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Why legal and sales teams need to collaborate more on contracts
Lyle Moran |
July 15, 2023 |

 16,495 total views

Sales teams at businesses have an incentive to close deals quickly, and they typically need assistance from in-house legal teams to finalize contracts.

But Michael Ross, chief product officer at contract management provider LexCheck, said he often hears from clients that Sales and Legal are not working together effectively.

Instead, lawyers are frequently presented contracts from sales to negotiate with the counterparty’s legal team without the context needed to efficiently complete their work.

“Typically there is no conversation about the terms of a deal; it’s simply a transaction to the sales team,” Ross told Legal Dive. “They want it turned around fast, with the fewest redlines.”

This lack of communication can significantly slow deal cycles, which frustrates sales teams and hurts the broader business.

As a result, Ross said it would be beneficial to both sales and legal teams to improve their communications and relationships with one another.

Efforts along these lines could include the sales team sharing with the legal department how turning around contracts expeditiously helps them meet key performance metrics.

Meanwhile, Ross said in-house legal professionals could detail to sales team members the type of contracting context they need to be able to efficiently negotiate contracts.

Additionally, legal teams would be wise to explain the approaches they take to risk allocation and mitigation in the contracting realm to sales units.

“They’re not speaking each other’s languages, but if they can align, understand and bridge that gap, I think deals will be accelerated as a result,” Ross said. 

Using technology

Technology can play an important role in improving the interactions between sales and legal teams about contracts, according to Ross.

He said that many sales teams are currently utilizing customer relationship management (CRM) software, while legal teams are implementing contract lifecycle management (CLM) technology.

However, there are more companies bringing sales professionals into their CLM systems, which can provide both sales and legal teams a greater window into the status of specific contracts.

Sales teams using CLM software can help boost the technology’s internal adoption as well, Ross said.

“When software is in the line of revenue, it becomes stickier,” he said.

Michael Ross

Michael Ross

Courtesy of LexCheck

Deal desks

Many organizations also allow professionals outside of legal departments to tackle the work on low-risk, high-volume contracts such as non-disclosure agreements (NDAs). 

For example, some companies have so-called deal desks that are part of the sales organization and assist with the closing of a transaction.

Technology can support these deal desks in carrying out their contracting efforts, Ross said, which aids resource-constrained legal departments. 

“LexCheck and Salesforce can be used with Sales Ops teams on a deal desk to make the first turnaround of customer documents,” he said.

Implementing this approach for certain contract types frees up legal department personnel to focus on higher-value work, including accelerating negotiations on the contracts in which their input is required.

“It allows them to start tackling the more difficult problems so that there aren’t stalls in the negotiation,” Ross said.

Author: Lyle Moran

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