Effective Techniques for Setting-Up Legal Playbooks
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Creating a digital legal playbook is a key benefit of Contract Lifecycle Management (CLM) technology, but setting it up can be a challenge. In this session you'll learn practical advice for documenting and implementing aspects of contract automation including templates, clauses, conditions, formatting and more. This session is for legal operations professionals who are documenting their requirements and for the technology professionals who are implementing CLM technology.
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Effective Techniques for Setting-Up Legal Playbooks
- 1. © 2018 Apttus Corporation #AccelerateMO NJ Potter Erin Long May 16, 2018 Effective Techniques for Setting Up Legal Playbooks
- 2. © 2018 Apttus Corporation Drive Continuous Improvement with the Apttus Intelligent Enterprise Contract Management Maturity Model™ Reports, alerts and configurable workflows drive correct actions. All contracts in one searchable, globally compliant repository. Full Automation Perfect Execution Control of Language Analysis for Action Accessibility and Compliance Draft with 100% approved playbooks and negotiate with full visibility to changes. End users enjoy contract self-service. Obligation management ensures all tasks and rights are handled by the correct staff. Conditional and optional obligations are triggered accurately. Integration across functions and systems enables data-driven insights, superior business strategies and continuous improvement of practices. INCREASINGROI MAXIMIZE VALUE WITH ARTIFICIAL INTELLIGENCE • Conversational interfaces enable contract actions via text, speech and app. • Apttus Intelligent Import™ scans and understands incoming contracts. • Predictive contracting reduces risks and cycle times.
- 3. © 2018 Apttus Corporation Erin Long ECM Business Consultant Manager
- 4. © 2018 Apttus Corporation Before Apttus: Bespoke Contract Negotiation Procurement Unclear role in the negotiation process Unsure of how to collaborate with legal Lack of advantage in negotiations Finance Lack single view of obligations Too hard to approve contract terms Inadequate controls cause revenue leakage Audit Control No central location to find contracts No consistency between contract structures, making audits and compliance checks difficult Legal Different document style and negotiation preferences for each attorney Attorneys not sure they were always working on the most valuable/ important contracts Legal Risk Lost $$$
- 5. © 2018 Apttus Corporation After Apttus: Harmonious Contract Management People Centralized management of mid-tier outside counsel Negotiations in line with preferred positions “Right resource, right touch” Tools • Clause library • Playbook • FX2 • Easy to access the latest & greatest Process Standardization of content and contract style Consistent process for assessing risks around agreements and identifying appropriate resources to handle the deal
- 6. © 2018 Apttus Corporation Harmonious Contract Management - People Aligning on a cross functional team that represents Legal, Technology and Operations has driven comprehensive processes and playbooks that address all aspects of the contract lifecycle. Our GCO Lead is responsible for managing the core projects and resources of the GCO. ECM TECHNICAL LEADECM OPERATIONS LEAD GLOBAL CONTRACTING OFFICE (GCO) BUSINESS LEAD ECM LEGAL BUSINESS LEAD ECM LEGAL PROGRAM MANAGER ECM OPERATIONS PROGRAM MANAGER
- 7. © 2018 Apttus Corporation Harmonious Contract Management – The GCO MISSION: Provide drafting & negotiation solutions* that enable deals to move at the speed of Nike’s Triple Double Metrics & Reporting Centralized Access (GCO Website) Template Library Clause Library Mid-Tier Resources, e.g. Axiom LPO GCO OPERATIONS (Strategy, Planning, Communications, Requirements Gathering, Design, Feedback, Update, Management) INTAKE, WORKFLOW, STORAGE * people, process, content & tools
- 8. © 2018 Apttus Corporation Harmonious Contract Management - Tools © 2018 Apttus Corporation
- 9. © 2018 Apttus Corporation Harmonious Contract Management - Tools © 2018 Apttus Corporation
- 10. © 2018 Apttus Corporation Harmonious Contract Management - Tools © 2018 Apttus Corporation
- 11. © 2018 Apttus Corporation Key Takeaways: Follow Best Practices to See Results • Best Practices • Focus on what matters • Standardize • Get attorneys collaborating • Results • Protect your company’s interests • Scalability • Change mindset from personal preferences to the negotiation position that matters to the company © 2018 Apttus Corporation
- 12. © 2018 Apttus Corporation #AccelerateMO Thank You for a Great Accelerate 2018!
