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Sales and legal: essential collaboration for contract management
Lexion |
January 10, 2023 |

 16,396 total views

Eight ways to improve legal and compliance risk management

In many organizations, slightly different priorities in contract management make sales and legal to be constantly at loggerheads regarding sales contract management, which often leaves legal scratching their heads and asking the question: What does sales want from the legal team, anyway?

Imagining a situation when these two departments are in sync may seem far-fetched. However, it’s crucial to the success of every organization. And, thanks to contract management software, it is within reach.

Why sales and legal should be a high-priority partnership in your business

On the surface, sales and legal may seem to have conflicting interests. Sales want deals to move fast, while legal prioritizes compliance processes and risk minimization. Legal also wants deals to move fast but are less willing to compromise due diligence for speed. However, in the long run, these interests converge.

If sales unintentionally exposes the business to liability because they were eager to close a deal and moved without clearance from legal, it could have a ripple effect. Any liability failure can cause reputational damage that may affect your organization’s ability to get new businesses.

On the other hand, delays caused by a lack of collaboration between sales and the legal department could slow down momentum in deals and, worse, result in lost sales. These could translate to your organization failing to meet its revenue targets.

Getting your sales and legal to see themselves as partners in driving business growth will benefit your organization. When sales and legal collaborate efficiently, you will have better contracts without unduly compromising on speed.

The common issues that prevent effective collaboration

Understanding why sales and legal teams struggle to work together will help you develop or adopt solutions to solve them. Let’s see some issues:

Different priorities

The main reason is the difference in priority. While sales prioritize speed in closing deals, legal wants to dot every ‘i’ to eliminate or minimize unnecessary risk. This difference makes sales see legal as a bottleneck to closing deals.

Inefficient communication

Collaboration is impossible without communication, and many legal and sales teams struggle with effective communication. Lack of proper communication is at the heart of the strain between departments. If legal doesn’t communicate and carry sales along, sales won’t understand why legal disapproves or delays in approving deals.

Manual contracting

Not designed for contracts, the legacy tools used in traditional contracting have not made contracting any faster. So, they can’t support the level of collaboration that current contractual agreements require.

Small organizations may make do with legacy tools like emails and spreadsheets. But once your contracts run into the hundreds and thousands in number, it will become a cumbersome and frustrating process.

How comprehensive contract management software improves collaboration

Contract management software was designed specifically for contracting, which involves both sales and legal teams. A robust contract software provides tools to help your organization collaborate more efficiently at every stage of the contracting process.

Contract management software improves collaboration between sales and legal in the following ways:

Speeds up sales cycle and closes deals more efficiently

What do sales teams want from legal? The answer is simple: To reduce contract turnaround time. However, because of the nature of contracts, some will always take time, but they can be more efficient. Contract lifecycle management software can help you speed up your contract process in several ways.

Building pre-approved contract templates and clause libraries can empower sales to create and negotiate contracts with little to no input from legal. When you shorten this stage, you’ve shortened sales cycle times.

Sales contracts often stall at the contract review and approval stage. Delays could be because those who need to approve are busy or have forgotten the contract. You could also have a situation where someone forgot to send an approval request.

Contract management software automates contract approval processes. No more having to send approval requests manually. Sales won’t have to keep reminding legal to approve the contract, as the contract software sends real-time notifications.

Electronic signatures and other methods to validate signing contracts make closing deals smoother.

Streamlines collaboration by centralizing activity and communications

Contract management software gives you a single platform for all contract activities, including creating contracts, assigning tasks, negotiating, redlining, reviewing and approving, and signing. Contract activities are manageable when you don’t have to jump from emails to shared docs and spreadsheets.

Effective contract management strategy requires high-level collaboration and communication between external and internal stakeholders. Using email alone as your communication tool is hardly efficient. Contract management software brings stakeholders together in one platform, so communication is centralized. With contract management software, every team member receives real-time email notification of all communications and activities relating to the contract. This way, everyone can be on the same page all the time.

Provides complete visibility from contract creation to execution and beyond

One of the challenges the sales team faces is not knowing the state of their contract. Contract management software can be a game changer in this aspect because it provides contract visibility through the entire contract lifecycle.

Legal is unjustly seen as a silo and locking other departments out of contracts. However, contract management software can change that. Sales can log in to the platform and check the contract status without feeling like they are bothering the legal department.

With sales contract management software, you can still protect legal’s interests by assigning role-based access, so you do not compromise security and privacy for visibility.

Minimizes roadblocks by allowing stakeholders to work where they’re comfortable

A good contract management software is intuitive to use. You don’t need to be tech-savvy before you can create contract workflows and standard sales contract templates. It can be as easy as drag and drop.

Contract management solutions make collaboration easier. You don’t have to send an email to get a stakeholder’s attention. You tag them, and the software does the rest.

Integrating your contract management software with your other tools, such as your customer relationship management (CRM) software, will unlock a higher level of ease of collaboration between contract stakeholders.

Author: Lexion

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