Streamlining commercial contracts
For many types of business, maintaining a strong sales performance is absolutely critical. (Subscription services, for example, and software providers, consultants, and many others.) These businesses must continuously turn leads into customers by negotiating and agreeing contracts with them. So how quickly and smoothly that process works has a real impact on the bottom line.
Unfortunately, lawyers can often pull things in the wrong direction. By being totally focused on minimising risk and avoiding unanticipated problems, they slow things up and sometimes even stop a deal from happening at all.
At LCN Legal we take a more commercially-minded approach, which includes more than just legal advice. We apply our skills and experience to help businesses to improve their commercial ‘sales to contract’ processes, and to remove unnecessary legal blockages. Exactly how we do this varies from client to client, of course, but we start by looking at six fundamental areas.
1 – The existing sales cycle
How does the lead generation process begin? What are the legal or negotiating blockages? Do the same problems happen over and over again?
2 – The big opportunities to speed up the sales cycle and increase the conversion rate
For example, dramatic improvements can be achieved simply by ensuring that the client uses its own documents as a starting point, rather than working with legal agreements produced by its customers’ lawyers. Similarly, cutting out just one round of drafts can help to close a sale significantly faster. We’ll also work out how much it would be worth to the business financially to make these changes.
3 – The legal issues that are most important
What are the risks that the business must pass on to its customers? Which risks is it happy to accept? And then delving more deeply: what does the business’s claims history look like? What does it cover with insurance, and could this be changed? What are its competitors doing in relation to these issues? How can we take an approach to legal risk that creates a competitive advantage to the business?
4 – The current suite of template documents
The form and style of legal documents matters. Are the existing ones simple and in plain English or lengthy and commercially out of date? If not, we’ll create a suite of first stage documents that will work. Then we’ll look at the second stage documents (supply contracts, for example). They must be tough on the issues where that’s essential, but as fair and reasonable as possible on the rest. They also need to accurately reflect the transaction they are supporting.
5 – The sales team’s commercial and legal awareness
Do the sales people understand the way that the legal documents work, and how sales decisions can impact the cost of delivery and the risk of future loss? Do they push the business’s own documents out as a starting point rather than inviting the customer to propose its own terms? Can they tell when legal input is required? If not, more training is required.
6 – Systems for regular feedback, review and training
An organisation can’t improve unless it knows what’s happening now. It’s important to involve all relevant parts of the business, including the sales team and the delivery team, because decisions made in the sales process can have a significant impact on the cost of delivery or the associated risks. The results of these reviews can suggest all sorts of improvements, such as producing and refining FAQ documents for internal or external use, creating deal summaries and flow charts showing when and how issues should be escalated, and developing sales training programmes.
We’ve done this for dozens of clients, including international groups and household names. And if your company or business unit has sales of around USD50 million or more, we could do it for you.