How can I speed up sales?

ThoughtRiver writes:

There are responsibilities on each side of this relationship that contribute to the strength and power of the team. This blog post will explore this important relationship and those responsibilities and look at how automated contract review technology is now capable of making this relationship even stronger and much more efficient. We will also touch upon the concept of deal velocity and how using this as a joint metric between sales and legal can drive business value and create more coherent teams.

Deal velocity is the speed with which a company can negotiate and then sign a contract to close a transaction. It is absolutely key for any organisation in terms of maximising the full value of a deal, yet it is often overlooked as a KPI that can be measured and improved.

A recent Gartner study (Legal and Compliance Automation Study - 2019) highlighted this need for speed when they found that the number one ask of the legal department by other members of executive management is to increase speed. The vast majority of this requested speed is in relation to signing deals with new customers, and thus directly relevant to this discussion and to the sales team.

Sales: (take responsibility- you own deal velocity)

• Learn the ABC's of Legal so you can add value to your legal counterpart: You don’t need a PhD in contract review, or even a law degree, but a sales representative should be able to provide their legal counterpart with a summary of the big legal issues in any contract and then own the business/commercial negotiation points. The days of just emailing an unreviewed MSA to legal and making it their responsibility are over. Sales needs to frame the strategic value of the deal, expectations on timing, and summarize the major areas of legal red flags. I think the key point here is ownership, great salespeople really own their deals and are adept at gathering the resources they need from around the organization to get them signed and earn their commission. They see other departments as partners and spend time building the relationships needed to get things done when the going gets tough. And in sales, the going always gets tough at some point, so be prepared.

• Make legal part of the “Win team” and share a deal velocity KPI: The end of the sales cycle, that final mile, is the most exciting part, but also the most fraught with danger, you’re almost over the line, but not quite, so making sure that your legal counterpart is as invested as you in the win is key. Being proactive on the front end of the negotiation establishes positive momentum but continuing to work collaboratively to the close is just as important. For example, Sales should own and resolve the business issues (pricing, marketing, PR, etc). Finally, once the deal is completed, sharing the celebration, a thank you and acknowledgement of the effort that went into the deal is a must. My strong advice to all sales leaders is to create a shared metric called “deal velocity” that is owned by both the sales team and by legal, they are both responsible for making each deal as fast as possible, but also to their existing KPIs. Sales will be maximizing the value of the deal and legal will be managing any risk in the deal, if they partner well the business thrives.

Legal: (don’t be the black hole, instead help to drive deal velocity)

• Create a Contract Playbook/Checklist for sales: Ok, let’s call this a cheat sheet for sales. Most enterprise legal teams already have an existing playbook that they use to define their preferred legal positions in order to manage the risk. These playbooks or policies are used to train new employees or outside counsel when work is being pushed to them. If the major legal issues and positions are summarized in the playbook, as well as a guide to approvals for items outside of the box, this can help sales to work smarter and be more effective. Both in triaging issues as they arise with the counterparty and also in communicating the initial summary to legal when a newly redlined contract is first sent for review.

• Provide an SLA: This is not something that often happens, but it is important in removing that perception of the legal inbox being a black hole. Perhaps just being able to respond and acknowledge a new contract has been received and is in the queue is the first seemingly trivial, although important step. Taking this further by providing an actual estimate of when the review will start, who will handle it, and how long it should take, might be the gold standard that we should all aim for.

 These are great best practices and a solid starting point. But what if there was a way to automate this further to drive significant efficiency on the contract review side so that the major risks were automatically identified in a matter of minutes?

Pre-signature automation:

Instead of receiving a contract from sales with little to no context for review, the  lawyer instead receives a summary which includes a risk rating (high, medium, low) and a description of the major areas of concern as well as the missing clauses, this saves them a lot of time. Most of our clients at ThoughtRiver say we save them between 33% and 66% of their review time. This also enables the lawyer to prioritize their work better and provide an SLA back to sales related to the anticipated turnaround time. Here is an example of a risk summary generated by ThoughtRiver’s automated contract review tool, and how this works in practice:

The lawyer receives an agreement, submitted by email from sales and can understand immediately what the key issues are and get an overall understanding of its risk level. This in turn allows the legal team to set measurable SLA’s with the sales organization. For example:

Not only does this save precious time for both sales and the legal team, but both are also positively impacted personally and in fact become happier about working together. If you look at that first row of the table above, the lawyer does not even have to get involved, the entire process has happened without them needing to read the contract. The beauty of this is that the risk is still being managed by them, as the automated contract review happens against their approved policy which has been ingested into their ThoughtRiver platform.

It is also worth mentioning that the data collected from this automated review of contracts also enables a wide field of possibilities post signature.

Post Signature Insights:

What if scorecards were possible to share insights with the CEO and the business?

End of Quarter Scorecard:

• Legal SLAs met: % by risk category
• Legal impact on business: # contracts completed, trends quarter over quarter
• Overall view of risk for all new contracts signed (% deviation from playbook position across all major risk categories)
• Movement of risk for existing contracts that were renewed or renegotiated
• Third party vs. Standard agreement (quarter by quarter)
• Analysis by customer (to be used for future negotiation)
• Impact on quarter closed revenue

Today, GC’s are under increasing pressure to deliver measurable value to the business and the sales organization has considerable, never-ending quarterly goals to achieve. Aligning on a strategy powered by technology solutions to automate contract risk and review as well as provide business insights and impact is a huge competitive advantage.

I have been fortunate to partner with some of the best attorneys throughout my career and have always valued their contribution and partnership. Turbo charging these strong relationships between legal and sales with powerful technology to drive value to the business and to customers is an extremely exciting and compelling opportunity.

You can read more about how to use deal velocity as a joint KPI between sales and legal in this blog post, or listen to Michael Lisowski from Ascential Plc and Jennifer Hill from Remedy Analytics talking about the importance of deal velocity and the other benefits of automated contract review in this webinar recording.