Despite my pleas, I still run into some people who don’t appreciate just how important contracts are to companies or society.  I try the classic arguments about how contracts are the life blood of an organization or how all the revenue and risk of a company is contained in the contracts it signs. But I don’t think people always appreciate this emotionally. So here is an argument that hopefully “drives it home” about just how important contracts are. Over the last few years, we, as a society, had to give up a number of things in order to get through this pandemic.  We gave up restaurants, travel, the office, live events, seeing family and friends. We even gave up hugging our grandmas.  But do you know what we didn’t give up? Contracts. Yes, most companies generated more NDAs (that no one looks at) than hugs for grandparents last year.  Contracts HAVE to happen for a company to exist.  And not to get all Statute of Frauds, but handshakes aren’t what they used to be.  We paper deals and that paper matters. Perhaps that paper matters more than hugs. Reductio ad absurdum arguments aside, what I really want to write about is people and how important they are in the contract lifecycle.  Not any people mind you, but the right people at the right time and using their highest and best purpose. 

I write a lot about technology and how to use it for contracting as well as contract and commercial management.   And perhaps my BPO heritage makes me a little biased towards process and reporting.  So, I do understand the comments about people, as in, “don’t people matter too?” The answer is yes.  Of course people matter. I love people. Some of my best friends are people. The right people, in the right situations, are critical to proper contracts performance.  Contracts are touched by everyone, but owned by no one in an organization.  Because of this, it’s important to remember what skills people have as well as where and when to use them so as to be a success. We know this. We know that people have many different talents and that they should do what they are good at. Brad Pitt is a fantastic actor, but probably not ready to be the striker for Chelsea. Similarly, I think Lukaku has amazing touch with the (foot)ball, but probably is not ready to take on Lebron James in one-on-one basketball.  

Since we understand the need for different skills at different times in the real world, why do we get confused when it comes to contracting or contract management? Why do we think that all lawyers can be experts in legal constructs and also good at obligation management or SLA performance?  Why do we think that financial experts can also appreciate the nuance of indemnity vs. warranty?  We know that different skills are needed for different jobs and that contracts are business documents full of legal, commercial and operation risks and opportunities. And yet many companies still attack the contracts challenges with a homogenous workforce of one skill or the other. Flour is not tasty by itself, but mix it with oil, sugar, salt and cinnamon and you get something good there. Creating and managing contracts is no different. The variety of perspectives and skills make it great.  And here are some examples of where different skills could fit in – as well as perhaps where none are needed, e.g. technology.  I’ll use creating contracts as the primary example, since we all like that, apparently.  But post-signature support has just as many examples.

Process

It’s been a long time since I was in law school.  However, I don’t think that Visio and Lean Six Sigma are quite yet topics given the same importance as Torts, Con Law or even Condos and Co-ops in most law schools. I think more lawyers can explain escheatment better than they can identify what the generally accepted shapes are for a Process vs. a Decision in a Smartsheet. Again, this is not a knock on lawyers, but an appreciation that there are highly skilled individuals who can map, challenge and optimize a process better. There is a whole corpus of training on how to look at a process to minimize steps and even implement it that the ultimate SME – legal – may not have access to. This is not to say that there aren’t lawyers who have cross-trained and beyond, but rather more of an acknowledgement that those are in the minority and not the default. 

Intake & Triage

This is where I think robots win.   But only robots that have been programmed correctly.  I have gone through this with far too many teams and the pushback is usually this: We can’t make rules because everything is bespoke. I acknowledge that contracts may feel like that in the micro, but in the macro there are patterns and when we challenge ourselves we will see patterns. If you peel back the onion, you’ll see that there are non-monetary contracts (NDAs, Teaming, etc), low-risk, high volume contracts (procurement under X amount, sales terms on company paper), higher level documents (GSAs, MSAs) and finally, truly special documents (M&A). If you push on the criteria for each, get some simple AI and accept that some (not all) need white glove service, you can program a tool, bot or other to do this. Often times, companies focus on the special and forget the ordinary, clearly not realizing that the ordinary is where the bulk of activities lie. I used to work at a place where we signed 50,000 contracts a year.  Not everyone was special. Intake and triage are places where lawyers, commercial people and sales teams can and should work together to evaluate the right level of support and then let the machine do it.  Again – use the people where it makes sense.

Playbooks & Initial Review

People are very smart all over the world.  Let’s use that.  But beyond those truths, there are mix of solutions where tech, lawyers and “non-lawyers” can all add value. I do hate the term non-lawyer, but for binary arguments it does serve a purpose. As stated, contracts are mix of legal, commercial and other obligations, rights and risks. A playbook that just takes into account the carveouts around limitations of liability is … interesting. But a fully formed playbook that takes into account sales, commercial and other strategies is like gold. It is a document that, in its creation, forces a thought process on the types of deals a company wants to sign and not just “not sign.” Subtle difference I know, but companies that can target what they want vs. what they won’t accept tend to get to signature faster and know their partners. Wanting a car that won’t break down vs. wanting a car that will get me to the train station, drop off my kids, and require minimum maintenance are logically consistent thoughts, but one is proactive and the other is defensive. Which is better? The point is that bringing more skills to the review can make it more useful. Whether this is done by a bot or a smart person who can read anywhere in the world is something tech is dealing with now…but remember my first sentence in this paragraph.

Negotiation

This is everything and nothing, perhaps. Depending upon the size, complexity and uniqueness, you may need that expert of experts to negotiate the finer points. And yes, this is a place where expertise is needed. Large outsourcing, licensing or M&A deals need something not everyone has. But not every deal requires that. So perhaps some of those smart people around the world can do some of the work and maybe the “non-lawyers” with some training or guardrails can do some of this. I get asked about self-service weekly; I think it’s a thing now. Echoing back to intake, it’s important to know when to use people the right way. The business can do a lot if the system is in place to allow them. Different delivery models can do much of the business as usual and then there is a need to have the experts.  Imagine a place that could offer all that. But more to come on that. 

Signature

Here is where my love of people breaks down slightly. I know that there are some countries and reasons for only using the noble, long-standing solution of pen and paper. But please. There are multiple solutions, at affordable price points. Consider this as not the best use of a person or persons. Now, there are certainly areas where people can add a lot of value around this. For instance, a combination of legal, commercial, risk and finance should be involved in creating the approval matrix for who should and can sign certain documents. CLM tool and process experts should create the workflow that optimizes efficiency and also challenge the first group that things are not over-complicated. However, actual signature should be a button click

To sum all of this up, I want it to be known that:

• People are great;  
• People are skilled; and 
• People are needed for judgment, rules creation, thoughts and nuance. 

However, contracts sometimes need all of that and sometimes they don’t. It is important to know where to use the right people in the right place in the contract lifecycle and also where not to use people at all. Besides, it’s a tough market out there. Let’s give the robots a few jobs too.