It’s in a company’s best interest to shorten the sales cycle, close deals quickly, and make room for more deals and more revenue. This, along with reaching quota and commission, is the ultimate goal for a salesperson.
The salesperson is in control of the contract through most of the sales cycle. It’s their responsibility to usher the contract through each step of the contract lifecycle. So you can imagine things can get tense when Sales needs to hand the contract off to another stakeholder, like Legal, for contract reviews. Contract reviews will take all the time that is necessary to identify risks in a contract, but this time-frame can derail a salesperson’s plans to close the deal.
When it comes to the immediate goals in the contract process, Sales and Legal might already be at odds. While time is a huge factor for the salesperson, the lawyer needs to take time to identify every risk within a contract. The result of these conflicting goals is that Sales will take the time to ‘check in’ with Legal during reviews. Unfortunately, this does not speed up the review process, and only distracts Legal from the review.
The truth is, you cannot sacrifice the quality of a review to get it done faster. Contract risks can involve typos, human errors and ‘loose’ terms that can be interpreted broadly and lead to broken terms and ultimately less revenue from the contract.
Traditional contract review tools, while familiar and easy to use, could act as a divider between Sales and Legal teams, rather than encouraging collaboration. These tools include:
Email - Emailing contract edits can quickly become a complex and risky process. Each time a contract is emailed, a new version is being introduced to the workflow, making it easy to accidentally use the wrong contract. Also, it’s difficult to explain complex edits through an email, and messages can be misinterpreted, which can contract terms at risk.
Document Generators (Microsoft Word) - A recent SpringCM survey revealed that 74% of contract redlines are done with Microsoft Word. While this tool is familiar to most people and easy to use, the only way it encourages collaboration is through ‘tracking changes’ and still requires the document to be saved, emailed and downloaded.
Getting Sales and Legal on the same page starts with eliminating the extra tools and expanding access to the same contract data. Here are 3 ways communication can be improved in the contract review stage:
Clarity should be at the front of mind during contract reviews. If there is a complex edit, or concern over a specific term, the best practice is to get on the phone with the other party. Verbal communication (although rare, provided everyone’s availability) is the best way to ensure both parties are on the same page.
In the interest of time, phone calls should be made sparingly and only when there’s confusion or a need to clarify with the other party.
It’s common for salespeople to work out of a customer relationship manager (CRM) where all the customer data is stored. While Sales is licensed to access the CRM, Legal typically does not have that license. However, a tool that integrates with a CRM can expand visibility into the contract for Legal during contract reviews.
A non-native application is capable of pulling data from the CRM, but not living completely within its walls. This means non-licensed teams like Legal can see the contract and work on it without the company needing to buy more licenses.
According to Aberdeen group, 60% of companies who’ve ‘expanded’ their CRM actively promote cross-functional sales collaboration.
Neither Sales nor Legal should be sifting through file cabinets, desktops or shared drives in order to find the right contract. Establishing one place to store the one and only version of that contract can keep both teams on the same page and lead to risks down the road.
Editing the contract from within that central repository not only eliminates the need to email contract changes, but sales teams can check on the contract at any time, without distracting the lawyer.
Even while working in a central repository, legal teams can keep using the tools they’re used to, while not adding extra steps to the process. If a lawyer uses Microsoft Word to redline contracts, the best contract management tool would allow Legal to work in Word, but embed a window into the contract central repository where all the contract data can be accessed.
These 3 simple steps can get Sales and Legal on the same page and accelerate the review process. You can learn more about how to improve the relationship between Sales and Legal and get them working towards the same goal of bringing in more revenue with less risk. Download our SlideShare, Relationship Therapy: Sales, Legal, and Contracts.