How to Speed Up Enterprise Contract Negotiation with A Secure Document Editor
3 June, 2022“If everyone is moving forward together, then success takes care of itself.” — Henry Ford.
In the world of business development and deal-making, it’s all about winding up the negotiations and closing deals. Everyone knows that the heart of every deal lies in the contract. Unfortunately, inefficiencies in the contract writing process can stretch the time it takes to close. As a business development leader, you need to find ways to streamline contract negotiations by using better document collaboration tools.
Traditionally, contract negotiations were a convoluted and time-consuming process. There was a lot of back and forth involved in the contract co-authoring phase. Obviously, this is highly inefficient and slows down business so much that it leads to lost deals. But why on earth does contract writing take so long?
Why Contract Negotiation Takes So Long
The typical negotiation stage for a business contract has a minimum of 8 steps to close. Manual negotiations can involve not just the seller and buyer, but also legal teams from both parties. And since many of the steps are repeated several times before everyone can agree, it makes for a longer contract review cycle that slows down business.
For business leaders, shortening the contract negotiation phase can be extremely challenging. On one hand, you don’t want to rush things because you want everyone on the same page. On the other hand, you also risk losing the sale completely if you take too long with the back and forth.
But with about 85% of B2B contracts still being manually executed, bus dev and legal teams are spending more time than is necessary, working hard not smart. Here’s a quick look at the steps a typical contract negotiation may involve:
Typical Steps when Negotiating a Contract
- Buyer and seller agree on broad terms and the contract is sent for review
- The contract is passed on to the respective legal teams
- General counsel usually passes on the work to a junior associate
- Associate comments on and redlines the contract and returns it to the partner
- Counsel reviews the draft making additional changes as needed
- The legal team meets with Bus Dev to discuss objections and caveats
- Bus Dev team meets with the buyer to discuss the latest objections
- The buyer meets their legal to comment on and edit the contract again
* In most cases, steps 2 to 8 are repeated several times until all the objections are addressed and both parties agree and sign the final version. Needless to say, this can really drag out the process and bring business to its knees if it is not done efficiently.
So, how do you give the contract negotiation process a much-needed boost in pace? Easy! Do it in the cloud.
How to Speed Up B2B Contact Negotiations
Contract writing is hands down one of the biggest bottlenecks in the business development sales cycle – notorious for impeding sales velocity. Looking at all the steps mentioned above, it’s clear that organizations need to increase efficiency somewhere in the contract development cycle if they hope to wrap up the contract negotiations faster.
The following are a few ways legal and business leaders can provide cross-functional support and ensure the company wins deals in a shorter time frame with no legal risk at all.
1. Define the Whole Process
Although bus dev takes the lead when defining the process, legal also needs input. Both departments should define the stage at which legal should enter and the expected turnaround time in order for them to cooperate seamlessly. An ad hoc sale process will not only create confusión — it’ll also delay the time to close.
A smooth contract negotiation process includes knowing what kind of contracts will be needed, understanding the metrics in detail, working closely with legal, and holding regular pipeline reviews to talk about deals at each stage of the funnel. Don’t wait until the end before defining what needs to be included in the contract. This will only lead to a longer sales cycle.
2. Decrease the Time to Sign
A lot of the bottleneck in the business development lifecycle is due to slow, traditional contract writing. The longer it takes for the contracts to be redlined, reviewed, and approved by the parties involved, the longer your sales cycle will be.
Manual contract review not only slows down sales. It leaves a lot of room for human error. In turn, this swamps legal with more work than is necessary. To mitigate this, both departments should decide what their ideal contracting workflow should look like.
Likewise, taking advantage of software standards such as Clickwrap for obtaining digitally signed agreements can come in handy for seamless, enforceable acceptance of contracts. Using Clickwrap-enabled document collaboration tools should effectively cut down all the time that would have been wasted getting parties to sign NDAs and other agreements.
3. Get an Online Document Editing Tool
Don’t be like most of your old-school peers who are unwilling to embrace new tools and waste so many hours redlining contacts the old way. Thanks to recent advancements in document collaboration technology, manual contract redlining can be pretty much rendered obsolete.
Today, you can get a jump on your competition by using a wide range of cloud-based software designed to make the process of contract negotiation quick and efficient.
If you’re looking for real-time collaboration in the cloud with document review, sharing, and co-authoring, nothing beats CollabLoop, an online document collaboration tool perfect for speeding up contract co-authoring and review.
With CollabLoop, users can look forward to the following:
- Secure document collaboration
- Paragraph-level editing privileges
- Real-time co-authoring and editing
- Secure store, sync, and file share capabilities
- Gold-standard document security
- Simplified document project management
- Change history and version control
With benefits like faster document reviews, a substantial boost in productivity and a decrease in costs, say goodbye to snail-pace contract negotiations and hello to the next deal in the funnel thanks to faster contract writing with CollabLoop.