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Traditional management processes are notorious for moving at a snail’s pace – which is why a modernized contract design approach is essential for your team in a time of increased speed. But using legacy processes, the cost of speed is far too high for most businesses to meet. Rather than hope for the best during execution, design your contracts to maintain value throughout the process.
eBook Download: The Economics of Contract Design
The average buyer expects faster, more convenient transactions than ever. Otherwise, they’ll find a competitor that offers seamless digital experiences. If your legal department is still working with legacy workflows and CLM solutions, you have the most to gain from designing your contracts for seamless acceptance.
Think about it: traditional contracting just doesn’t make sense in a world where speed and ease of use mean everything. But efficient contract design requires rethinking everything you thought you knew about contracting.
How much time it takes to craft your deals, how quickly your terms can be handed off to sales, and ultimately how easy it is to make your agreements legally enforceable. In its purest form, contracts designed for high-velocity deliver a satisfying experience to all people and parties involved. It leads to minimal costs and legal resource involvement. And it streamlines interdepartmental interactions – making the experience of working with sales and other teams as positive as possible without incurring a higher cost.
A rigid contract management approach can run your legal team – and your business – into a variety of problems, namely, bottlenecking, poor time management, excessive legal review, redlining of standard terms, just to name a few.
But, by approaching your contracts as an experience rather than just a legally binding set of terms and conditions, you can think through pain points more empathetically and create a solution that is both functional and provides an emotional lift internally.
For example, with terms management handled by a third-party vendor that tracks terms across your business channels, you can eliminate the anxiety of not knowing whether the latest versions of your agreements are being used. You can always keep track of who is accountable for each step in the process and whose hands your contract is in at all times.
Related Content: Why Contract Lifecycle Management Tools Aren't Enough
Approaching contract design with this mindset can you help you not only enforce and maintain the value in your legal agreements, but also you will cut down the overall cost of contracts, including labor.
Contracts that move and scale according to the needs of your business, while also maintaining security and meeting compliance needs, is ideal. This means designing contracts that can be presented in a digital-first way, that do not interfere with the transaction it governs, and that are bucketed based on whether they are one to one or one to many.
WEBINAR: The Economics of Contract Design
Contracts done the traditional way can cost as much as $5 million, according to IACCM. As is often the case for many companies, the ROI on complex enterprise contracts is far below what it needs to be to makes these contracts worthwhile. But in addition to a significant shift in mindset, redesigning your contracts for high velocity will require you to streamline and organize your contracts into personalized or standardized agreements. This will help you maintain the value of your agreements by determining time spent on a contract by the value it returns.
Rejecting the status quo when it comes to contracts will not only help your business innovate and remain competitive, but also move faster and reduce one of the biggest financial burdens on a business.
Related Content: How to Avoid Contract Value Leakage
Here are some ways you can adapt your contract to changes you need to make if you want to make high-velocity contract design a reality:
Rather than building custom terms for every potential deal or giving someone the opportunity to redline and review your language on their timeline, a more efficient process should ask your buyers/users to accept your terms from the beginning. That way, you eliminate the potential for changes that slow your work down or potentially impact the enforceability of your agreement.
A 100-page PDF or 10,000-word user agreement can be intimidating for anyone who is required to approve it – much less write and update it on a regular basis. So, it usually pays to redesign your contracts to be presented in new, dynamic ways that don’t require hours of reading and anxiety to accept.
Contracts sent via PDF or Word notoriously take longer to be accepted than contracts presented in a digitally native environment. Consider how you can implement tools and technologies that present contracts as seamlessly as you conduct the rest of your business.
For legal, the last step is definitely the most important one. After all, if you can’t keep track of who approved your terms, when they approved them, and which version they approved, you’re not going to have much luck enforcing your agreements in court should a lawsuit arise. Make sure you’re not trading convenience for a process that doesn’t help you prove affirmative assent at a granular level.
Recouping the cost of your contracts is far easier said than done. Particularly if your business is still heavily reliant on legacy processes to conduct simple day to day tasks. But bucketing your contracts by value and volume of signers can help reduce a ton of your internal costs associated with contracts.
To learn more about how to reclaim the value of your contracts, download our eBook, The Economics of Contract Design.