1. Value Champion Series: Innovative Collaboration Models
Red Robin’s Contract Process Initiative

2. Problem Statement
Red Robin’s contracts process was causing various pain points:
Lack of standards for key contractual terms
resulting in less favorable terms, higher risk (legal and business), and longer contract review cycle times
Lack of well-defined contract review process
Confusion (who, what, when?)
Inconsistency - Legal and finance team only included in review of some contracts
Significant $$ spending not tied to a contract at all
No visibility into where a contract is in the process
Lack of tools to facilitate post-signing contract administration
No centralized contracts repository
Contract milestone management challenging (renewal, termination, etc)
Inconsistent management of contractual compliance by vendors

3. Project Scope Scope of Contracts Process Initiative
Entire lifecycle – draft, review/negotiate, signature, storage, amendment, renewal, termination
However, initial focus was on establishing process from intake through signature
Standardizing clauses and templates and improving efficiency of legal review
Later moved on to technology tools for contracts intake portal, contract storage and lifecycle milestone alerts

4. Project Methodology Identify and Segment Contracts Landscape
Improve Efficiency of Legal Review
Define and Communicate Contracts Process
Create training and self-service tools for clients
Use technology to manage contract lifecycle
Project Methodology
Identify and segment contracts landscape
score contract types by impact on business and risk
Streamline contracts review process
Tailor legal staffing models to contract volume, complexity, and required TATs
Create ‘good,’ ‘better,’ ‘best’ contract clauses to provide a pre-approved range of standard “fall back” options
Create contract review policy that:
reflects new process,
assigns clear ownership and governance
Provides escalation path where needed
Communicate the “Why” and the “WIIFM” to secure Exec Team and internal client buy-in
Create contract templates for ‘contracts leads’ in business functions
Pre-approved “good, better, best” clauses
Training – intake process, use of templates, writing SOWs, red-flag issues and escalation
Implement contract management system:
Contract storage and search
Contract milestone alert notifications
Automate review and approval workflow
Monitor policy compliance

5. Identify and segment contracts landscape
Higher
Risk/Value
Unique/Specialized
Strategic
Expertise, Complex
Competitive Advantage
Examples
Examples ■
Third party benefits agreements ■
Food supply agreements
Master agreements (software ■
IT outsourcing agreements
Senior ■
Lawyers
licenses; credit card agreements) ■
M&A agreements ■
Larger procurement agreements
Lawyers
and Paralegals
Business Units Submit Requests
Contract
Intake
Specialist
Paralegals and
Not Business Critical
Essential to Business…
Contract Leads
Ordinary Course
but Routine
Examples
Examples ■
Service agreements for restaurants ■
Real Estate Leases
Contract Leads
(Music, DirecTV, Preventive Maintenance) ■
Franchise agreements ■
Supply agreements (lower-value ■
Marketing agreements
agreements) ■
Non-disclosure agreements
Lower
Risk/Value
Non-Core
Core
Nature
Core = Matters that directly
impact business strategy.
Tailored contracts review staffing model to risk and impact on business

6. Volume of Contracts Drafted / Reviewed
Improve efficiency of legal review: Defining staffing model
Lawyers
Contract Intake
Specialist
Business Units Submit Requests
High
Value/Risk
Volume of Contracts Drafted / Reviewed
Low
Manage high-risk and
matter.
Manage complex,
sophisticated, and
high-value contracts.
Review routine and
ordinary course
commercial contracts.
Reviews intake submissions
for completeness and
assigns contracts to the
for review
Contract Leads
and Paralegals
high-value contracts, often
Senior
specific to a given subject
and Paralegals

7. Communicate the new Contracts Process Lessons learned the hard way
Need Executive Team and internal client buy-in
Explain the “Why”
Focus on the pain points for your internal clients rather than those of the legal dept
Explain “What’s in it for me” (WIIFM)
Explain how the new process will solve their pain points
Anticipate their concerns with the new process and address them proactively
Process is designed to improve efficiency of legal review
Process recognizes that not all contracts pose the same risk and require the same level of scrutiny
Make compliance easy

8. Explain the Why - Sample
No Clarity
Confusion about what a contract is and when there should be one
No Consistency
Many of our contracts contain unfavorable and inconsistent terms, leading to higher risk for the Company
No Approval Record
Inconsistent approvals process at best, no record of approvals
No Background
Signatory has no background about review & approval process when presented w/ K to sign
No Repository
Not sure where to go when need to put hands on contract, inconsistent between departments, final executed version not always gets to legal

