In an age of fast-growing complexity, the winners are those who simplify the lives of others.
As part of its mission to promote ease of doing business for social and economic benefit, World Commerce & Contracting has long been a vocal advocate for simpler, user-centered contracts. But what does good contract design look like, in practice? And how do you make a compelling business case for it in your organization?
I caught up with Stefania Passera, contract designer in residence, and Paula Doyle, chief legal innovation officer — the leading ladies behind WorldCC’s design and simplification initiatives — to discuss their most recent initiatives.
Olga Mack: So, I hear you love contracts. How did this happen to you?
Stefania Passera: I don’t actually love contracts per se, but I love the challenge of transforming them into something clear, useful, and engaging for all stakeholders. I love seeing business people look at contracts with new eyes and understand them for the first time! I love seeing lawyers realizing that they don’t need contracts to be full of legalese for it to be binding and that sticking in everything, including the kitchen sink just in case, is not actually good risk management. My background is in information design, which is the art and science of making complex information usable and understandable. There is a lot of work to be done in the world of contracts!
Paula Doyle: I completely agree with all that Stefania has said. I have been a lawyer in industry for more than 20 years. Frankly, I am bewildered, given all of the other advances in the world during that time period, that contracts remained largely static up until about 5 years ago! Contracts are in essence instruments to help organizations and individuals get things done. At their core they should be understandable. They should not be the domain of only lawyers!
OM: When was the first time you realized that contracts are broken?
SP: Like most people in the world, as a “nonlawyer” and a consumer, I always tried to avoid contracts and thought of them as a necessary evil, something best left inside a drawer. My realization was that contracts don’t need to be necessarily dysfunctional by nature — we can make them work better for all the parties involved.
PD: Well, while working as a lawyer in industry I often became very bored reading long contracts. I remember thinking many times: “Do they really need to be this long and complex?” While at IBM, I did some communications training with the ex European General Counsel. It was focused on memos and emails. It was the first time I had seen such a strong focus on the reader/user. The training was excellent, and we managed to boil pages of information down into a few paragraphs of “need to know” information for senior company executives. I was already a fan of plain English and shorter sentences so the leap of applying this approach to contract was an easy one to take.
OM: What is WorldCC and how did you get involved?
Paula: World Commerce & Contracting is a not-for-profit association promoting standards and raising capabilities in contracting and commercial practices. We provide a home for a diverse community of commercial and contract professionals in addition to procurement personnel, legal practitioners, CEOs, CFOs, anyone really who is interested in better contracting and trading relationships.
I first met Sally, the CEO, and Tim, the president, when I headed up the European Cloud legal team at IBM. They inspired me and I agreed to help them develop the As-a-Service Contracting Principles. I had so much fun and felt that what WorldCC was making [was] a difference. I then jumped at the chance to join them when they suggested it!
SP: I have been attending WorldCC conferences and been a member for the past 10-plus years. The association has always supported my ideas and even helped me carry out part of my doctoral research. From there, we started collaborating more and more closely on a variety of projects, including the Contract Design Pattern Library, bespoke design projects for our corporate members, and the Better Contract Design Mark.
OM: Let’s talk about Better Contract Design Mark. What is it?
Stefania: The Better Contract Design Mark is a recognition for contracts that are designed to be user-friendly, clear, inclusive, and good for business. We want to support all organizations going above and beyond what is the current “norm” for contracts, and we want to give them visibility. We thought that a certified mark would embolden the innovators and inspire others to follow suit so as not to miss out!
OM: What is it not?
SP: Contract design is not just adding a handful of icons and making a contract look pretty. It’s not about putting a thin layer of make-up on contracts without challenging their status quo. “Design” is a wide umbrella, it includes all the deliberate, strategic decisions you can take to make a contract easier for all stakeholders to use: how you write, how you structure and organize the content, what you leave out, what you put in, how you leverage good document design, visual communication, and UX to make the content understandable and relevant.
