will typically be jam-packed with important information, it can quickly become heavy and overwhelming for readers, causing them to struggle to process the most important points or worse, refrain from using it at all.
That’s why it’s important to design the playbook to portray the most important information clearly first, and that you supplement the document with visual aids, flow-charts and other structural cues that make it more digestible.
6. Set up a successful training process 👩🏫
Once you have pulled a robust contract playbook together, you need to equip your legal team and those they enable to use it. This often means providing effective training sessions to ensure that the users understand the content in the playbook but also how to apply this knowledge in practice. This training should be updated regularly as the playbook itself adapts and evolves.
7. Leverage technology where you can ⚙️
One of the most effective ways to implement a contract playbook is by automating the processes outlined within it. Read on to find out how.
Using contract automation software to implement your contract playbook 🤖
There are lots of ways to leverage contract automation software for better compliance with your contract playbook. This includes by:
1. Setting up conditional logic
Advanced contract tools that allow you to set up conditional logic enable legal teams to set up hidden logic that allows users to soften clauses for deals above certain values and set fallbacks in legal agreements depending on the counterparty’s responses.
2. Using pre-defined templates
If your contract management software supports a variety of different templates, this can make it far easier to write contracts. This is because most of the phrasing, language and clauses listed in the playbook will already be laid out within a template, ready for teams to self-serve on.
3. Creating approval workflows
Rather than just listing a sequence of approvers that need to review and approve certain types of contracts within your playbook, contract automation software allows users to set up this approval workflow sequence directly in the software.
Contract tools like Juro will follow the sequences outlined within the playbook and send contracts to the appropriate addresses for approval as soon as it’s required. With Juro, users can also decide which order they want the approvers to review and approve the contract in, meaning that the approval workflow can be automated regardless of how detailed the process is.
Ready to automate your contract playbook? 👇