10 Takeaways From Loio Contract Drafting Best Practices Webinar
On July 8, also known as Chocolate with Almonds Day, we hosted a webinar on contract drafting. We were lucky to welcome three contracting gurus as expert speakers sharing their vast knowledge of the most effective approaches to contract writing and negotiation.
Look at this line-up:
- Laura Frederick, an ex-Tesla and ex-Big Law technology transactions attorney, the founder of the How to Contract training platform, managing attorney at Laura Frederick Law, and best-selling author with over 1,600 copies sold of her contracting tips book on Amazon.
- Lisa Lang, the General Counsel for Kentucky State University, the creator of the LinkedIn series WHY DO THIS, NOT THAT™, and a contributor to Contract Nerds and to the anthology #Networked.
- Flo Nicolas, the Chief Growth and Community Officer at How to Contract, Cable and Utilities Committee Board member, Library Trustee Board Member, experienced technology counsel, and a contributor to Contract Nerds.
The 60 minutes of the webinar were not enough time to answer all the questions the audience had. Even so, our speakers did a wonderful job sharing tried and tested techniques every legal professional can use to boost their career and help their clients reach their goals in a more efficient way.
If you missed the webinar, we invite you to check out these ten takeaways we have put together for you.
- How can better contract drafting skills help you boost your career?
- What is the right mindset for writing better contracts?
- What professional skills should you have to draft better contracts? Is it different for lawyers working in-house and in a law firm?
- Is having a contract playbook important?
- Are there any tips on how to create a contract playbook?
- What are the biggest mistakes to avoid when drafting a contract?
- What should you know about your client to draft better contracts?
- What are the tips for working in a team when drafting a contract?
- What are the time management tips in contract drafting?
- Is it important to use technology in contract drafting and editing?
1. How Can Better Contract Drafting Skills Help You Boost Your Career?
First of all, contract drafting skills have become an additional value that lawyers can bring to the organization or business they are working for. Not every company has lawyers who specialize in contracts as well as the opportunity to hire such people. So, having contract drafting and reviewing skills makes an attorney irreplaceable for the organization.
Secondly, contract drafting is a good way to build a healthy relationship with the partner, because this process implies conversations and negotiations about the goals of each party and ways to achieve them. Wise contract drafting is also a way to reach a compromise and foster partnerships, which is crucial for succeeding in a legal career.
Finally, contract drafting skills make a lawyer become known for their ability to solve problems and accomplish business goals and not just providing legal services.
2. What Is the Right Mindset for Writing Better Contracts?
One of the most important components of the right mindset for improved contract drafting is the simplicity of the contract language. When drafting a contract, it is critical to remember who will have to read it. Make sure the document is as clear and concise as possible. In particular, if you know that the reader is not a lawyer.
As Flo Nicolas, Chief Growth and Community Officer at the How to Contract training platform has noted:
“No one wants to have to hire another attorney just to figure out what the attorney they hired said. When you’re working with a business team, they want clear and concise language. Keep it simple, straight to the point, and capture the business objective.”
3. What Professional Skills Should You Have To Draft Better Contracts? Is It Different for Lawyers Working In-House and In a Law Firm?
The essential skill required for contract drafting is the fundamental knowledge of writing. It involves a good knowledge of the language a lawyer is drafting in and understanding how certain structures work. But again, there is no need for complex sentences and detailed descriptions in contracts: instead, they should be written in a form of straightforward simple sentences. Knowing how to combine words to convey a certain message is the number one skill for contract drafting.
The main difference between law firms and in-house settings is that there is not much room for error in law firms. Law firm lawyers are cut out for perfect and thorough contract drafting, whereas in-house lawyers usually have to process more contracts in a shorter time frame. Therefore, contrary to law firms, the focus shifts to progress over perfection in the in-house setting.
4. Is Having a Contract Playbook Important?
A contract playbook is extremely important because it lets a lawyer save time when working on different types of contracts. Playbook relieves a lawyer from going back and forth to the business teams and asking whether something is suitable for them or not. It acts as a bridge between the legal team and the business team, letting a lawyer negotiate more effectively, without agreeing upon every term and detail with stakeholders. Ultimately, it tells you what the negotiables and non-negotiables are. It gives you a framework for the whole contract.