OM: Accreditation and evaluation — that requires dedication and a lot of work. What is the plan?
PD: Currently, we are actively seeking out those organizations leading the way with their contract design practices, as well as accepting lots of applications. The goal is to give this recognition to as many organizations as possible and demonstrate the “art of the possible” to the rest of the world. We award the Mark at three different levels to motivate organizations to continuously improve and be ambitious!
With the help of The Simplification Centre, we have developed 13 criteria to objectively assess every Better Contract Design candidate. We also assembled a review board of experts from all over the world to ensure that all reviews are conducted by nonbiased experts.
OM: I have to ask you, what is the best contract you have ever seen, whether created by you or anyone else?
PD: Well, there are a number, so it is hard to choose. We have worked extensively with Shell to transform their contracts and are still on that journey with them, transforming one contract at a time. Their redesigned templates, in addition to being more engaging for all relevant stakeholders, spoke volumes about a brand that is listening to customers and suppliers and wants to create a more collaborative brand. All very important elements to embrace if you really want to be ahead of the pack with contract innovation.
Another exciting project is our most recent one, with U.K. fintech startup Shrap. We created online terms that go out of their way to communicate simply and build trust with consumers, while offering a great, on-brand mobile user experience. We tested them extensively with consumers and shopkeepers, and we are very thrilled to see them finally go live in the next few weeks!
SP: I’d also like to mention a project where we were able to create a big impact with relatively simple interventions — just to make a point that a successful contract design project does not need to be huge and complicated. “Best” is the enemy of “done” — that’s why we always stress the idea of continuously getting “better” instead!
We redesigned and simplified the service agreement for ESG ratings provider EcoVadis. Their U.S. customers typically refused to use EcoVadis’ very traditional legal agreement — 3-columns full of legalese. This resulted in lengthy, unpredictable negotiations, three times longer than their global average.
We helped EcoVadis by modularizing the contract and putting all business terms up front. The new design made it easy to explain the very limited risks associated with the service and to persuade clients’ lawyers not to insist on unreasonable terms. With little training, this clarity has allowed EcoVadis salespeople to be self-sufficient in negotiations.
The results were dramatic: 50% more deals signed on EcoVadis’ papers, reduced negotiation time by 50%, reduced redlines by 60%, resulting in much faster time to revenue. Needless to say, EcoVadis started using the same approach globally!
OM: Five years from now when you look back on the work you did with Better Contract Design Mark, what have you achieved? What does success look like?
Stefania: Personally, I’d like to see user-centered, clear contracts becoming more mainstream, especially for consumer contracts or online terms. I’d love to encounter the Better Contract Design Mark “out in the wild,” shown with pride, for example, on utilities, banking, or insurance contracts.
OM: If I am an in-house lawyer what is one thing I can do today to improve our relationship with contracts?
PD: You should review your templates immediately with a “user” hat on. Talk to your internal users and find out the common pain points when dealing with external users. Try to be part of a mind shift that allows your business to use your templates as business tools. Contracts need to be understandable if you want effective engagement. Knock off some low-hanging fruit quickly and be brave!
If you want to learn more and add some practical tools to your contracting toolbox, join us on November 17 for our contract design workshops, available in two time zones (registrations are open for EMEA/Americas as well as APAC).
Olga V. Mack is the CEO of Parley Pro, a next-generation contract management company that has pioneered online negotiation technology. Olga embraces legal innovation and had dedicated her career to improving and shaping the future of law. She is convinced that the legal profession will emerge even stronger, more resilient, and more inclusive than before by embracing technology. Olga is also an award-winning general counsel, operations professional, startup advisor, public speaker, adjunct professor, and entrepreneur. She founded the Women Serve on Boards movement that advocates for women to participate on corporate boards of Fortune 500 companies. She authored Get on Board: Earning Your Ticket to a Corporate Board Seat and Fundamentals of Smart Contract Security. You can follow Olga on Twitter @olgavmack.