4 Ways Legal and Sales Can Collaborate

In order to win and close deals successfully and quickly, sales and legal need to maintain a united front. This means being on the same page when it comes to contracting, as a significant portion of their work together is creating, negotiating and sending contracts.

However, whereas legal wants to double- and triple-check that the terms are suitable, sales wants to send a contract off as soon as possible and shorten the time to closed-won.

Though sales cycles are different across businesses and industries, most cycles follow a similar path:Prospect > Lead > Discovery > Opportunity > Proposal > CloseBecause each business and industry measures its sales process differently, it is hard to determine the average length of a sales cycle.

Nearly 75 percent of respondents to a CSO Insights study reported that their sales cycle for new business-to-business customers took at least four months.

On the other hand, the average sales cycle length was 102 days, Geckoboard found.

Still, we can deduce that a quarter is the average selling time for industries across the board.

Identifying the Bottlenecks

External factors also might influence the length of your sales process. Enterprise deals, for example, may take longer than deals with small and medium-sized businesses. Warm inbound leads might close more quickly than cold outbound leads. Inefficiencies at every stage of the sales process can and will cause bottlenecks.

However, contracting is one of the biggest bottlenecks in the sales cycle, and is notorious for impeding sales velocity. As many as 85 percent of sales contracts still are executed manually, and with approximately 40,000 contracts within an enterprise, sales and legal typically spend more time than necessary on contracts that can be automated.

Following are some ways sales and legal each can provide cross-functional support for the other to ensure that the business wins the deal in a shorter time with little to no legal risk.

1. Decreasing Time to Sign

Much of the bottlenecking in the sales process happens around slow or traditional contracting processes. Eighty-six percent of respondents to a SpringCM study noted that contracting took anywhere from two to six weeks. The longer it takes for contracts to be reviewed, redlined and approved between the transacting partners, the longer it takes for the deal to close.

Traditional contracting manually slows down the sales process, leaves a lot of room for human error, and often gives legal more work to do than necessary.

To mitigate this, sales and legal should decide collaboratively what their ideal contracting workflow looks like, and jointly choose a solution that works for both parties.

Ideally, the contracting would be based on the natural workflow of the signer. Customers constantly on the go will take longer to review and accept a contract sent via email than one sent via SMS.

Even better, divide your contracts into standardized (contracts that have little if any changes no matter who is the recipient, like Terms of Service, nondisclosure agreements and certain service level agreements) and personalized (contracts that are “one off” and that have provisions specific to a signer), which will save you time on contract creation and negotiation.

Clickwrap agreements can help with seamless, enforceable acceptance of both standardized and personalized online contracts, and allow sales teams to meet customers wherever they are.

2. Defining the Sales Process

While sales will take the lead in defining the sales process, legal needs to have input, especially when it comes to bottom of the funnel. Sales teams might hesitate to do that because legal tends to take a long time in drafting contracts, wanting to make sure that everything is perfect.

In order for both teams to work together seamlessly and decrease time between opportunity and closed-won, sales and legal both should define the point in the stage that legal should enter, what will be needed from the legal team, and an ideal turnaround time.

An ad hoc sales process can lengthen time to close and create confusion. The lack of standardization can input more guesswork into your sales process and make each stage longer, or prevent a deal from closing at all.

The more rigorous the funnel, the more likely sales is to win a deal, studies have shown. This means understanding metrics in detail, knowing what kinds of contracts will be needed, working with legal to prepare them in a timely manner, and holding regular pipeline reviews to talk about deals at the top and middle of the funnel, including what their contracting needs might be.

Waiting until the end of the funnel to be rigorous in the process can lead to a longer cycle length.

3. Integrating Contracts Into CRM

Collaboration between legal and sales can lead to a more streamlined way of bringing contracts into the sales process. One step above that would be getting new customers to sign contracts in the environment where they spend most of their time, namely their CRM, or source of truth.

Sales teams often leverage their CRM as their source of truth to track opportunities and contacts and their progression along the sales pipeline. If a sales team spends most of its time in the CRM application, it would be easier to send contracts to opportunities without ever leaving it.

This not only allows contracts to be signed more quickly, but also means there’s a series of standardized templates that legal can draft, and that sales can use in specific deal types or instances that meet certain criteria.

This kind of integration allows faster and easier contract signing since they’re sent straight to clients for easy acceptance. Additionally, it allows for more valuable data in contracts. It also helps with contract execution in upsells, cross-sells, and renewals.

This approach helps optimize recordkeeping in the long run, which helps with transparency and the enforceability of agreements.

4. Drafting a Comprehensive Contract Playbook

Legal can share a sales-friendly version of the contract playbook to educate the sales staff about the company’s standard fallback positions. Within the contract playbook, legal outlines standard contracting terms and acceptable variations, as well as non-negotiable terms and an explanation of which terms are mandatory and why.

More detailed contract playbooks also include possible client objections and workarounds.

A contract playbook reduces the time spent on drafting contracts and going back and forth between legal and sales about how to do contracting.

This includes having an approvals matrix. Having an approvals matrix in place and a delegation of authority can go a long way toward saving time. If an organization does not have one in place, the legal department can work with sales (and other departments when necessary) to implement a policy regarding who can grant which approvals, and when.

The legal team can state explicitly which contracts and agreements are included in the policy, which titles hold which authorities, and specific deal dollar amounts that are approved for various title holders.

Collaborating to Shorten Sales Cycles

If sales and legal approach their relationship as a partnership, sales cycle lengths can decrease dramatically and further the mission of increasing sales velocity. Most of all, alignment on contracts and optimization of workflows in which they are included can impact sales cycles positively and reduce legal’s workload.

This can have a significant impact that not only strengthens the relationship between legal and sales, but also improves the bottom line of the business in general.

Brian Powers

Brian Powers is the founder and CEO of PactSafe and a licensed attorney. As the CEO, Brian leads the strategic vision of the company's high-velocity contract acceptance platform. Prior to founding PactSafe, Brian's law practice focused primarily on representing the transactional needs of tech companies. Brian is a frequent speaker, instructor and author on topics ranging from clickthrough contract acceptance to privacy-related consent management.

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