Stephania is the founder at Passera Design and the co-founder of the Legal Design Alliance. She is also the inventor of the Legal Design Jam, a sought-after keynote speaker, trainer, and published author. She holds a doctoral degree from Aalto University, where her empirical dissertation focused on how visualization can improve contract user experience and foster better business relationships. During our time together we discussed how the use of diagrams, images, and visually structured layouts can make contracts more understandable and engaging for their day-to-day users, why following a user-centered approach is so important when it comes to contract design and so much more!
Episode transcript
Read the full transcript
Made with speech-to-text software, so a few words may be off.
0:00You're listening to the Contract Heroes podcast, your one-stop shop for all things contract management. And now here are your hosts, Marc and Pepe. Hello, everybody. This is a new episode in Contract Hero, the first time in person. Yeah. So we are at the World Commerce & Contracted Americas event at Phoenix with Marc and I. And our first guest, we have Stefania Passera. Uh, she's a contract designer visualization consultant at Passera Design. So Stefania, before we start talking about what you- you've been doing right now with- in your business, like, can you int- introduce yourself and talk us a little bit on your background? So hi, guys. Thanks for having me. Um, probably I'm also going to be the only designer on this podcast- Mm... today. Uh, by training, I'm an information designer. Then I took, um, a very multidisciplinary route in my career. I- I did a doctorate of science, writing my thesis on contracts. Oh, wow. Specifically on, on contract visualization, but I did so in a, in a department o- of organizational studies and industrial management.
1:13And how'd that happen? Like, why you decided to make it with, with contracts? Oh, that's a long story. Uh- You know how Steve Jobs says that you can only see your, your personal history looking backwards and connecting the, the points backwards. So i- in the end, it seems like everything made sense, but I think I've always been driven by just wanting to do interesting things, and bit quirky things, and curiosity. So when there would be something that would puzzle me, like why no one is doing this, and this thing makes sense, why no one is doing it, this, that would be my drive to do something. So, uh, 12, 13 years ago, I met Helena Hapio, who's, um, businessperson in the contract space, a c- contract coach, arbitrator, and also professor. And, uh, she, she's, she she's how I, I got into contracts, because she was saying, "Ah, I'm working with a graphic facilitator, uh, in my trainings, but I would like that the contracts themselves would be as engaging as when I do my trainings." And my reply was like, "That sounds like information design, and do you know why no one is doing it?"
2:23And that has become the, the question that led me i- into academia and doing research and figuring out, like, okay, can you actually visualize pieces of contracts? Can you actually use techniques from information design to make this, this content clearer? So one thing led to another. I accidentally did my PhD on this, and now for five years, uh, I've been working as a consultant and a designer, uh, in the space. Wow. That's, yeah, that's great. I mean, I, I think it's really something that's missing out there. It's a piece that not a lot of folks are doing or, or want to deal with. Uh, you know, when we work with folks, they, they kind of just bring those things to us, and they kind of assume that part of the CLM implementation is going to include that, and, and it definitely does not. Um, so, you know, it's, it's super interesting to hear that, that that's something that you're working on. And, and, you know, when you start working with folks, w- where, how do you kick things off? Do you, do you go through their, their current kind of contracts? What, what does that look like? So usually, um, how it works, I, I, I don't do cold calling. Usually clients come to me. Mm-hmm. I have a quite...
3:28I, I would say I have quite a good w- word, uh, like, how do you say? Word of mouth. Word of mouth- Right... game going on. That's right. That's referrals. And that, that- That's one. Yeah. And th- that's why, like today, I invest a lot of time on, on, on doing fun and engaging presentations, because that's the best marketing I have. Like, usually then, like after today, there's going to be someone saying, "Hey, that thing really resonated with us. We have this document that gives us a lot of problems. It's slow to negotiate. We hate it. People don't understand it. We cannot engage business." Th- there's usually some problems that end up in one of the same old, same old categories, uh, all known categories. And on the basis, you just, "Okay, show me the document and let's see what we can do together." Uh, usually they start from, from a pilot, so I, I think it's very rare. It, it never happened to me that a, a new client would come at me with a, with a suit of documents. Usually- Right... it's, um, a learning journey also for them to know, like, what are the...
