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Contracting_Playbook.pngIs your contracting playbook an information manual or a dynamic tool that can evaluate negotiation options? This article shows how interactive intelligence can boost the power of your playbook, helping you achieve better negotiated solutions – and more collaborative contracts.

Playbooks are widely used by contract professionals today - they provide a rich source of knowledge and guidance on contract negotiation and drafting. But even when digitally delivered, most playbooks are not interactive or “smart.” Powerful new technologies can change that - and turn your playbook into a tool that can help parties reach a “best possible” collaborative agreement.

Used together, document assembly and decision support software can coordinate the parties’ preferences to find optimal solutions. By using these technologies, you can take the power of your playbook to a whole new level – and revolutionize your negotiation and contract management processes.

This article explains how to do that and put your playbook to work. What follows also reflects and expands upon the IACCM Ask the Expert webinar I presented in July 2015: Enhancing Contract Playbooks with Interactive Intelligence.1

Each party gets some of what it most wants

A playbook is your gameplan. It will typically contain all types of information, relating to contract negotiation: sample and preferred versions of common provisions, acceptable fall-backs, explanations, checklists, tips, guidance, approvals needed for exceptions, strategies for upcoming projects and much more. Organizations entering into a lot of contracts typically deliver their playbooks digitally via a network or intranet. Whatever form they take, playbook benefits are considerable:

With rules and preferences clarified in advance, you are more likely to end up with contracts that optimize business value. By standardizing terms and circumstances under which variations will be tolerated, organizations can better comply with applicable laws and policies, achieve consistency, and manage risk. Playbooks serve as vehicles for training staff and improving their effectiveness. 

Document Automation … smart and fast

Going one step further, some organizations have already enhanced their playbook systems with document assembly technology, and they’re discovering major benefits:

  • Perfectly formatted and substantively complete contracts can be generated almost instantaneously once terms have been entered.

  • Standardized and pre-approved language can be used for most circumstances, reducing risk and improving compliance.

  • Users don’t have to manually enter contract terms or extract them with post-production processes in order to populate databases; that can happen automatically. Rich metadata can be embedded within the contract itself for downstream management and analysis.

  • Systems can notice when a user has omitted something important or included something that is ill-advised.

Document assembly software has long been used in law offices to generate highly tailored and precisely-styled documents. It enables users to program “what words go where,” and guides them through sets of answers to interactive questions that change as users work through them.

Automated templates have a number of big advantages. They can allow managers to express alternative wordings, and users can get the wording they want by answering questions rather than wrestling with variations in a word processor or text editor.

The document assembly industry is mature with established vendors.2 Many contract lifecycle management solution vendors offer at least rudimentary features. If implemented as intelligent templates in one of these products, playbooks can:

  • let users automatically assemble materials based on specifications they enter, rather than having to read and follow instructions, and copy and paste verbiage;

  • offer interactive features like questionnaires that gather data and decisions to populate variable fields and resolve alternatives;

  • enable users to work inside of drafts that contain annotations, which can be deleted when a draft is to be reviewed by an outside party or is ready for execution;

  • adjust language and other recommendations for the particular customer or partner involved; and

  • easily vary questions, annotations, results, and other aspects of the user experience based on the user’s role and authority. (For instance, certain users might only receive non-editable PDFs rather than editable documents).

But there are some drawbacks …

Extended negotiations and multiple drafts can prove problematic in conventional document assembly systems, however, particularly when parties are trying to negotiate a “best possible” collaborative solution that generates multiple drafts with small but important changes.

  • Some products may support basic automated “re-assembly” of a document against updated or custom edited drafts, but none do that very satisfactorily as yet.

  • Playbook information can be integrated with document management systems and databases in most products, but any changes in policies and procedures generally have to be hand-coded in the document automation environment.

To help solve this dilemma, I am developing a next generation “choicebox” technology that will bring a new dimension to existing document automation (or assembly) systems, greatly enhancing their effectiveness. This “choicebox” system is not yet commercially available.

Choicebox enhanced playbooks support collaboration and deliberation

 Working alongside a document assembly system, choicebox technology provides a very visual interactive negotiation support system. It enables participants to decide and express simply what they want to agree to, independent of the sequence and structure of words. Such a system enables them to see instantly the impact their preferred options would have on the draft contract, so they can easily adjust and manage any clashes of values or evaluative perspectives as they arise.

Here’s a quick example:

Suppose that Newco and Ventura are negotiating a preferred stock agreement and it has come down to differences over a material adverse change clause and a closing condition. Members of the negotiating teams have different perspectives because they assign different weights to the goals of, for example (a) preserving good will and future dealings with the counterparty (b) avoiding risk and (c) minimizing the chance of protracted litigation.

Using choiceboxes allows the parties to balance their “ideals” and “least attractive” options, to develop a compromised version that gives each party some of what they most want. As a tool for contract drafting and negotiation, a choicebox-enhanced playbook would:

  • focus on the things people care enough about to argue over, or fight for;

  • help people more reliably judge the relative “preferability” of proposed contract drafts, giving a tidy overview of issues, settled and outstanding;

  • promote clarity about the difference between how much better a draft is on a particular point versus how much one cares about that kind of “betterness;”

  • supply a framework within which the known or inferred preferences of counterparties can be tracked;

  • provide a record from which participants can readily retrieve reasons for having taken or accepted certain positions;

  • more fully express company standards and policies by capturing not only preferred language but also the relative “preferability” of particular variants and the relative importance of types of terms and conditions.

So, what’s the bottom line?

Almost every organization has an implicit playbook. There’s generally at least a collection of prior contracts to compare against proposed new ones. If you haven’t yet formalized your playbook, take advantage of the experience of fellow organizations that have done so. Lots of examples and other materials are available online. Or, if you already make good use of playbooks, consider whether the forms of automation outlined above could make your operations even more effective. In either case the “return on effort” should be considerable. Use playbooks, and make them work for you!

More about choicebox technology: To find out how choiceboxes work at a deeper, technical level in relation to the example above, click here. 

END NOTES

  1. The Ask The Expert webinar Enhancing Contract Playbooks with Interactive Intelligence broadcast 10 July 2015, is available at this link (IACCM members only). For a longer paper on these topics, please feel free to contact the author at the email address below.

  2. Established vendors include ContractExpress, Exari, HotDocs, Leafleaf, Rapidocs and XpressDox.

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ABOUT THE AUTHOR

Marc Lauritsen, author of The Lawyer’s Guide to Working Smarter with Knowledge Tools, is president of Capstone Practice Systems and of Legal Systematics. Marc has worked as a lawyer, directed the clinical program at Harvard Law School, and done path-breaking work on document drafting and decision support systems. He’s a fellow of the College of Law Practice Management and past co-chair of the American Bar Association’s eLawyering Task Force. Marc can be reached at marc@capstonepractice.com or @marclauritsen on Twitter.

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Marc Lauritsen - President, Capstone Practice Systems and Legal Systematics

President, Capstone Practice Systems and Legal Systematics

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