Contracts can be complicated but that doesn’t mean they have to be. No matter the size of your legal or contracting team, we’re all trying to do more with less. If you have two people, you’re trying to do the work of five; if you have 20 people, you’re trying to do the work of 50. One way in-house counsel and contracts professionals actually can squeeze more productive hours out of their days is by simplifying contracts.
What do we mean by “simplifying contracts” and how can you achieve this? We asked “Contracts Queen” Roma Khan of CrushContracts and The O.G. Contract MVP Foster J. Sayers III of Pramata this very question and here’s what they suggested.
1. What does a normal contract look like?
Foster: Most contracts, assuming the process hasn’t already been simplified, have a lot of moving parts. In a commercial contract, you typically have a governing set of terms and conditions, order forms, a statement of work, information security and data protection agreements, and so on. The more moving parts there are, the more complex the contract is.
Roma: Absolutely, I agree with all of that. On top of those elements, I like to say that what makes a contracting process complex is “everyone, everywhere, all at once.” When you have too many of anything: too many approvers, too many checkpoints, too many steps, too many opportunities to redline, too many methods of communication or places to check for possible notes. It’s just too much!
I like to say that what makes a contracting process complex is “everyone, everywhere, all at once.”~ Roma Khan
2. What does simple contracting mean to you? What are some of the essential ingredients of a simple contracting process?
Roma: To me, simple contracting means fewer steps and greater visibility. Those are the two largest signs of simplicity in any contracting process. Fewer steps reduces the lawyers involved. It’s the opposite of what I describe as a complex contract. Instead of “everyone, everywhere, all at once,” the process is limited to just the people who need to be involved and everyone knows where, when, and how they fit into the process. Visibility is also important because when you have visibility into the contracting process, each stakeholder can feel less anxious and you’ll have less of those “checking in” emails or escalations asking what the status of the contract is.
Foster: A simple contracting process is one with the lightest touch required from the parties involved. One important tip I give to anyone trying to simplify their contracts is to keep as much as you can out of the contracts. For example, your data protection or privacy terms and conditions. These are very likely standardized and governed by laws or industry standards, meaning they’re not up for negotiation. Instead of including them in a contract and putting them in front of a customer for negotiation along with all the other pieces, hyperlink to them.
One important tip I give to anyone trying to simplify their contracts is to keep as much as you can out of the contracts.~ Foster Sayers
3. What are the advantages of simplifying the contract process?
Foster: First and foremost, it’s the increased contract velocity that every sales team wants. When a customer says, “Send me a contract,” that salesperson has momentum and they don’t want the deal to evaporate because contracting took too long.
Roma: You save time and you build trust. Like Foster said, increasing that contract velocity is extremely important to the business. You also build trust with your sales team by having a simplified process that moves quickly. If you can simplify your contracts, you can also avoid what we see sometimes – legal teams redlining just for the sake of it. Legal teams can rest assured that each contract includes components that they’ve already thoroughly reviewed and signed off on, that aren’t up for negotiation.
If you can simplify your contracts, you can also avoid what we see sometimes – legal teams redlining just for the sake of it.~ Roma Khan
4. How can a contract management (CLM) solution help simplify contracting? What are the key capabilities you would look for?
Roma: A contract management solution means less burnout, a less exhausted legal team, and happier stakeholders across the business. Technology absolutely gives your in-house team back time to devote to more substantive tasks than processing contracts. That makes your counsel happy, and there really should be a saying for this. Like “Happy Wife, Happy Life” – happy counsel is very important to the overall success of the business.
Foster: All of that, for sure. Burnout is an extremely large problem especially for small legal teams. When you have the right solution, it gives the team time to exercise their expertise and do the work they really want to be doing. I like to say, organizing contracts isn’t why you went to law school. Whatever type of contract management system you use, whether it’s full or specific just to your needs, make sure you’re focused on solving the most painful problems. Like tracking, managing and reporting all of your contract commitments.
Whatever type of contract management system you use, whether it’s full or specific just to your needs, make sure you’re focused on solving the most painful problems.~ Foster Sayers
See how radically simple contract management can be; request a custom Pramata demo.