4:29w- what is the potential of contract design? What, what does it do? So we do one project together, and usually from there, uh, things follow up. And how do they decide, like, when they start doing the pilot? Is, is, is this like, it depends on, like with the volume of those contracts, like NDAs perhaps? I mean, that's like a basic- Uh, not necessarily, uh, because the NDA is a, is a easy pick. Right. But what I recommend to clients is like, start from your real pain point. So, you know, it's always risk and r- reward. Of course, you don't want perhaps to start with your riskiest, uh, agreement. But at the same time, if you start piloting on a document that is potentially going to have zero impact on your bottom line or on the satisfaction of your counterparties or of your internal people, you're not gonna be able to really observe what contract design can do for you. So I usually w- very often with clients, I, I guide them, I, I try to ask them question of, "Okay, is there some document that you know you have pain points, people have been complaining, or it's slow to negotiate, or it's holding you back, or, you know, you have any reasons to know, certified reason to know that it's horrible for some reason, and let's start from there."
5:43Um, a typical pattern for clients that do more than one project is either start from, let's say, their simplest, uh, document, so for example, for high volume solutions, and then go on the other end of the spectrum and, and take their super customizable 200 pages master agreement. And usually when you map the very simple and standardized and the monster with all sort of options, you have enough learning to then- Even internally without, uh, uh, my help, then start creating all the variations in between. There's going to be a lot of learning, n- not only... I mean, for everyone involved really. Right. And, and how do you work? Because, I mean, we've been learning a lot, especially here in the World CC, about the contract simplification, right? Because the thing about contract templates is that most of the time only lawyers understand them, right?
6:41And a lot of the terms are, like, very legalese, but they don't put that much attention on the commercial side of the business, like the scope, you know, how, how are you going to get paid. Uh, do you see anything related on where do you put those clauses inside the contract? Or, or how do you handle those? So we are touching a a, a topic that is close to my heart, which is information architecture. Nice. Which means, uh, which is basically how you are ordering and naming topics in a, in, in a document, in a, in a piece of information, and that's quite important in contracts. You can... I, I think that to make an engagement, engaging contract, you cannot start with all the legal rules up front- Right... or 50 pages of definitions. You have to put crucial commercial informations up front, at least if, if we're talking about- Yeah... commercial contracts.
7:37So everyone, even the busy executive who's picking up the contract, can understand very quickly what's the beef, and what are the key variables in that agreement, and what is the reality, what, what is the real thing that we are talking about in these very abstract terms. There are some contracts that you may be reading, I don't know, 10 pages, and you still don't know what it is about. Mm-hmm. And those are... I find those very, very frustrating. Those are the one that I want to change and break and remake the most. Uh, so yeah, information architecture is really important and, uh, I, I have this rule of mine, like business first, like trying to put all the more operational stuff first, or depending on the document, it could even be, uh, relational clauses. But basically bringing everything that is not simply dry boiler plate to the fore, so people can understand what are we really doing here together. Right. And have you seen any kind of resistance from the legal side of the business when you start using, like, visuals inside the contract? Yes and no.
8:41I mean, contract design, I tend to, to think about it as a discipline, as a toolbox, and there's many things, many tools that you have in that toolbox. Some have to do with usability, some are, uh, graphic design, some are drafting, some are many other things. So some clients are very comfortable with, uh, using visuals. They, they know because we tell them that we're not going to arbitrarily take clauses out of your contract and put a pictogram- ... or put- Yeah... hieroglyphics. Usually, uh, it's like a textbook, like a science textbook. There's the text, and then there's a diagram- Mm-hmm... reinforcing and expanding, uh, and iterating those complex contr- uh, concepts in a slightly different way, so you are, uh, increases the chances that people are going to grasp those concepts. And I would say most of my clients are, uh, quite comfortable with trying that. In very rare instances, there are some people saying, "Oh, no. Perhaps we don't want to do that.
9:42We're okay with having a nice layout and dividers and, uh, good typography and so on, but diagrams or icons, mm, no, not really. It's not really us." And I mean, that's fine. There are many other things you can do. Um, you can still be all text. So I would say if your contracts are not, uh, excessively technical or excessively complex, if you have very good plain language, you can get away with it. In some other contracts where you have very complex mechanism or processes, I would not recommend that, but, you know, it's a choice. Ultimately, uh, it, it's up to my clients to make their own considerations in terms of risk management and tone of voice and where they are. I can only offer them the best options that I know are- Right... available from communication design. And, and s- how, how long does it usually take... How long does a pilot take with, with a customer to go through that process?