Editor's Notes
- In our 10+ years of experience delivering contract management solutions to the world’s mid-sized organizations and the who’s who of the Global 1000, we’ve developed the five stages of contract management maturity. As customers move up the maturity model, return on investment increases. The stages are: Accessibility and Compliance. This is achieved with all contracts in a single global repository. Typically our customers begin with this step so they can search for and organize contracts, comply with global rules, and get confidence and excitement for further steps. Almost all of our customers do this. Analysis for Action. The next step is to put reporting and workflows in place. About ¾ of Apttus customers are doing this. The repository enables alerts for individual contracts and reports on sets of contracts, covering any aspect of the contract: key dates for renewals, cycle times, behavior of individual users, clause-level reporting, trends and much more. We also have workflows that route the information and actions correctly, and based on dynamic conditions. Control of Language. The third step in maturity, often implemented along with the second step, is automation of contract authoring. Self-service wizards can be set up to allow users to generate their own accurate contracts without creating any risk. And authoring and negotiation tools, built in Microsoft Word, let attorneys and legal ops professionals work with total access to approved language and full visibility to every change and every version. This saves time and improve negotiating outcomes. About ½ of companies have made it here—though even those companies that haven’t are happy with the value they are getting from the lower steps on this pyramid. Perfect Execution. In Stage 4, you turn the contract into instructions for the rest of the business with Obligation Management technology. What this does is take all the contracts terms and sends them to the right people for action. This includes options and conditional “triggered” events. In other words, your contracts go work for you automatically: It’s as if each contract is a piece of software that kicks off as soon as the contract is complete. This is true 21st-century business process, creating real leading-edge efficiency and risk reduction. About a third of Apttus customers have started down this path. Full Automation. Want to run a true digital business? That means all your systems are running together, in concert with each other. Apttus offers Contract Management on a common platform with Quote-to-Cash and Supplier Relationship Management applications, and we have experience connecting to CRM systems like Salesforce and Microsoft Dynamics, and have integrated our software to every major ERP including Oracle and SAP hundreds of times. Most Apttus customers have integrated Apttus Contract Management to at least one system, however this is the top of the pyramid because total end-to-end automation is the end-state vision. Companies with this vision are going to lead their industries because they will be simply more efficient, more responsive to customers, able to operate at lower cost, and less exposed to foreseeable risks. The contract is at the center of this transformation vision. Increasing ROI. As you add more capabilities and more process, you will capture ever more value from your contracts. Even the first step on its own offers positive ROI—moving up from there just increases your ROI further. And you can get even more value from every stage of contract maturity with artificial intelligence. Max Value with AI: Apttus deploys artificial intelligence across our customer journey. We offer conversational interfaces for users to request contracts, find contracts, approve contracts and more using text, chat, and apps—AI provides the logic to provide the correct response to your needs. We also offer Apttus Intelligent Import™, which scans and understands third-party and legacy contracts so you can understand every detail about even those contracts you don’t create in Apttus. This capability works for a single contract or for 1000s of legacy agreements. And we offer predictive contracting to help authoring and negotiation: Recommending the right language to reduce risk or speed up cycle times.
- Originally our approach was to provide bespoke CLM tools to each practice area and business team. This led to several issues in addition to the ones on the slide: Several duplicative templates for the same deal type to accommodate drafting preferences like margins or font size Huge administrative burden to maintain and update our content We had good visibility to contract volume but not to contract content because of our lack of organization or standardization We are in a high regulation environment now (less than others but more than we are used to) which means more formal relationships and more stakeholders at the table As our business moves faster than ever we are asked to process more agreements AND provide more information about each deal but we can’t just double our head count to accommodate
- Our solution was to take a step back and with partnership from Apttus identify opportunities to streamline and improve efficiencies. We created a cross-collaborative team called the Global Contracting Office focused on providing solutions around People, Processes and Tools. -The GCO has been key to enabling one of our mantra’s: Right Resource, Right Touch. That means bringing our contract authors into line with our risk tolerance so that folks aren’t spending time on contracts that we have identified as low risk and low value. - This includes central management of our mid-tier partners - The GCO has also helped us replace bespoke content with Nike’s preferred clauses - This transformation is helping us scale our ability to support clients without ballooning our team We do this by leveraging the best tools available to us – which we find in the Apttus solution. We are especially leveraging FX2, Clause Library, Playbooks to guarantee our contract authors maintain access to the latest and greatest!
- In addition to our full time team members a huge ‘people’ unlock has been brining on centrally managed mid-tier resources that contract authors at Nike can access only by using our tools - meaning if they want draft and negotiation support that doesn’t come out of their budget they have to engage with our tools
- Overview of the way that the GCO functions Developing a risk assessment scorecard for all deals has helped us easily identify opportunities for automation and standardization It has also stopped us from going after the stuff that is too bespoke or risky for reasons outside of content (ex: Financial or Reputational risk) Our methodology is to annually provide each practice area with a list of the agreements they have drafted in the last 12 months and ask them to identify their preferred drafting resource, volume, risk and opportunities for efficiencies. This gets used to pull together a contracting ‘map’ that allows our team to plan strategically where to
- Building a Playbook: Playbooks, or Clause Libraries, should be built out to reflect language or text reusable across multiple templates. While you can create a clause or every section of a document, it’s not recommended. Some common questions about when to create a clause templates: Do I need to make a clause to make text conditional? No, conditional segments are perfectly valid Is there any performance impact to using clauses? There is no inherent performance benefit or degradation because of using clauses. Having a large number of Smart Clauses (closer to 100+) in a document can negatively impact Control Panel performance in a generated document, but this is not a best practice Is there a way to ensure text in my template is tracked? Yes, This is the difference between an inline clause and a clause markup- clause markups are not accessible via the playbook and live solely in the template they are created in. All inline clauses line on their own.
- The original formatting of templates, known as Merge Format or Pre-FX2 format differs from FX2 drastically when it comes to clauses. Smart Clause functionality does not work with templates created in Merge Format. In FX2, clauses in a template can be marked as smart- creating a list of clause languages changes and modifications to any contract during the redlining phase when using XAC. Once your clause library is built out, you can utilize this same functionality to track changes to language in 3rd party paper. An easy drag and drop feature allows you to see choose what of their language maps to yours.
- Building out your clause library can be incredibly helpful as a reporting tool. Utilizing Salesforce reporting and smart clauses, the business will be able to have both high level overview of which clauses are being modified most often, and/or modifications to high risk language in any given document. For example, changes to clauses to such as ‘indemnification’ or ‘limitation of liability’ would be high risk, and you would want to be able to easily determine from an agreement record whether such high risk clauses have been modified. From a long term perspective can allow you to identify language that is modified often, and internally evaluate if rewording a clause slightly could reduce cycle time.