If business and project managers see contracts as a necessary evil and sources of excessive bureaucracy, they will look for ways around contracts. If they see contracts merely as legal tools and as tools for self-defense in conflict situations, they will overlook opportunities to use contracts as risk management tools or enablers of successful project implementation. Many current perceptions are not helpful for using contracts successfully. Contract visualization is a tool that can overcome these perceptions by simplifying and demystifying contracts.


Diagrams and visual tools are frequently used in project and risk management, quality control, systems engineering, reliability engineering, and operations management to convey complex messages and help people understand them. Why not extend the method to contracts and contracting? Why not use visualization—images, charts, diagrams, timelines, and so on—to communicate contract-related messages? Why not be even a bit more playful when communicating them? The Contract Elephant depicted below (Figure 6.4) and the Hand TooI a little later in this chapter (Figure 6.5) offer a good starting point.

Figure 6.4 illustrates the different lenses through which different professionals may view contracts. it is based on the tale of the blind men and an elephant that is often used to illustrate a range of different "truths” and the relativism of truth. While there are many versions of the tale, the basic storyline is about a group of blind men who touch an elephant to learn what it is like. Each of them feels a different part, but only one part. When telling the others what an elephant is like they soon learn that they do not agree. The stories differ in how the conflict is resolved. What the story tells us is that it is important to learn that our own experience may not represent the whole truth and that we must show respect for different perspectives and communicate and collaborate to understand the full picture, in this case, the full (contract) elephant.

The contract elephant

Figure 6.4 The contract elephant

Ideally, each professional working with contracts recognizes or at least is familiar with the other perspectives or lenses. Yet that is seldom the case. The typical "lawyer's lens” may focus on worst case scenarios, liability exposure, and how the contract will be used as evidence (and provide winning arguments) in court. This focus will then lead to the lawyer drafting documents that in the eyes of business folks are a necessary evil, a nuisance that gets in the way of doing business.

A visual approach to contracts has the potential to change the picture. Visualization offers a way to build a bridge between business and legal needs and to enhance communication among managers, engineers, and their legal advisors. It can enhance managerial-legal decision making and help combine various perspectives. Using images can make it easier to communicate and "sell” contracts, internally and externally— and easier for everyone involved to understand and to translate contracts into desired action and outcomes.[1] Flowcharts, timelines, and mind maps can help evaluate a proposed transaction or relationship (or network of transactions and relationships), assess its risks and opportunities, and co-create tools to control them in new ways.

Project management was one of the early adapters of visualization. The book Visualizing Project Management[2] (already in its third edition) illustrates that complex systems do not require complex project management and that visualization is a powerful technique for achieving high performance.

Knowledge visualization in the context of risk management is not new either. At the University of St.Gallen Institute for Media and Communications Management, research findings related to risk communication and communication of knowledge between experts and decision makers illustrate the benefits—and also the risks—related to visualization in contexts where interaction and cross-communication are required when each stakeholder only has a fragmented understanding of the issues involved.[3]

Other business professionals use visuals to present their thoughts and ideas. Business development managers use proposal graphics to illustrate and sell ideas.[4] Product and service development professionals and project managers use process flow diagrams and swim lanes to visualize business processes that involve more than one department (for example, customer, sales, contracts, legal, and fulfillment) to clarify the sequence of events and how information or material passes between sub-processes. Swim lanes can be used to illustrate the steps and who is responsible for each one, as well as how delays and mistakes are most likely to occur.[5]

Visualization was also incorporated into research related to legal risks conducted at the university of oslo Faculty of Law. In a case study, a group of lawyers, managers, and engineers were asked to analyze the risks related to a contract proposal using a method based on graphical language and diagrams.[6] The case study showed that graphical language is helpful in communicating risk among the participants. The non-lawyers in particular were enthusiastic about the use of the graphical models. Without these models, many of them found the contract documents difficult to understand and difficult to relate to their business perspective. The graphical models helped them to assess the impact of the contract clauses.[7] However, the need for simplicity and usability revealed some limitations and the need for a combination of graphical and natural language for improved decision making. The research also confirms that one challenge for contractual risk management is to integrate the traditional legal risk handling perspective with the risk management approaches in other disciplines.[8]

  • [1] See, for example, Finnegan, M. and Haapio, H. (2012) Communicatingcontracts in split seconds: using visual tools to make leadership pay attention. ContractManagement, July, 26-43, available at http://www.ncmahq.org/files/Articles/CM0712%20-%2026-43.pdf, and Passera, S. and Haapio H. (2011) User-centered contract design: newdirections in the quest for simpler contracting. In R.F. Henschel (Ed.), Proceedings of the2011 IACCM Academic Symposium for Contract and Commercial Management, Tempe (AZ),USA, 26 October 2011. Ridgefield, CT: The International Association for Contract andCommercial Management, pp. 80-97, available at http://www.iaccm.com/admin/docs/docs/HH_Paper.pdf.
  • [2] Forsberg, K., Mooz, H. and Cotterman, H. (2005) Visualizing Project Management,3rd edn. Hoboken, NJ: John Wiley & Sons Ltd.
  • [3] See Eppler, M.J. (2004) Knowledge Communication Problems between Experts andManagers. An Analysis of Knowledge Transfer in Decision Processes. Paper # 1/2004, May2004, available at http://doc.rero.ch/lm.php?url=1000,42,6,20051020101029-UL/1_wpca0401.pdf, and eppler, M.J. and Aeschimann, M. (2008) Envisioning Risk. A SystematicFramework for Risk Visualization in Risk Management and Communication. iCA WorkingPaper 5/2008, and other resources available at uSi HSG Knowledge Communication—Publications at http://www.knowledge-communication.org/publications.html.
  • [4] See, for example, Newman, L. (2011) Shipley Proposal Guide, 4th edn. Kaysville,UT: Shipley Associates, pp. 70-79.
  • [5] For an example, see the Wikipedia entry Swim lane, available at http://en.wikipedia.org/wiki/Swim_lane.
  • [6] Mahler 2010, pp. 237-62. The case study was carried out for a corporation thatsupplies production goods to a manufacturer. The risk assessment team consisted ofseveral lawyers, a financial expert, and two technical experts, as well as three businessmanagers. The team analyzed the risks related to the STCs of one of the corporation'scustomers in the context of a major long-term production contract. The assessment wascarried out in order to draft a contracting policy for future contract negotiations.
  • [7] Mahler 2010, p. 252.
  • [8] Mahler 2010, pp. 75 and 261-2. See also Mahler, T. (2008) The state of the art ofcontractual risk management methodologies. In H. Haapio (Ed.), A Proactive Approach toContracting and Law. Turku: Turku University of Applied Sciences, pp. 57-74.
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