📈 5 Key Takeaways: Commercial Contracting - Doing More With Less
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Speed and accuracy make strange bedfellows but, when it comes to commercial contracting, you have to find a way to do both. This is especially difficult when every department but legal is scaling fast (sigh). If you don’t have an army of contract lawyers, you can still stay speedy without letting anything fall through the cracks. How you ask? We got all the answers to that question and more at our latest event which was moderated by the Founder and CEO of How to Contract, Laura Frederick.
Contracting wizards Jasmine Singh, General Counsel at Binti, Jonathan Franz, Associate General Counsel (Head of Legal) at Crunchbase, Hayley Gonzales, Director, Commercial Counsel at Affirm, and Mike Molina, Vice President, Legal and Deputy General Counsel at Flock Safety, shared their hacks for doing more with less.
ICYMI, here are our top 5 takeaways.
🏋️ Set the bar high
In an ideal, super-risk-resistant world, every contract would be reviewed by the legal department, but that’s not always an option. Luckily, it’s also not necessary. Doing more with less is all about prioritization. Step one is to set a legal review threshold. Figure out which contracts score high on both riskiness and the likelihood of that risk actually happening. These are the contracts that legal needs eyes on. Or you could choose only to review contracts that are above a certain monetary value.
Everything else? You have to empower your business stakeholders (e.g. sales, marketing, procurement) to take care of as many contracts as possible on their own. If letting things go unchecked makes you feel a little queasy, remember that you can use training, automation, and well-crafted templates to create guardrails that keep stakeholders on the straight and narrow.
The review threshold shouldn’t be set in stone. If sales are booming and contracts are pouring in but legal’s budget hasn’t changed, the bar will have to get a little higher. If there’s money for a few extra contractors, maybe it drops.
Lastly, you can’t sweat the small stuff. Rumor has it there are a few A-type personalities in the legal profession. But, in the contracting game, a minor font size discrepancy definitely does not make the cut for things that need your attention.
🍰Make life crazy-easy for your stakeholders
If you’re going to trust other teams to deal with contracts you need to make it super easy for them to a) get it done on their own and b) escalate where necessary.
Here’s how our panelists create freedom within a framework for their stakeholders:
Prepare top-notch documents.
From templates, customizable statements of work, and MSAs to negotiation guidelines, make your docs watertight and easy to find.
Automate what you can.
If you have access to a tool that offers conditional logic, you can set up “if x then y” rules that spit out the right output when your stakeholders enter the details of the deal. It’s a guardrail and a timesaver in one.
Streamline the review request process.
Create a system that guides stakeholders to provide as much info as possible upfront so that there is less back-and-forth once their contract gets to legal. It could be as simple as a Google form that asks “When do you need this by?” and “What is the contract value?”
Make it less lawyery.
Ditch long, hard-to-read training docs in favor of FAQs, an internal wiki, office hours, and quick videos. Use storytelling, analogies, and plain language to make things digestible.
Get design involved.
If it’s pretty, people are more likely to read it. And it’s more digestible.
🖥️ Get a CLM (or make do)
We’d love to say that you can create a hyper-efficient contracting production line with just a pen, an abacus, and a twinkle in your eye but the reality is that great (expensive) tech makes a huge difference. If you can afford it, get a CLM. A tool like Ironclad offers, among other features:
If you don’t have the resources for a CLM, you can make do with more budget-friendly solutions. You could use Slack to build out a channel where sales can request contract reviews or utilize Monday.com as a makeshift CLM. Get creative with Google Sheets and Forms.
🤖 Be a human
Just because you’ve created a world-class contracting process with the perfect balance of risk and speed doesn’t mean sales are going to be onboard. There will probably be at least one person who doesn’t give a fig about your protocols if they stand in the way of a sale or take time to learn.
Here are 4 techniques for getting buy-in from your internal stakeholders:
Make sure legal is seen as a group of humans who are active in the business, not some mystery department sending down commands from an ivory tower. Delivering training via video call instead of email is one good example.
Get change management right.
If you’re introducing new tech or processes, do loads of cross-functional engagement before (and during) your launch. Get the heads of sales and procurement on board. Get their sign-off. Show them the training in advance. Let them be advocates for your plan.
Highlight the benefits.
Salespeople care about time. Because time is money. If you can show how a new system will ultimately speed up the journey to signatures on the dotted line, sales will be all over it. More transparency in the contract pipeline is another thing that helps everybody out. Push the message that legal is there to facilitate other departments’ needs.
Try the carrot.
There is one thing that is tried and tested when it comes to motivating salespeople: incentives. If speed, efficiency, and safeguarding aren’t incentives enough, then cash-based incentives might do the trick. Just make sure you think through any possible unintended consequences first.
📃 Get ‘em on your paper
So you’ve spent ages crafting templates that meet the business’ needs and shelter it from risk. And you’ve got a tech stack built out that means the whole thing is signed, sealed, and delivered in a matter of clicks. Job done, right? Well, not necessarily. The counterparty may come along and say that they want to use their own darn contract. That means more work for legal and a slower deal. So how do you persuade the other side to use your paper?
Here are our panelist’s suggestions:
Emphasize how your contract is custom-made for your product.
Create talking points to help your business folks do some sweet-talking.
Make redlining a breeze.
Leverage the power dynamic (if it's in your favor).
Get tips from business folks in your company who are usually on the other end of the deal.
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