Yesterday, I attended a webinar hosted by Apttus and Duff & Phelps titled, “Streamlining Contract Development with Contract Templates & Playbooks.” The main presentation was delivered by Jason Smith, the Director of Legal Management Consulting at Duff & Phelps, who outlined five best practices for maturing your contract development process with automated template creation, as well as some of the benefits of using a contract management system to create a Legal Playbook and template repository. (If you missed it, you can download the recording here).
Admittedly, if you’re not in Legal, the topic of “contract templates” may seem a bit dry, but it’s a perfect fit if you:
- Manage multiple contract types in a variety of geographies and languages
- Deal with constantly changing clauses and terms
- Are always reworking, reworking, reworking
- Lost money on deals due to incorrect terms
- Have a bunch of business departments that introduce contractual risk on a daily basis by MSU (making stuff up)
- Experience regular nightmares about audits
The idea of protecting your organization — and saving countless hours of time — by using standardized, centralized, controlled contract templates is pretty exciting.
You Are Already Using Templates, Why Not Formalize Them?
Using old contracts as a template may seem efficient, but it creates all kinds of risk. Your old contracts may no longer be compliant, or they may include pre-negotiated language, which means you’re not entering deals from a position of strength. If you are using the same contract types repeatedly, it makes much more sense to capture the standard information, and store it in a central repository, where you can track their usage.
Plus, if you have contracts spread across multiple hard-drives and file cabinets, the idea of consolidating all of your agreements to identify and push common contract types, clauses, and terms into a centralized Legal repository may seem daunting. But there is considerable reward — and revenue — if you’re willing to do the upfront work.
Contract Templates Take Legal To The Next Level
Leveraging contract templates within a centralized repository provide lots of opportunity for optimization of your contract management process.
For example, if all your contracts are template-ized, you can make make a change to a term or clause once, and anywhere the term or clause applies will automatically have the right language.
If you’re leveraging a more sophisticated contract management system, like Apttus Contract Management, you can run analysis on contract templates to find additional ways to optimize. For example, if you find you are negotiating away from your standard preferred language in 80% of your contracts, maybe you should change the standard preferred language to the most commonly updated language, and save time during negotiation.
Finally, if you’re leveraging legal templates in a contract management system, you can maintain control even when working with third-party paper. (Not all contract management systems offer this feature, so do your due diligence while researching.) Apttus enables you to import third-party contracts, and highlight how the terms and conditions differ from your own. This enables you to assess the risk and ensure third-party terms don’t deviate too far from your own.
Templates bring harmony to the workplace
As Jason Smith from Duff & Phelps pointed out, Legal often gets a bad rap for being “the sales prevention department,” so being able to work flexibly with Sales being a huge benefit. To me, one of the biggest (and most rewarding) benefits of leveraging a contract management system and a standardized clause library is that you can work better with the business users who need contracts.