10:38I know it probably varies depending on the- It depends-... the volume of contracts... it depends, it depends on the, on the document because- Yeah... there are some documents, you know, short, let's say up to 5,000 words document, that you can even turn it around in one month. Mm-hmm. And there are some master service agreements that you're working on for six months. Wow. Um, not much because it takes u- it takes us time to rewrite or restructure it, but because when you send a draft, it's gonna give them ideas. Okay. And then they notice, "Ah, this thing doesn't make sense. We have to go and speak with, I don't know, Bob, uh, from this department to verify what we want to do with this." Mm-hmm. Because at the moment we realize that it didn't make sense. Thank you for making us realize that. Um, so you start changing the documents, but then it actually helps them to think, like, "Is this really how we want to run the business? Does this rule make sense? Are we actually doing this thing?" Or, "This thing is s- straight wrong. This is not what we're doing, so- Yeah... why should we have it there?" Um, often I'm working also with partners on trying to rebalance their contract.
11:43So even before simplifying, we try to have an analysis of what are you saying, and is this excessively protective and draconian, or are you actually starting from a balanced place. So in some cases we are collaborating with TermScout, who have a- Oh, nice... very good- Yeah... capability to tell you, okay, are you market or not- Yeah... and that for, uh, certain clients is incredibly valuable, and it actually helps them in their strategy and in their choice to say, "Okay, this and this and this should go. It doesn't make sense." Or in other cases, it's like, "Okay, uh, w- we want this, uh, this starting, the, the standard clauses, but we know that in 90% of cases we negotiate something else." It's like, "Okay, let's start from, with your backup plan." Because yeah, we can simplify the language, but then if there are other bottlenecks- Right... um, I mean, it, it really goes hand-in-hand. The rebalancing and the design, and also the automation, I would say, they're all different ways. And if you build one on top of the others, you're going to see, like, i- incredible t- uh, time savings and, uh, s- deal velocity. Right. And especially, like, I mean, now with events, we have a lot of CLMs, and when, when companies are looking for a CLM, they wanna talk about automation.
13:05But the thing is that it's very hard to automate complex contracts. So when you simplify them and put the commercial terms in a way that everybody can understand them, that they can just look for it, uh, maybe they're gonna have some conditions, some w- we call, like, dynamic clauses. But when they're simplified, it makes things way easier. You can get the data easier. You can, like, the post execution of the agreement, you'll, you know what- what's going to happen when, I don't know, somebody fails on their obligation on that contract. Because what we like to say is, like, contracts are the mammal of all the commercial relationship, either if, if you're on the buy side or in the sell side. And if you wanna keep that commercial relationship in, um, in, um, in peace, or not peace, but, but you know, like, uh, you, you want to have, like, long term with your customers and with your providers. And I think that having easy to understand contracts is, like, the basic of everything else. Yeah, definitely you can automate complex contracts, but I think you're going to work against yourself- Yeah...
14:06first because it's garbage in, garbage out. Mm-hmm. So you're going to produce more crap at scale. Yeah. Uh, and you're going to entrench it even more, because when you're doing a CLM im- implementation, then you don't want to change that. So I think that when you're about thinking, you know, upping your game and, uh, using automation, that's also the right moment to have a very hard, honest look at your contracts and ensure that they make sense. That, uh, you know, for example, boilerplate ac- across different- Yeah... documents is standardized. Because why, why do you need 70 different versions of the severance, I don't know, severability clause? Yeah. Or a jurisdiction clause? Like, j- just have one, and use it in all your contracts as much as it makes sense. Um, yeah, you, you were correct. Having complex contracts, it makes it more difficult when you're doing automation. Uh, in my opinion, you cannot do self-service contracts if they're not absolutely clear and- Yeah...
