Red Robin International and Bryan Cave Partnering to Create a Holistic, Streamlined Contracting Process
Red Robin’s hamburgers may be YUMMM, but when Senior Vice President and Chief Legal Officer Michael Kaplan joined the Colorado company in 2013, he found a contracting process that was less than delectable. In fact, it was downright unappealing, lacking defined processes, clear guidelines, a centralized storage repository, or trackable metrics.
Michael Kaplan, Shaun Bovaird,
Sarah Mussetter, Kevin Fischer
“I realized that attacking different parts of the contracting process individually hadn’t realized the results that I wanted,” Kaplan says. “I wanted a more holistic approach from intake through termination or renewal—the entire contract lifecycle.”
In fact, Kaplan realized, he really needed to start before intake, deciding which contracts should be reviewed by Legal. Concluding it should be “all of them,” he then sought a way to handle the process efficiently without becoming overwhelmed by volume. Having worked with Kevin Fischer at Bryan Cave in a previous role, he knew that the firm had done a lot of the pieces of the contract management lifecycle for other clients and would be open to a flat-fee arrangement that would bring Red Robin budget predictability for the work. Together, Red Robin and Bryan Cave designed the risk-based triage approach that represented the first step in the comprehensive new process.
Simultaneously, the team determined that Red Robin should better define its requirements, create more detailed Statements of Work (SOW), and utilize SOWs earlier. They defined a list of questions business stakeholders should ask to create a complete SOW:
- What is the business goal?
- What is Red Robin buying?
- What are the principal risks, and who is responsible for managing those risks?
- How much will the services cost?
- How will Red Robin pay for the services?
- What is the timeline for completing the project or rolling out the new services?
- Who is drafting the SOW?
Bryan Cave conducted training seminars for IT and other key constituencies, sharing best practices to obtain preferred contract terms, prevent value leakage, and manage contracts throughout the lifecycle. They created such self-help tools as a contract playbook and a clause library that gave clear guidance on good, better, and best contract terms.
“We looked at areas such as technical contracts and large implementation contracts that were challenging and needed improvement, and sought to help people create contracts that were more specific and enforceable and held vendors accountable,” says Kaplan.
The team sought to drive consistency throughout the new process by leveraging technology. The Bryan Cave client technology group, working in concert with the firm’s practice economics group, built a comprehensive contract management system (CMS). Their goal, says Fischer, was to answer the question, “How do you corral this process that can be very unwieldy, with a structure that reflects Red Robin’s priorities, and ensures that all of the parameters are met?” The CMS automates various aspects of the contract intake, review, and approval process; it tracks status, monitors key provisions and deadlines, and captures a variety of metrics. The system also generates alerts prior to contract expiration so that the renewal negotiation process can be initiated in a timely fashion.
An area of frequent misunderstanding in the prior state was around which departments needed to approve a contract, and which executives had the authority to sign them. The new CMS automatically generates a “green sheet” that summarizes the contract and defines the required approvals based on size, type, and duration. Now, Kaplan says, “Everyone knows to ask for a green sheet before signing new contracts. The business units like the clarity of the new system, and it allows departments to plan early for collaboration with other departments.” The changes were managed internally through early and frequent communication, says Kaplan, who presented the need and the timeline to the executive team at the end of 2014. The Red Robin–Bryan Cave team developed a new contracts policy and process map, then identified leads for every business unit who acted as champions for the change. After a pilot implementation revealed some opportunities for improvement, the introduction of the new system was smoothed for a comprehensive rollout supported by a formal communications plan.
- Red Robin has garnered several positive outcomes as a result of the transformation, including:
- Improved timeliness: 90 percent of contracts now delivered on time
- Reduced risk: 100 percent of high-impact contracts are approved via the new process
- Increased predictability: 97 percent of contracts now adhere to the standard review process, and adoption of the good/better/best clauses is at 80 percent<
- Enhanced legal department reputation internally.
Since the implementation of the system, Red Robin has bundled the majority of its non-litigation work as a portfolio and selected Bryan Cave as its single provider under a value-based flat fee. Does this represent a forward step in the evolution of the way companies work with their outside law firms? Absolutely, says Fischer. “It is a true partnership model. We have tried to find a way to add value beyond just doing great legal work.”
“Increasingly legal departments like ours are looking to legal providers for solutions to broader business problems, taking more of a product and implementation approach rather than simply providing legal advice on individual matters,” says Kaplan.