Introduction

Playbooks are a crucial tool in improving negotiations of your high-volume contracts. Unfortunately, there are few companies that have up-to-date, usable, playbooks that are being consistently used by their contracts team. This can be quickly fixed, and this guide explains how.

What is a playbook?

A playbook is a set of rules and guidelines for negotiating contracts. Playbooks can set out fall back positions on common issues, who to escalate to, and provide reasoning on why particular positions are being taken.  A company’s contract template sets out the starting positions on the relevant issues, the playbook is the tool for capturing what to do when the counterparty either provides the first draft or marks up the template. 

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In other words, playbooks are both a repository for knowledge that shouldn’t live in the templates themselves (it is generally considered ill-advised to send out fallback positions in your contracts) and a practical tool for the team to use to handle negotiations. Getting the balance right is hard.

Why playbooks matter

Playbooks are a powerful tool to improve how your company negotiates:

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Consistency

All things being equal, you will want consistency in your contracts, because you will want to be able to reason about them as a portfolio, because they need to reflect your organisational processes and priorities, because some outcomes are better than others, and because you don’t want every contract to be a voyage of discovery when it comes to delivery. Playbooks help you deliver more consistent outcomes.

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Spread learning

There’s a lot of valuable knowledge in the heads of your senior lawyers. Playbooks are an excellent way to turn tacit into explicit knowledge and share institutional knowledge across your team - not just what to do, but why it matters.

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The basis of improving negotiations

You can’t meaningfully improve anything until you have a consistent way of working, so you can test whether any “improvements” actually help. Playbooks are a way to standardise your organisation’s approach to negotiation, as the foundations for consistent negotiations.

Creating Playbooks

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Structuring Playbooks

There are two ways to structure a playbook, depending on whether the negotiation is based on your template (your paper) or the other side’s:

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‍Other side’s paper: When reviewing the other side’s paper, the playbook is likely to be a list of points based on principle, often structured as points you want to see covered in the agreement and points that you don’t want to appear.

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‍Your paper: When it’s your agreement, it’s more helpful to order the points following the underlying template’s order (with a few general points up front). It’s often easy to predict where the other side will raise issues.

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Either way we recommend doing it as a table, because you want it to be easy to find the relevant points, you want to structure the information consistently, and because it helps head off the tendency to write essays:

Playbooks tend to be created by contract type, but you would expect consistency across them on key issues (to the extent relevant to that type of deal).

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A first version… in hours

Playbooks can be created quickly, in a matter of hours, using a simple process:

1. Get a structure

We’ve given you a starter for 10 above. Use it to create a document.

2. Get a team

Get a few experienced members of your team together and write down the most common points that come up, and what to do. You are not trying to be comprehensive, just enough material to be useful. 

3. Publish your starting point

Put it somewhere easily accessible, in a format that can be easily edited. Get feedback on any issues that they would like the answer to.

4. Only ask once

Have a rule that when a team member asks a question about how to handle a point not in the playbook the answer gets added. Your playbook should be a living document, so you need to have a process in place to ensure it is updated regularly and everyone is using the latest version.

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Easy, right?

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Why playbooks are hard

In practice, the simple approach we describe above doesn’t tend to be followed. Playbooks require not only a change in behaviour (and so are part of a cultural shift) but can be resisted for more profound reasons, and not just “lawyers being artists”:

Perfectionism

It’s natural to want to make sure that everything is complete, as well as right.  We are all for pursuing perfectionism, but that comes through having a tool that is used in practice and keeps being improved, not by spending many months debating something that still isn’t being used. Negotiations and decisions are happening everyday. Delaying getting a playbook in use doesn’t improve quality, it means that those decisions continue to be made without the support a playbook would offer.

Fear of being blamed later

Sometimes there is a bigger concern in play - writing things down exposes one to being blamed later if something goes wrong. This is understandable, especially because it’s hard to predict all the different scenarios that might come up when you are documenting rules in advance. Here are some ways we find help in getting past this concern:

Escalations

You don’t have to give the answer to every scenario. A playbook is an excellent tool to flag when a point should be escalated for more nuanced judgement calls. Just make sure this isn’t used for every issue.

Guidance over rules

Sometimes clear rules are important, but sometimes there are many ways to solve an underlying concern. If there are multiple acceptable outcomes, then explain the concern and phrase it as more guidance than rule. In any event, you want to be principle-led, to give your negotiating team room to manoeuvre. 

Expand the discussion

It’s not just the lawyers who should be making decisions—this is a fundamental business question about how comfortable you are taking on risk in order to accelerate contracting, and also what real-world issues need to be addressed in your contracts. Work with the business team to identify the real issues that come up in practice and how you want to deal with them. 

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We also recommend using data and actual experience to inform contract playbook content, not just opinions. Have conversations with risk, finance, and operational teams about what issues are actually arising in practice, and whether perceived problems are hypothetical or real. 