15:06uh, user-centric for, for the sales personnel. They have to be documents that they can pick up and run with it. They have to feel confident in negotiating, uh, even without the legal department. And you're not going to achieve that purely through automation. Right. A- actually, it's going to work against your automation efforts if the document is a hot mess. Correct. And they will be confident that they will not represent a legal risk to take their own decision when they understand what is saying on the contract. Yeah, even on a meta level to know, like, okay, what is this document about, or how do I even answer this questionnaire to make sure that I get the right template that is the right, right point. Sometime the, uh, the contract literacy is so low that even that, even that meta cognition about contracts, that meta understanding of, okay, what, what is the right form, uh, is missing. We know from research here at World CC that, uh, uh, that, that there's a scary high percentage of contracts that are based on the wrong forms. Yep. Like, they start from the wrong template.
16:11And Stefania, how long does it take once you work on a contract with a customer for them to really see the value? Is it the first time that they start to work with that new contract with a customer that they can already kind of see that things are happening faster and, and agreements are getting, getting signed quicker? It depends how, how they're measuring. Uh, I, I say that this is, um... How to say? This is a pain point. Because often with clients, even when, when, when I go in, I ask them, "Okay, what is your... What, where's your data? Do you know what's your average time to close a deal, or..." "Uh, no, we don't know because we don't track." Right. Like, okay. Uh, what's your guesstimate, at least, with a finger up in the air? So in, in some cases also, the- they're measuring if they don't have a system in the, in, in the back, it's going to be a finger up in the air. But you know, they may have other systems like Salesforce and so on. So in as little as three months or a quarter, their VP of sales may be able, if we're talking about sales contracts, to see a difference. Uh, there was this case with a, with a client, um, Ecovadis. I can mention them.
17:16They were really happy- ... to go on the record with this thing. Um, they managed to slash down their, uh, their time to signa- signature by 50%. Wow. That's a lot. They said... Yeah. That's gonna help. They managed to... Yeah. They managed to increase the chances of starting the negotiation on their own term from one in 10 engagements to 50/50. Wow. So plus f- 40%. And that was a very, um, sore point for them. They were saying, "Well, when we're, we're quite a straightforward SaaS solution, when we are hit back by a master service agreement that has nothing to do, it doesn't really depict reality, it takes us forever to negotiate it, and it doesn't, and still doesn't make sense." And actually, when the clients with this new simpler agreement, they realize that, okay, actually this solution is not that risky. Oh, there's a nice simple description of what it does, what it is upfront. So n- now we understand that it's not risky, so we're gonna look at the legal terms with a bit different perspective. Mm-hmm. It actually helped them, uh, going faster.
18:19Uh, VP of sales also said that it helped him incredibly to To forecast deal closures and know when revenue was coming in. Before, he said he didn't have this ability because it was too unpredictable. But then when contracts start working, they start to be more predictable. You know when the cash is gonna come in, and it really helped them growing, for example, in the US market. And then they, they liked so much this pilot because it was really a quick and dirty pilot that they started translating this new agreement in German, French, Japanese, and they started using it globally. But they tested... They were quite brave because I think they tested it in the US. That was their, uh, um, most difficult market for a variety of reasons contractually. And when they said that it was working, they noticed that it was working there, they just rolled it out globally.
19:11That's very interesting because they can use, like, the same template in different jurisdictions and, uh, and still works. Yeah. That makes a lot of sense. You, you, you know, there's usually some small tweaks that you may have to do. Yeah, of course. But, um, you know, I've been working a lot with Paula Doyle, um, on this type of contracts. And Paula in, uh, her previous stages of her career, she w- she worked at IBM. She was leading the cloud function for Europe, so she's quite used in working in a, you know, demanding international settings. And she was saying, "Well, actually also the issue of localization, you, you can do most of business almost everywhere with the same terms. You may have to do small tweaks, but it's not even true that you have to localize them- Right... that much. If you do... I- if you make contracts that make sense and they're simple and they just have what they contain, then it's actually easier to add or take away what you need for a certain jurisdiction. Well, that's amazing.
20:11And Stefania, I really, we really appreciate it. It's been a topic that we've been willing to talk about. Yeah. But I think, like, one of the main reason we created the podcast is so we can ask things we don't know from the experts. So we really appreciate your time. And if people would like to contact you, what would be, like, the best way? Oh, just Google me up or LinkedIn. Awesome. We're gonna put the link- There's not, there's not that many Stefania Passarin contracts. Oh, there you go. Very true. Very true. Easy to find me. All right, Stefania. Well, this has been great. Thanks so much. Thanks for having me. Yeah. Bye. Ciao.