Contracts are the lifeblood of modern companies.
They define relationships, outline rights and responsibilities, and spell out the details of any sale, including price, timing, payment terms, warranties, and more. In fact, contracts govern most B2B business deals.
There’s no denying that contracts are an absolute necessity for conducting business. But the contracting process can be a major source of tension and inefficiencies, especially between sales and legal teams.
The issue comes down to a difference in priorities. Sales teams are focused on speed. They want to close deals as quickly as possible, in order to drive revenue and meet sales targets. The legal suite, on the other hand, is focused on control. They are responsible for protecting the organization and minimizing risk, so they take a careful, detailed approach to contracts – all of which can slow down the sales cycle.
To balance these competing but equally important concerns, effective contract management is key.
Contracting barriers affect both sales and legal teams
The volume and complexity of contracts in most organizations make contract management a real challenge. It requires careful oversight throughout every stage of the contracting process, from preparation, authoring, and negotiation through approvals, amendments, and renewals – not to mention basic, critical tasks like storing the contract and tracking obligations.
Manual contract management leaves a lot of room for human error. And when legal departments have to manage contracts manually, it often creates an additional burden where resources are already stretched thin. Inefficient or incomplete processes can also lead to approval delays, decreased productivity, compliance issues, increased risk, and lost business due to dissatisfied customers.
The delays and numerous reviews that weigh down the legal team also cause issues for sales teams. When even standard contracts get stuck in lengthy reviews, it breaks momentum and slows down deals Sometimes deals are even pushed into the next quarter or lost due to these delays.
Empowering legal and sales to work together faster
But there are solutions available to inefficient, manual contracting processes that create pain for sales and legal alike. When organizations work to digitally transform key revenue processes, and company culture supports meaningful change, there are benefits for all teams involved in key business functions. When a company works to transform not only technology but overall integration and visibility across revenue processes, there’s light at the end of the tunnel for both sales and legal.
For sales teams, the benefit is the ability to streamline the contracting process and accelerate sales. For legal teams, the outcome is increased control over the contracting process, which avoids exposing the company to unnecessary risk, all while creating greater efficiency and faster cycle times.
By eliminating some of the most common pain points within the contracting process, legal and sales teams are empowered to work more seamlessly together.
For example, they can:
- Work across functionalities to support a single goal: When teams and entire organizations share a culture around creating meaningful change through digital transformation, a lot of pain points get resolved. Add key technology solutions to the mix that make it easier for them to work across functions in pursuit of that goal, and the results can significantly move the needle for the organization as a whole.
- Break down silos and eliminate bottlenecks. When data and processes are unified across teams, it breaks down silos, creating smoother processes and eliminating slow-downs, errors, and inaccuracies. Automation helps streamline the contracting process by clearly defining responsibilities at each stage, ensuring consistent handoffs between teams, and reducing the potential for lengthy delays.
- Invest in appropriate technology to support digital transformation. Many organizations are turning to automated software solutions to eliminate pain points to better work toward common goals. Automation and contracting software is changing the face of contracts and agreements by automating the end-to-end contract lifecycle, making the process seamless for all involved. It eliminates manual, disjointed contract processes and increases operational efficiency. Investing in contract lifecycle management solutions to support key areas of the business is becoming an essential part of many organization’s digital transformation journeys.
3 considerations legal and sales teams should keep in mind
Encouraging deeper collaboration between sales and legal teams should be top of mind. To achieve the benefits of seamless collaboration, there are some considerations to keep in mind as companies work to further integrate these two critical functions.
Risk mitigation contributes to the company’s revenue
Legal plays an important role in protecting the company and minimizing risk. Risk mitigation and management is critical in the contract cycle and legal teams are tasked with important activities like successfully negotiating on key agreements or preventing risk with a specific dollar amount. These risk management and mitigation functions within the legal team help protect and contribute to the company’s overall success.
Consider the benefits of a decreased contract lifecycle
A decreased contract lifecycle time contributes to increased revenue. As legal teams partner and integrate with sales to reduce contract cycle times, companies will not only notice quicker time to revenue but also a reduction in procurement costs.
Investing in technology to help automate key contracting processes can help dramatically decrease cycle times while also promoting cross-team collaboration. Another great benefit of a decreased cycle time is an overall better experience for customers. With a better, automated, and digital solution, delays in the contract process are now a thing of the past.
Legal teams are connected to company goals
Legal teams have a very specific set of skills that others in the company don’t have. It’s easy for legal to focus solely on the policies and procedures but consider how this team integrates into the sales process and contributes to the company’s success and goals. Legal professionals are strategic contributions to company goals.
Consider aligning attorneys within the sales organization to help break down silos and understand how sales teams are using digital tools. There will be a better understanding from all on what is needed or missing from the contracting process. This tactic will allow legal teams to become more integrated into the business and respond faster to the needs of the sales organization.
Invest in technology to support legal and sales team collaboration
As company’s today continue to digitally transform, having an automated, streamlined, and efficient contracting process that encourages cross-functional team collaboration is necessary. The positive results from strong collaboration include eliminating silos between teams, accelerating revenue, and creating a better customer experience. Supporting both the sales and legal teams with tools to speed up contract cycle time will prove to be beneficial for your customers, while also making a positive impact on your company’s bottom line.