Contract Sent Logo

When legal should join the sales cycle

·

·

,
When legal should join the sales cycle - Contract Sent

The sales cycle for an enterprise-level SaaS solution can often be in the range of three to six months. During this process your account executive is busy building relationships with as many people in the customer’s organization as possible, doing demos to multiple stakeholders, and building momentum to eventually close the deal. Often, after all of this hard work, the deal will make it to the contracting and procurement stage and stall. Suddenly you’re faced with a barrage of redlines, legal teams that fire emails sporadically back and forth, and an account executive who says “it’s with legal” in every pipeline review. It can be painful to have that black hole in your sales cycle when you are counting on a deal to hit the target for the month or quarter. So when is the best time to inject legal into the sales cycle to speed things up and how do you approach this?

When legal should join the sales cycle: Legal before procurement

Legal redlines can be long and drawn out and even when they aren’t they still take longer than expected. Separating the majority of the legal discussion from the commercial discussion can allow your account executive to ask a champion who is interested in proceeding but not yet ready to commit to a dollar value to have their legal team review a master service agreement that does not yet have the commercial dollars and cents of the deal in it. By separating your master service agreement from your statement of work your sales team will be able to have conversations with leads to do this.

To arm your SaaS sales leadership and team for these conversations you can give them strategies whereby they identify the customer’s proposed launch date and then work back from this with the average time that it takes to do redlines. A sentence such as “I know you want to get kicked off at the start of June, I’ve noticed that redlines normally take three or four weeks, how about we get our legal teams looking at a master service agreement now and then when we proceed it’ll be a simple statement of work?” will help your sales team to sell this early involvement of the legal team.

When legal should join the sales cycle

Gauging when it’s too early for legal

One of the signs that should tell the sales team that it’s too early to bring in the legal team is when their champion is not a decision maker and they haven’t built out relationships with decision makers yet. This can be a cardinal sin in gauging when legal should join the sales cycle. A skilled SaaS sales leader should be able to gauge this well. Although the champion may indeed be the person who ends up using your product what your sales team needs to gauge is whether or not the person they are engaged with has the clout to have legal resources on their side actively engaged with a review.

If a legal team in a large enterprise company is sent something by someone they don’t see as a decision maker often the work will get little to no attention. The champion in this case will let your account executive know that it’s with legal and the negotiations will sit unattended. This is a very common and very easy way to have a pipeline that is over forecast in either the amount that is forecast or the close date that is forecast.

At the end of the day unless a legal team is actively engaged with redlining and there is a champion who can push them to do this faster you will get caught in a position that looks great forecast but nothing ever seems to close. Having an experienced account executive will help you navigate this. But it’s also important to create tracking around your legal process and to break this out into stages. Understanding how long negotiations of redlines are taking on your side and how long they are taking on their side will help you to understand where blockages exist so you can address them.


Contract Sent is not a law firm, this post and subsequent pages on this website do not constitute or contain legal advice. To understand whether or not the ideas and guidance on the Contract Sent website is applicable to your business, you should consult with a licensed attorney. The use and accessing of any resources contained within the Contract Sent site do not create an attorney-client relationship between the user and Contract Sent.

contract template library


Template Library

Download an MRR Waterfall Template
Download a SaaS Contract Template
Download an NDA Template

Startup Contract Management Tool

Contract Tracking

Document Comparison

Contract Storage


ABOUT THE AUTHOR
follow us on linkedin