9. Explain the WIIFM - Samples
No Clarity
Confusion about what a contract is and when there should be one
No Consistency
Many of our contracts contain unfavorable and inconsistent terms, leading to higher risk for the Company
No Approval Record
Inconsistent approvals process at best, no record of approvals
No Background
Signatory has no background about review & approval process when presented w/ K to sign
No Repository
Not sure where to go when need to put hands on contract, inconsistent between departments, final executed version not always gets to legal

10. Communicate the New Contracts Process - Sample
No Clarity
Confusion about what a contract is and when there should be one
No Consistency
Many of our contracts contain unfavorable and inconsistent terms, leading to higher risk for the Company
No Approval Record
Inconsistent approvals process at best, no record of approvals
No Background
Signatory has no background about review & approval process when presented w/ K to sign
No Repository
Not sure where to go when need to put hands on contract, inconsistent between departments, final executed version not always gets to legal

11. Training and Self-Service Tools: Making the Process easier to follow
Contracts management portal – designed and created by Bryan Cave
Automated contract intake process
Automatically reminds the internal client of the required dept approvals and authorized signatories (based on dollar amount, subject matter, duration)
Tracks status of the contract throughout the review process
Generates “green sheet” when contract is ready for signature;
documents receipt of required dept approvals
highlights significant deviations from our standard contract terms
Centralized contracts repository
Tracks and reports KPIs (e.g. contract volume, cycle times, on-time performance)
Self Service Tools for internal clients
Contract templates for routine, repeatable contracts
Checklists
Training for internal clients
Contracts process
Use of portal, templates, checklists, SOWs

12. APPENDIX

13. Final filed in Repository
Sample Contracts Review Process Map
Contract Management Lifecycle
Submit a request
Client needs Is
Send to other side
for contract
to make
Client
Start
additional No
/ negotiations
End
review/write
modifications/
information
needed?
(Bus/Legal
contract
re-submit
involvement) No
Distribute request Is
Level
Yes
to appropriate
based on
Yes
Final filed in Repository
Intake
Request received
information
complete?
level based on
matrix/
matrix/distribution
distribution
tree.
tree
Review
Review/
Is third
Return
Additional
Legal
Standard
Process
Review
Review
party or
Mark-up
Contract Lead /
Paralegal/
mark-
request
information
sign-
Execution
request
or write?
escalation
contract up
needed?
to client
needed o ff
Write No
Yes
Provide input
Lawyer
Review
and return to
request
requestor
and/or
Provide input
Senior
Lawyer
Review
and return to
request
requestor
and/or
Contract Lead / Paralegal—
Escalate
to ET
Provide input
Ordinary, Simple, and Forms
and return to
Lawyer—
Complex, Higher Value/Risk
requestor
Senior Lawyer—
Strategic, Highly
Complex, Expertise
STRUCTURE
PROCESS
TOOLS

14. Sample Project Plan Project Milestones Complete Date Status Comments
Assess the contracts landscape
12/31/14
Complete
Identify, score and segment contracts by impact, risk and core/non-core.
Define contracts intake and handling process
3/31/15
On Track
Define responsibilities for contract intake and contract drafting, review, negotiation, approval, and escalation. Present to ET Mar. 16
Establish standards for commercial contract terms
4/30/15
Standardize clauses for key terms; create ‘good,’ ‘better,’ ‘best’ contract clauses to provide a pre-approved range of standard options for inclusion in agreements.
Create and communicate contracts review policy
Needs Attention
Create concise contracts review policy that reflects established process and assigns clear ownership and responsibilities. Create intake form.
Create agreement templates and self-service tools
Summer 2015
Create agreement templates and review checklists to enable delegation to paralegals and ‘power users’ in business functions. Will define a roll-out schedule for template creation.
Contracts Training for contracts leads within the business functions
Train ‘power users’ in the business functions on the contracts review policy, the process, and (where appropriate) negotiation skills and the use of the templates, checklists and standard clause options.
Conduct Periodic Reviews
6 month intervals
Determine whether need to update policy, templates or standard clause options based on changes in business conditions, risk tolerance, internal client preferences; Audit policy compliance