5. Are There Any Tips On How To Create a Contract Playbook?
To create a legal playbook that will be helpful, a lawyer needs to know their stakeholders. The guidelines of the contract drafting may differ for lawyers, contract negotiators, sellers, procurement buyers, public institutions, etc. Therefore, in certain cases, dividing a playbook into different levels is necessary.
Moreover, it is advisable for a lawyer to have a personal playbook for collecting important insights they come across. Laura Frederick, ex-Tesla and the founder of the How to Contract training platform, has shared her thoughts on this matter:
“If I find a great table that outlines this, or if I find a memo that gets into this detail, I’ll cut and paste it into my playbook so that I remember it in the future. There’s so much to know, and there’s no way to remember it all. So, identifying things that are insightful and keeping them in your own files is critical for our career success.”
6. What Are the Biggest Mistakes To Avoid When Drafting a Contract?
Our speakers have distinguished six common mistakes to avoid:
- Repeating the same information. This may confuse the parties and lead to a lack of clarity regarding their responsibilities.
- Getting the names of the parties incorrectly. Oftentimes, the business is divided into several different entities, so it is important to put the proper names to not confuse the signers.
- Making assumptions. If you are not 100% sure about what the party meant, it is better to ask for clarification than to build a contract with an assumption that’s incorrect.
- Using ambiguous language. A contract with ambiguous language may cause a lot of confusion. Using clear and concise language will guarantee there will be no misunderstanding of the contract clauses.
- Mentioning entities that are not parties to the contract. It sometimes happens that a contract includes duties and responsibilities of the other entities which are not executing the document. Such information overloads the contract but doesn’t bring any additional value to the signers.
- Referring to the deleted section. Lawyers are often reusing and editing contracts they had previously worked on, and it often happens that they refer to the contract section or attachment which is already deleted from the file. It is important to make sure that the items you are referring to are actually there.
Disclaimer: our contract review software Loio can help you never make this last mistake. Would you like to try it out for free? Click here!
7. What Should You Know About Your Client To Draft Better Contracts?
First of all, you need to know your client’s objectives and needs. It is very helpful to have a huddle call with the client, where you can understand what the task is and what needs to be accomplished. The goals need to be incorporated into the contract for the negotiations to be successful. So it is important to draft a contract not blindly, but with a clear understanding of the client, their goals, their industry, and their product.
It is also important to understand the client’s experience of contract negotiations because this affects the whole drafting process. If the client has little experience of working with contracts or with the industry, then the lawyer needs to be more careful regarding the feasibility of their requests.
8. What Are the Tips for Working in a Team When Drafting a Contract?
For teamwork to be effective, people need to work with integrity and respect. It is key to not only build rapport among teammates but also to maintain the business relationship and aim for the same goals.
It is also important to know the team members’ areas of specialization and distribute responsibilities accordingly in order to guarantee effective collaboration.
9. What Are the Time Management Tips in Contract Drafting?
The main tip for better time management is to prioritize tasks by importance. Though sometimes it may seem that every contract out of 20 to process today is equally important, there are always a couple of things that are critical. Therefore, focusing on these several things and sparing no effort for them rather than trying to handle every single task would be the right approach.
Lisa Lang, the General Counsel at the Kentucky State University, also thinks that prioritizing is critical to time management:
“Everybody’s project can’t be an emergency. Now I use a form where I ask my clients where their drop-deadline is, so I could prioritize my work and still get everybody’s work done.”
10. Is It Important To Use Technology in Contract Drafting and Editing?
Technology can be a helping hand in contract drafting, as well as in the legal profession as a whole. It is really important to look for data integration solutions that combine different features and can help with different parts of the process. Contract lifecycle management systems can save incredible amounts of time, because they let you do anything in one system, relieving you from the need to jump from one place to another.
But before purchasing any technological solutions it is important to evaluate what technology you are using right now and if you use it at its full potential. For example, Google Suite and Microsoft Office tools can be extremely powerful on their own if utilized properly.
That’s it for now. If you want to dig deeper, watch the full video recording below.