June 13 by Prashant Dubey
“Y-Yes,” I stuttered.
“It’s nice to see you this afternoon.”
“Yes ma’am, it’s nice to see you too.”
“Ma’am? Please don’t call me that. That’s what people call my mother.”
I walked into the stacks with a smile. I was certain that banter and the parting comment meant that Ms. K. thought I was the cat’s pajamas. I was certain we were destined to live a long happy life together.
Clause Libraries – Not Libraries at All
Clause libraries – not so much. A collection of clauses in a contract lifecycle management (CLM) system are (or should be) organized and presented to users in some order, WITH value judgment. There is either a risk rating on a particular clause, or limitations on who can use it in a contract and with or without whose permission. It’s like Ms. K., only with overt rules.
To Look Forward, One Must Look Back Into History
When I headed to the stacks, I usually ended up in the history section. Not because I was enthralled with the books, but rather because the foot traffic there was minimal and there was a little desk I could sit at in the back to get some quiet and study. Further, the library in the afternoon was also used for detention – so the history section was the furthest one from the detention table. I had a reputation to uphold, however untrue (studious Indian boy, always followed the rules) so I needed to make sure my regular visits to the library after school were not misconstrued.
History, in the domain of clause libraries, is the foundation for how to build a rational library. It is going to sound trite, but really, it is quite simple. Review the starting point template of an agreement. Start with your own paper (let’s say an MSA). Look at 12-15 ending MSAs and identify the provisions most often negotiated. (Hint: if the ending language is different than the starting point, there was likely some iteration.)
The ending point represents your company’s acceptability threshold for alternate language. Further, the deviation of the language from the template can be a good indicator of the level of risk contained in each ending provision. Therein lies your list of alternate clauses by provision, that can be organized into a library.
Lather, rinse, repeat. Contract type by contract type.
Ms. K. would likely be proud that I’ve moved on.
Want to learn more about how to create a Clause Library? firstname.lastname@example.org
To learn ways to speed up the contracting process, visit the previous post – HERE.
The “Mastering Contract Lifecycle Management” series is written by Prashant Dubey, bestselling author of The Generalist Counsel and CEO of The Sumati Group, which is the Apttus premier contract migration and CLM Managed Services partner.