One of the most riveting moments in sports is the final few minutes in a college basketball game. Why, might you ask? It is in these last moments where legendary players and great coaches are made. And, to be a great coach, you must have great plays. As any great coach will tell you, one of the keys to their success is having a great playbook filled with multiple plans of attack (or defense) as well as numerous contingencies plans, each of which have been tinkered with and tweaked over the years. While a playbook may not account for all possible scenarios in a game (such as the half court buzzer beater), it should account for the most comment situations and provide workable solutions to achieve success.
As a business leader, what are some of the insights you can draw from the great coaches? Well, first off, great business leaders need to think more like the great coaches. They need to make quick decisions and judgement calls that provide for the greatest chances of success under the circumstances. In the context of negotiating contracts, one of the most effective ways to achieve successful outcomes is to develop an ironclad contract playbook, inclusive of annotated templates and fallback guides to utilize when negotiating with your customers.
At Fourscore Business Law, we review contracts for our clients on a daily basis. One of the insights that we have noticed over the years is the amount of repetition in contract negotiations that ultimately create inefficiencies in how our clients have historically operated their respective businesses. As a trusted advisor, one way we continually provide value is by working with our clients to develop contract playbooks that drive efficiencies in their respective businesses.
If you are tired of delays while negotiating contracts and want to design solutions that drive your transaction costs down, you should think about developing a contract playbook for your business. As you weigh that decision, here are a few “Rules” you should bear in mind.
Rule #1– Design Great Templates
The first rule is arguably the most important – Design great templates that reduce unnecessary negotiations. Over the course of our practice, we see numerous poorly drafted contracts. Many of the worst offenders are contracts that have either been piece-mailed from the internet by a non-attorney, or, worse yet, written by an attorney who lacks comprehensive knowledge of legal contract drafting. Poorly drafted contracts mean that your business likely incurs delays in your time to market on the execution of your contracts as well as increased transactional costs, including legal. By designing a great system of robust templates with counsel that is highly competent in legal drafting and negotiation, you should be able to quickly see results in not only increasing the speed of getting deals signed but also decreasing the overall risks and sunken costs you assume with a negotiation.
Rule #2– Design Great Plays
The second rule is all about knowing what’s important to you and the customers you serve – Design great plays that mitigate your risk and alleviate pain points for your customers. As an effective business leader, you know that having the best contract template in the world cannot possibly account for every possible risk unique to a particular deal or the bespoke desires of your customers. One of the most effective ways of streamlining your contract negotiation is by developing fallback language to your contract template and organizing it in a playbook. By designing a robust set of fallbacks that outline alternative ways to address a customer’s requested changes, you can streamline your process to create transparency in your contracts and mitigate overall exposure to potential liabilities. It is important to note, however, that great fallbacks don’t just offer a single option. Instead, they account for multiple scenarios and give several alternatives from which you can utilize to determine the best fit for the particular situation. Great coaches design different plays depending on what cards their opponents show. When it comes to contract negotiations, your approach should be no different. At Fourscore Law, when we develop playbooks for our clients, we take the time to understand the key hurdles in the contract negotiation process and develop fallbacks that drive creative, consistent, and methodological approaches to drive efficiencies in our clients’ respective businesses.
Rule #3 – Keep It Simple
The third and final rule is sometimes the most difficult one for businesses to follow – keep your playbook simple, but effective. When designing a playbook, it is very easy to overly complicate matters in the pursuit of perfection. There is no perfect system – an effective playbook does not require accounting for every possible scenario that may play out during a negotiation. The goal, rather, should be in designing a guide that provides the tools for businesses to address a majority of the consistent, repetitive points or topics most commonly negotiated in their respective contracts. A good rule of thumb is utilizing the 80-20 rule; aim to design a playbook that accounts for 80% of the situations that most commonly occur in your business. By doing so, you will be able to deploy a system that becomes an effective tool that your business can use that is neither overly complex nor unnecessarily comprehensive.
Overall, an effective playbook should increase your time to market and mitigate the overall risk in your contracts. By making an investment in playbooks and fallback guides, you should see reduced costs and less friction within your negotiations.
If you want to speak more about how you can invest in great templates, fallback guides, and playbooks for your business, feel free to contact an attorney at Fourscore Law.
Based in the Research Triangle region of North Carolina, Fourscore Business Law serves entrepreneurs and businesses in Raleigh, Durham, Chapel Hill, Wilmington, Charlotte and throughout the Southeast. We also represent venture capital funds and other investors who invest in companies located in New York, Silicon Valley and everywhere between. The idea of delivering maximum impact in a simple and succinct manner is what we’re calling the Fourscore Principle. And that is what Fourscore Business Law is based on. Our clients operate in a broad range of industries including tech, IoT, consumer products, B2B services and more. Questions? Shoot us an email or give us a call at (919) 307-5356. Your first call is on us.