Why Most In-House Legal Playbooks Fall Short

Playbooks are important. Well, duh.

But Why?

Because not only do they help your team understand what to do when a customer asks for changes to your standard contract, they can be real time-savers.

Playbooks can vary in scope and content. They can be bared boned documents that provide a before and after clause, or they can be more useful, providing the why behind your philosophy. I tend to like the second flavor better.

Ten years ago, when I was a senior commercial lawyer, I was given the task to revise our playbook. This was no easy task because we had a team of over 50 global lawyers who looked at this playbook like a bible. It took me months of review and discussion to get final alignment on all the areas our standard contract cover—and our playbook spanned more than 100 pages!

Even so, some could quote it, chapter and verse, like the bible or the Constitution. At one point, we had heard that the two most senior lawyers were contemplating a change to the limitation of liability section—meaning it would be harder to close contracts with customers because we would be taking a tougher stand. Instead of moving ahead with the change, we quickly negotiated as many of our agreements with the old clause because it was “still good law.” We actually said this.

When Your Playbook Becomes a Bottleneck

What’s wrong with everything I just told you?

1. A playbook needs to be a living document—much like the constitution. I mean—how much has the 4th amendment law changed while I have been practicing law (really, it’s true, you can look it up).

2. A playbook needs to be easy to use and understand - but also needs to provide guidance for a lawyer to deduce the next step when the playbook hasn’t covered a new area that a customer is asking to change.

3. A playbook needs constant updating—you can’t wait for someone to painstakingly review it for months. Things move too fast today.

Updating Playbooks Without the Lag

So what should you do in today’s AI era?

First, if you have already created a great playbook, that’s great, no need to start from scratch, but with AI, you can make one more easily or keep yours updated much faster.

You can pick your AI tool and let it learn from your already negotiated contracts. Once it is trained on the contracts, many tools will create a playbook for you, providing you the standard clause and fallbacks based on your past negotiating stances.

This works well if things haven’t changed but say that you have grown and now have more weight to throw around. Maybe you are no longer willing to give as much away in your fallback positions. You can easily adjust this in your playbook.

What Changes When You Operationalize It

The beauty of using an AI tool to both create your playbook and to redline your contract with it is that it makes your future contracts more:

• Consistency (everyone on your team no matter where they sit will have the same fallbacks (in theory this is true but you may need to enforce this). This also helps avoid the sales teams favorite tactic of asking around to get an answer they like better.

• Efficiency- it’s much easier for people to read the playbook and ask questions instead of coming to every 1:1 with their manager without a clue on the company’s stances.

• It allows people to group-source new changes to the playbook as a means of updating it, fostering a team spirit and more collaboration.

All this should lead to faster turnaround time for your contracts.

The Hidden Cost of Over-Control

One area that I have found to be hard for managers related to playbooks though, is the need to give up control. Most managers want to provide fallbacks but only to a point. The hardest fought agreements have the worst terms for your company (typically) and no one wants to repeat those. Certainly, no one wants them to be in the playbook.

Building an Approval Structure That Scales

If you are seeing consistent asks in the same clauses, it is wiser to add fallbacks that you have created, along with an approval matrix. To start, you can have the approvals be at higher levels, but over time, you would be wise to drop those down to lower levels so your team feels empowered.

Failing to do that means the manager has to agree in the end - always coming in at the last minute to be the hero on the deal. That means that sales will call the manager into every deal, leading to the team feeling minimized and micromanaged, unempowered and disgruntled.

Final Thoughts

So, take it from me - create a playbook that is useful for your team, let them take part in its iterations and make sure you give them some autonomy in decision-making. This will make everyone’s life easier, sales happy and allow your company to do business with more velocity, making legal the hero!

Shanti writes a short newsletter about Playbooks that can be found here—and if you don’t subscribe to her free newsletter In-House Lawyering & Beyond, you can do so here.