Deploying a Contract Management System Part II of II:

Dan Townsend
Dan Townsend | Sales Director North America

Template and Clause Libraries

Templates

There is no doubt that the use of a standard library of templates is efficient, effective and provides numerous benefits such as:

  • People know where to find the documents without help from Legal or Procurement professionals and this will help to significantly reduce cycle-time
  • The use of standard terms and conditions greatly reduces that amount of time to review and negotiate an agreement as standard language does not need to be reviewed again and again
  • As terms and condition language change over time, the ability to update and push out the changes is critical and will improve the quality of the language to help minimize the risk of using improper/outdated clause text.
So where do you begin?

This question is partially answered by the decision on what phases your organization wants to implement. Our experience has been that many of our clients have dozens and dozens, in some cases hundreds of templates. It is a challenging task to review every one of and consolidate them down to a manageable number so you will need to organize them by type. Let’s assume for a moment that you want to start with NDA’s.

Symfact has found the following to be a successful approach:

  1. Collect -Search across the organization to find out how many kinds of NDA’s exist—and are being used—and then get copies of each. Then review and rationalize which ones you want to use. Alternatively, you can consolidate the best parts of these templates and come up with a new set of templates.
  2. Analyze - You will need one or more people from Legal to go through each of these documents and determine how many of these are really needed. Can you take multiple versions of two-way NDA and agree on one version or perhaps one version for each continent?
  3. Consolidate where possible - The ideal goal is to reduce the number of NDA templates down to a minimal number of each type of NDA (one-way, two-way, partner, etc.). In some cases, you may need to have some regional differences in one country versus another. But it is important to be very critical on what variations you ultimately include in the new Template Library.

Clauses

As part of the template rationalization you will also need to think about what common clauses may exist between these different templates. While the creation of a Clause Library is a ‘nice-to-have’ item, the success of the system isn’t going to be dependent on having or not having a Clause Library. However, there are advantages of having this Clause Library:

  • It allows for better management of a change to a clause that is used in multiple templates (you can edit the clause once in the Library and this change can be automatically pushed into all the templates that it is used in).
  • By having a Clause Library, it serves as a tool in which you can propose language when you must use Third Party paper. There will always be the case where you will have to use someone else’s template. Having a repository of approved clauses that a non-legal person can draw from you can propose changes to these third-party documents knowing that the language has been pre-approved by your Legal department.

Setting up of the Clause Library is not that complicated or a lot of work, but it does require the involvement of legal staff. Once you have rationalized what templates you need you can extract the clauses that are common and easily drop them into the Clause Library.

One important factor to keep in mind is that the creation of the Clause and Template Libraries are tasks that almost always fall on the Legal department. Insure their time commitment is understood against their daily workload. As such, we need to recognize that they are extremely busy people and getting their time will be key success factor to get the contract management system up and running.

Conclusion

When implementing a contract management system, it is sometimes difficult to know where to start. Symfact’s experience with contract management implementations over the last 18 years has clearly shown that a methodical and logical approach driven by the client’s goals and objectives are the keys in a successful transition to an automated contract management process.