Enhancing Contracts: Simplification, Design, and Automation

Last week, I attended the World Commerce & Contracting APAC summit. There were many highlights, but I really enjoyed the full-day workshop I facilitated with Verity White (Checklist Legal, and author of Create Contracts Clients Love) and Sally Guyer (CEO of World Commerce & Contracting).

The topic was Contract Design, Simplification & Automation.

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While LawHawk can (and have) automate pretty much any form of contract and contract process, many of them are very traditional forms. They're overly long, not well formatted, written by lawyers for other lawyers, and contain many friction points that will slow negotiations and harm the overall relationship and effectiveness of the contract.

We've always felt that if we are going to automate a contract, we'd much rather automate one that looks amazing and is going to deliver the best overall outcomes.

It was great to see firsthand how Verity approaches contract simplification and redesign. Making the complex simple, she was able to quickly benchmark an example contract against best practice standards and identify areas for improvement.

Sally talked about the vast amount of resources that World CC offers its members when looking for research-backed contracting principles and standards to adopt as best practices. There's no need to figure it all out yourself.

From a LawHawk perspective, we can more easily put such a contract into an automated process where it is more likely that business users can self-serve – more easily understanding the contract and the outcomes it will create – and that it can be negotiated and approved most efficiently. Rather than saving hours of drafting time, weeks of overall process efficiency can be unlocked.

What order should things be done in?

It may seem logical to approach a contract improvement project in a staged way:

1. Rewrite contracts based on World CC best practices
2. Simplify and redesign
3. Automate.

However, in practice, they are best looked at together and as part of an ongoing process.

There's a reason most organisations don't have this already sorted. They are so busy that they never have time to make improvements. The best way to free up time is to automate what you already have, as that can be a very quick win.

When you use the freed-up time to simplify and redesign, you'll still have the same core concepts (parties, commencement dates, expiry dates, etc), and so it's not hard to overlay and update automation onto a new template.

Automation also facilitates simplification, as while the master template may be very long with numerous options, the assembled agreement can be much shorter and clearer, as everything unnecessary can be stripped out. However, each clause that is relevant and needed for a particular situation can be automatically included in as much detail as required. In some contracts, IP may not be important, and only a brief clause is needed. However, if it's important and valuable, the clause needs to be clear and effective and as long as required. If there is any doubt, process automation can ensure that legal is included, allowing them to verify the requirement.

Automation – if done well - can also create a lot more structured data that will enable better contract management and contract outcomes. Think, for example, about milestones and deliverables, and how each can be given particular performance standards, due dates, and payment amounts. Understanding what is possible with automation is likely to affect the approach to design and content. Without automation, you may stick with basic text fields that don't create valuable data and enable more active contract management.

It's about the outcomes.

Good contracting is about maximising the value of outcomes. Improving only part of a process is likely to significantly reduce the overall outcomes, as the process is only as strong as the weakest component.

Rather than automating bad contracts and processes, it makes sense to improve content, readability, and design at the same time. Working with a collaboration of experts such as World Commerce & Contracting, Checklist Legal, and LawHawk could help you get to the best possible outcomes in the least time.