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Considering your business probably manages thousands of agreements at any given time, a well-thought and planned approach to contracts can deliver millions of dollars back to your company – as well as a new level of legal security that all but guarantees the enforceability of your agreements. Making your contracts less costly and more legally enforceable takes work, but the investment is worth it.
eBook Download: The Economics of Contract Design
To make these advantages happen, here are three additional recommendations we suggest.
One relatively painless undertaking to reduce the costs of your contracts is standardizing your agreements and automating the terms that get included in specific contracts. For example, deals below a certain value can be dynamically populated to include specific terms relevant to each transaction. And with the terms standardized in this way, legal teams don't need to put these agreements through the approval flow over and over again.
This provides an opportunity for sales people (or whichever team will be using variations of the agreement) to have more autonomy when it comes to presenting an agreement and collecting acceptance. Legal will no longer function as a bottleneck, and business will become streamlined and able to move faster.
Related Content: Designing Your Contracts to Retain Value
Even better, since your standardized agreements will not have to go through an approval flow over and over, the amount you spend on the contracts themselves will steadily decrease. Legal will be freed up to focus on high value, personalized agreements.
One oft-overlooked detail of efficient contracting is how you present your terms to customers. Because it can, and usually does, affect how a user or buyer interacts with it when it comes to approval. Sending out a Word document or PDF signals to someone that your terms are up for negotiation – adding hours or days of work to your plate for every agreement you’re managing.
By implementing a clickwrap agreement or some other form of one-click digital contract acceptance, your signers are more likely to agree to your terms as-is, then and there. The shorter turnaround time of a digitally native agreement reduces the cost of the contract and increases long term ROI. In addition, being able to send and accept agreements digitally, track and audit them, and store them in a centralized location bodes well for possible future litigation.
Eliminating manual inputs is a tenet of some modern contract processes. And a big step toward that goal is getting your team out of the Signing Mindset – the traditional way of thinking that a signature is only possible through heavy negotiations and multiple interactions first.
While no organization is likely to move away from these personalized agreements entirely, legal needs to lead the charge in moving toward an Acceptance Mindset where contracts can be fully automated, seamlessly delivered, and accepted with just one click or press of a button. By doing so, you maximize efficiency while minimizing the costs involved in managing deals and tracking assent.
Related Content: The Acceptance Mindset for Legal Teams
The Acceptance Mindset ensures that you deliver a more modern, user-friendly experience. It helps you recognize the value and strategic worth of your work. Done well, it keeps your team’s involvement focused on only the most impactful, high-dollar deals your business deals with. The rest of your hard work is largely taken care of.
Your traditional way of doing contracts is robbing your company blind. You are leaving money on the table when you use complex contract processes because of the amount of labor that goes into them and the time it takes to complete the process. But by standardizing your agreements, being strategic in your presentation, and embracing the acceptance mindset, your legal team can start to see a reduction in legal costs.
For more on ways to manage the cost of your contracts better, check out our eBook, The Economics of Contract Design.