Creating a new risk playbook from scratch is not just an arduous process – it’s no longer needed.
Contracting professionals often talk about their risk playbook, which is essentially a checklist of the contracting policies that control how your contract review and negotiation work.
On the surface, there are many good reasons to have one. Compared to informal contracting policies, a risk playbook improves organizational efficiency, transparency, and consistency. It also promotes objectivity and accountability within your company.
With these benefits in mind, creating risk playbooks may seem like a necessary task. However, legal technology is already making it redundant.
One thing is clear: we do need a consistent application of rules
Law is a rules-based system. For General Counsels, applying rules consistently is a daily challenge.
Since lawyers are in the business of producing favorable and reliable outcomes, the importance of consistency is obvious. But without rules written down, you would have to rely on memory to remember and apply each rule as necessary.
That in itself is a flawed and unworkable approach. It’s only natural that lawyers will remember some rules, but fail to recall others. And the rules they can remember at this moment could change at any time, simply because they’re human.
Does that mean I should create a playbook from scratch?
To avoid these problems, many organizations choose to create their risk playbook from the ground up. In theory, it sounds ideal: you capture all your contracting do’s and don’ts in one comprehensive document that everyone can use to drive negotiations.
In practice, it’s much less simple. Not only is creating a playbook a long and laborious process, but it also distracts you from the day-to-day tasks that inevitably pile up on your desk. But, most importantly, it quickly becomes out of date unless it is constantly curated. We see this a lot.
What’s unique and important in your contracts?
Thankfully, there’s no need for you to create your risk playbook from scratch.
The truth is, the vast majority of contracts largely say the same thing. If you scrutinize a sample number of contracts, approximately 90% of the content will cover common ground. For example, two companies may have almost identical supplier agreements, with differences in two areas:
- The legalese may vary depending on the individual drafting the contract, even if the meaning behind the words is, in essence, the same.
- The remaining 10% is unique, and is often the important stuff.
The first area of difference is negated with automated contract review technology that focuses on the meaning behind the language, rather than the choice of language itself (which is fundamentally irrelevant).
The second point raises the question: why read the entire contract when the huge majority of it will be saying nothing out of the ordinary, and it’s this 10% that you care about?
Focus on what matters – with ThoughtRiver
ThoughtRiver has you covered for that 90% straight out of the box, so you don’t need to spend valuable hours manually reviewing the entire contract, just focus on the material issues.
ThoughtRiver comes with thousands of questions to ask of your contracts on day one. It works out of the box, using best-practice contracting principles to identify anything that is out of the norm and inconsistent with your usual approach.
You can then build on our capabilities to add the bespoke contracting policies that are unique to your business. This allows you to close that 10% gap we mentioned earlier with the least effort.
In this way, you can ensure you apply rules consistently and all contracts are covered for risk – all without having to build your playbook or checklist from scratch.