Best practices in playbooks

Some lessons we learned the hard way in creating effective playbooks:

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Keep the points short

Keep the content punchy and practical rather than theoretical or academic. You want to make it as easy as possible for the team to understand the issue, confirm its relevance to the change to contract they are negotiating, and see not only the rules and escalations but also why the company is taking this position.

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Use links

We want to keep the playbook short, but that doesn’t mean that there is no value to more detailed explanations for the users. Rather than include it in the playbook, use the playbook as a launching point and include links to longer explanations that you feel are useful.

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Don’t try to be exhaustive

Random issues come up all the time in negotiations. If you try to cover everything, your playbook will be impractical. Focus on key issues rather than attempting to be exhaustive. You only need to cover the big points that have the biggest impact on your organization.

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Show how issues are connected

Contracts are highly interconnected, and issues can touch on multiple clauses. This doesn’t prevent playbooks from being useful, but it does mean that you should flag connections between issues and explain where it is OK to accept concessions in one area if you maintain protections in another.

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Don’t just say no

We are trying to avoid creating robotic lawyering, so there is a fine line between having some structure, and so much structure that deals can’t be cut. If you want to just say no to every point that is raised, then assuming you have the leverage needed, just put your terms on your website as a pdf and don’t negotiate. If you aren’t in such a lucky position, then let your team cut a deal.

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Avoid lots of fallback steps

Every round of negotiations is delaying not only signing, but more importantly getting the value from the contractual relationship. If you can concede an issue, then just have one fallback rather than a complex series of steps. Even better if you can just go straight to the compromise in your standard terms and head off the issue altogether. 

Building on your playbooks

If creating a playbook is necessary, not sufficient, where do you go next?

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Maintaining and improving

Radiant is built around continuous improvement, and playbooks are no exception. We recommend (in addition to the ask once policy):

Make improvements easy

The more you empower the front-line team to update the playbook, the more likely it will reflect what’s actually needed. Although that can feel risky, remember that your team is making decisions every day anyway and you are going to be better off with an evolving document that is used than a bunch of incorrect assumptions being applied in practice.

Regular reviews

You will still want to do regular reviews to make sure that the playbook is up to date, relevant, and helpful. This is also a good time to check in with users for improvement ideas.

Go and see

Go to the “Gemba” (the lean term for the place where the work actually happens) and see how the playbook is being used. A simple check is whether the team member can find the playbook in 30 seconds and are confident that it is the latest version.

Work with the team to make it more practical. We find ourselves regularly assuming the playbooks we use are clear… until we read them again.

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Use your playbook to get rid of issues

Your playbook is a valuable source of points that come up in negotiations. Ideally you want it to be getting shorter over time, not longer, as you get rid of the need to negotiate points at all. Consider whether you can remove issues by:

• Making the template language less inflammatory or by making provisions mutual
• Ensuring that you are aligned to market with the terms you send out
• Checking whether the points you are fighting for are really valuable to the business and worth fighting at all.

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Moving upstream: giving playbooks to the business

Playbooks are not just for the contracts team. They can also play a valuable role in moving negotiations upstream to business users before there’s a need to involve the contracts team. 

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Playbooks are part of a suite of tools that you can use to empower the business, along with templates (and especially automated templates), FAQs, and training materials. The game over time is to make contracting as easy as possible, so the contract teams currently drowning under high volumes of lower value contracts are able to focus on more strategic and valuable deals.

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Playbooks should be made as simple as possible, this is even more true as you start to empower business users:

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- Be clear on what can and can’t be agreed to, with pathways for escalation to - the contracting team.

- Include example language for acceptable compromises.

Ensure that the playbook is hosted in a way that everyone can find it and are using the current version - an excellent use of an internal portal. 

Provide explanations of how the clauses work, and their purpose, as well as how to deal with issues that are raised.

Provide training, ideally with resources that can be referenced later rather than relying on live training.

Be thoughtful about the points that are worth being dealt with early in the process, versus points that really should live with contracting experts.

Playbooks as the foundation of knowledge management (and AI)

The inherent structure of playbooks make them an ideal foundation for contracting knowledge management. You are fundamentally building a hierarchy of themes (e.g., confidentiality), issues (e.g., how long confidentiality continues) and positions (e.g., 3 years). 

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Issues turn out to be a more useful way of reasoning about contracts than clauses, and Radiant has been building on this for many years (we’ve identified for example hundreds of generic issues to allow us to connect our clients’ playbooks and provide our lawyers with relevant information across our playbooks.

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It also turns out that having a knowledge structure for contract issues is fundamental to applying AI to contracting. If you want to know more about this, join our series of workshops.

Conclusion

Playbooks are a fundamental tool for improving negotiations. They introduce greater reliability and consistency in handling issues, spread learning across the team, and form the basis of standardising your contracting knowledge for future improvements. Your playbooks need to be practical tools, not lengthy essays, and they should be used all the time and regularly updated.

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Getting going is easier than you probably assume - you could have your first version in use by the end of tomorrow.