How I Streamlined Contract Management and Reduced Review Volume by 50%

Strategies for legal teams to cut the workload while maintaining control

Legal teams today are drowning in contracts, often spending valuable time reviewing every document that crosses their desks. But what if there was a way to reduce that burden without compromising control?  What if you had a way to reduce burnout and boredom and increase stakeholder satisfaction all while meeting your company’s risk appetite?

When I first began managing vendor contracts, the sheer volume was overwhelming. Legal reviewed everything and we were almost always working off the counterparty's paper and everyone (legal, procurement, and our business stakeholders) was miserable. By following the below steps - inventorying, categorizing, building, and evaluating - we managed to cut that workload in half in less than 6 months!  The results were huge - happier legal team members, happier stakeholders, better relationships between legal and our stakeholders, better contract terms, better risk mitigation, and faster vendor engagement.
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Here’s the How-To on Streamlining

Step 1:  Inventory Your Contract Workload
I was lucky, we already had an intake system that allowed us to mine inbound requests for data. However, if you don’t have that data already available to you, you can just keep a running count for a month to get a sense of volumes and talk to your stakeholder departments to identify any potential volume spikes during other months (e.g. benefits season for HR). I will note that centralized intake gives you better data, more effective management, and better business continuity and can often be accomplished with technology that your company is already using.

Step 2: Categorize Your Contract Chaos
Once you have a sense of the types and volume of contracts, you can create contract categories by complexity, risk level, strategic importance, and volumes. Below is a template you can use for contract categorization.  Categorizing allowed us to determine which engagements were suited to pushing our own standard form, which contracts could be handled by procurement using a checklist or playbook, and which contracts we could empower business owners to self-manage. Doing this not only reduced our workload but also allowed us to focus legal’s attention on high-risk and high-impact contracts.

Step 3: Build Your Resources (or Invest Time To Save Time)
There are three key strategies to getting contract review off legal’s plate.  They all take an investment of time and strategic change management, but the upfront effort to standardize contracts and educate teams pays off massively in the long run—saving hours of legal review time and reducing bottlenecks in the approval process.

• Use Standard Forms to Save Time
  As a seller, you often feel like every customer is pushing their standard form contract on you and most of the time it makes no sense. Having focused entirely on the sales side for quite a while, I wanted to be very strategic on what standard forms to push and what to include in them to meet the goal of reasonable efficiency.  Reasonable efficiency requires a standard form that covers what matters most and will get signed with the least amount of effort by both sides, not a form that addresses the kitchen sink of risks.
• Delegate with Checklists and Playbooks
  Checklists and playbooks outlining negotiation guidelines are essential for any legal team that wants to scale. They are also the key for any legal team that wants to get contracts off their plate because they can empower non-legal teams to manage contracts within set parameters while ensuring consistency and compliance.  The breadth of the checklists and playbooks depend on the complexity of the agreement. Here is an example of a lightweight restaurant contract review checklist that can be provided to any team doing an event at a restaurant. For pointers on how to build out a playbook for more complex contracts check out our blog on Three Simple Steps to Building an Effective Contract Playbook.
• Educate and Empower
  Business stakeholders are often overwhelmed by contracts and typically pass contracts along to legal without even opening the document. Yet almost all of the terms in contracts boil down to business objectives and many of them are straight business terms. Taking the time to take the scary out of contracting for non-legal teams can pay off dividends when it comes to getting contracts closed. One way to do that is to introduce your business stakeholders to basic contractual concepts and the business aspects of your standard terms.

Step 4: Evaluate What You’ve Achieved
Review the data—has the volume of contracts requiring legal review decreased? Have turnaround times improved? Are your stakeholders happier with the process?  Are there opportunities for further streamlining?  Still want to get more contracts off your plate and save time?  If you’ve followed these steps, your legal team should already be breathing easier. But if you're looking for even more ways to streamline, consider using trusted partners (like ALSPs) to handle your large volume contracting or explore automating your contract review process using tools like Dioptra.ai (shameless plug).

By following these four steps—inventorying, categorizing, building resources, and evaluating—you can dramatically reduce the contract review workload while maintaining control. Your legal team will be more efficient, your stakeholders more satisfied, and your contracts more streamlined.

Resources

• Categorization Template (Excel) (Google Sheets)
• Restaurant Agreement Checklist

Follow me on LinkedIn for more tips on efficient contracting.

Laurie Ehrlich

Chief Legal Officer