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eBook

How Legal Can Partner with Internal Teams to Drive Profits

In this eBook, we’ll describe the techniques and technology that internal legal teams can use to help out fellow departments and more obviously contribute to the company’s bottom line.

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How Legal Can Partner with Internal Teams to Drive Profits
Introduction: More Than a Cost Center Internal legal teams and in-house counsels are often viewed as cost centers by their organizations, but with the right tools and a set of proactive best practices, lawyers and paralegals can clearly drive down costs and drive up company profits. In this eBook, we'll describe the techniques and technology that internal legal teams can use to help out fellow departments and more obviously contribute to the company's bottom line.
Becoming a Profit Partner There are two basic ways to increase profitability: decrease costs or increase revenues. While virtually every lawyer decreases costs by minimizing risks and installing legal protections, very few non-lawyers understand the concept of "likely future costs avoided." They need simple, obvious, ongoing examples of how the legal team saved the company money or brought in new income. Fortunately, most internal departments have some obvious areas where the legal team can boost profits. We outline the biggest opportunities below. Becoming a Profit Partner When the sales team closes a deal, the customer signs a contract. The effort it takes to finalize that contract is an obvious cost area because virtually every modern sales team measures time-to-close and most teams document the common customer objections that add friction to the sales process. Time is money and time spent on long-closing or never-closing deals is money lost. The legal team can help on both fronts. Bring Your Own Paper Nothing slows down the sales process like having to negotiate a contract from scratch for every deal. Having a standard contract that is the basis for all sales is a great way to lower this friction. By some accounts, having a standard sales contract can decrease close times by 90 percent. The good news is that most sales teams already have a standard contract in place but don't take the principle far enough. There are always circumstances where a sales representative will need to alter the standard contract to accommodate special customer needs. Both the legal department and the sales team need a clear process to handle this situation. First, the sales team needs to identify the circumstances that allow a sales rep to alter the standard contract. For example, very large customers are likely entitled to a better price, so the standard contract should be designed to automatically "hot swap" the pricing section to more competitive rates if and when the customer represents higher levels of revenue. The sales team should have clear rules about which customers qualify, and the legal team should have clear language and pricing tables that can be substituted when circumstances require. This avoids the need for manual legal reviews when the standard contract is altered.
By the same token, very well-known companies (or individuals) may be entitled to special consideration if they agree to sign on as reference customers. The standard contract should have addendums on-hand that spell out the obligations of a reference customer -- allowing the use of their names and logos, listing your company as an official partner on their website, agreement to a regular cadence of press releases that quote their executives as customers, minimum notice timelines to terminate this arrangement, etc. -- so there is no confusion. The special pricing or considerations offered for reference customers should also be clearly spelled out so the sales rep can include these addenda with little to no legal review. Finally, customers in particular industries may have special needs that must be reflected in their contracts. Health care clients need special HIPAA compliance. European clients need GDPR considerations. Non-profits have special tax reporting needs. Contract addenda -- particularly those that concern service-level agreements and privacy policies -- need to be at the ready so sales reps can apply them to the right customers without explicit legal micromanagement. Having your own pre-made sales contracts, with your own pre-built variations, can do wonders to lighten your legal workload, keep close times short, and make it easy to measure how the legal team has lowered the cost to acquire a customer. 3 Tech That Makes It Easy A pre-signature contract drafting solution that integrates well with your sales lifecycle software, so that when a customer qualifies for a particular non-standard contract, the sales team is automatically provided with an appropriately revised document directly within their sales flow.
Keep It Simple, Stupid It's not enough that your own legal and sales teams understand your default customer contract; the customer has to understand it, too. When the sales team tracks time-to-close, if the deal frequently gets stuck in "client legal review," it may mean you've gone too heavy on the legalese. If non-lawyer clients can't understand what they're signing, they have to send it to in-house counsel. And if the document is so arcane it takes a long time for the client counsel to parse (or explain to the laymen decision-makers on the client side), any obscurity-based advantages you've buried in the contract language are more than offset by the loss of sales velocity. Putting your contracts, privacy policies, and user agreements in the simplest possible terms will expedite the sales process. Tech That Makes It Easy A customer relationship management tool that tracks delays in the sales cycle and can reliably attribute sales friction caused by extended client legal reviews. Be Fair and Balanced If your customer contracts consistently get kicked back with the same client redlines over and over again, that's a pretty obvious sign you've got an onerous contract that's gumming up the sales flow. Don't try to sneak one past your clients in sales contracts, especially when the clients keep catching what you've hidden there. An honest contract is a contract that's easiest to execute. Easy-to-execute contracts save time and money. Tech That Makes It Easy A contract analysis tool that can parse client-submitted redlines and note which sections of your standard contracts are consistently altered, and in what way.
Partner with Marketing If the sales team is closing reference-customer deals, it would be really helpful to the marketing team if they knew exactly what they were allowed to say about those reference customers. The legal team should draft regularly updated lists of reference customers, as well as a detailed description of the marketing assets those customers are contractually obligated to provide, and what areas and ways the marketing team is permitted to use them. (Put simply, tell marketing whose logos they can put in sales decks, please.) By the same token, the legal team should have a very polite boilerplate letter that informs a reference customer of their obligations to your marketing team, which is delivered upon contract execution. Simply giving the marketing department a little "per our contract" ammunition to nudge a slow-moving client along is more helpful than most lawyers would ever imagine. Making marketing easier means making marketing cheaper. Tech That Makes It Easy A contract analysis tool that can identify reference customer clauses in your contract repository and help you easily generate a list of appropriate customers and their obligations. Partner with IT & Software Engineering Your IT department has a very thorough list of procedures for protecting and repairing your software and data after a system failure or security breach -- but do those procedures match up with your contractual obligations to your clients? If not, your company could be racking up a great deal of unnecessary expenses -- ones the legal team could help you avoid, If you offer different Service Level Agreements, complete with outage compensation, to different clients, the legal team should provide IT with a list of these cases, so they can properly prioritize repairs during a mass outage. (Put simply, they need to know who to fix first, based on how expensive their outages will be.)
By the same token, if your Terms of Service or Privacy Policy require notification of a data breach within a specific time frame, the IT department needs to know how quickly and how often to update customers before they put contracts in jeopardy. Helping IT handle system failures in a contract-conscious manner not only saves money but also helps show the value of legal oversight. Tech That Makes It Easy A contact analysis tool that can parse out Service Level Agreement contract language and provide an ordered list of the clients that must be repaired or notified soonest.
Conclusion: Proactive Legal Teams Drive Profits Your legal team can prevent or solve a number of problems for several departments in your organization, and all of those solutions have dollar figures attached to them. With a little proactive reporting, notification, and coordination, your legal team can protect or increase revenue in several situations for several different internal teams. All you need is a little effort and the right tools to make such profitable proactivity practical. The Tech That Makes It Easy LinkSquares is a contract analysis and management tool that uses cutting-edge artificial intelligence to parse, comprehend, and categorize contract language at the speed and scale of software. With LinkSquares, you can draw out the key contract clauses -- and identify the exceptions to your standard agreements -- with just a few clicks of the mouse. Nearly every report or intervention listed above is made possible with this simple, scalable solution. With a little help from LinkSquares, your legal team can go from "perceived cost center" to "appreciated profit driver" in no time. If you're ready to embrace the next generation of contract analysis automation -- and get your legal team on the right side of the company ledger -- contact LinkSquares today.