Sales and Legal Are a Crucial Partnership
April 20, 2022
On first impression, the notion of Sales and Legal teams working together, laser-focused on achieving the same goals may seem like entering the Twilight Zone. However, on closer look, it becomes apparent that for a successful, growing and thriving business, not only do Sales and Legal teams need to work well together to achieve mutual goals; it is imperative that they do so.
We all know that Sales drives revenue and Legal focuses on reducing risk and ensuring compliance. On the surface, it is easy to see how the mission of driving revenue and closing deals as quickly as possible from month-to-month, quarter-to-quarter and throughout the year could inevitably clash with the mission of limiting risk and ensuring compliance, which inherently implies taking one’s time. After all, Sales needs to close deals and hit numbers. Who has the time to deal with the proverbial red tape and legal-speak when deals need to be made?
Well… maybe not so fast!
When a deal closes with terms and conditions that are not properly reviewed by the Legal team, significant business risk may be introduced into the equation. This risk exposure could have been avoided or mitigated if Legal had been consulted and brought into the conversation sooner. Terms and conditions that are accepted without adequate Legal review can lead to significant fines and penalties, damage to business reputation and loss of future business. As a result, this may lead to fewer deals being closed and loss of booked revenue over time.
The convergence between Sales and Legal have the makings of a pairing that is not so unlikely at all, and indeed, is a symbiotic match often crucial to the success, prosperity and longevity of the business.
A healthy, growing and thriving business needs booked revenue and risk management. When a business identifies the necessity of having an empowered Sales team and an empowered Legal team that are active partners in forging the path forward for the business, a true partnership is formed. When this partnership is nurtured, the business truly benefits in turn, with increased bookings and revenue in parallel with compliance management and risk mitigation.
So how do we build this partnership to work together to grow the business, hit numbers and protect the company from undue risk all at the same time?
The key to success is building relationships through open and effective communication, and this responsibility belongs to both Legal and Sales.
So…what can Legal do to help build this partnership?
Let’s be honest. Lawyers do not always speak in easy-to-understand terms, and contracts are sometimes filled with complicated provisions that are impossible to navigate without a copy of Black’s Law Dictionary nearby. Sales needs to focus on driving revenue and hitting numbers.
Legal should not expect Sales to understand every provision in a contract. After all, that is their job, not the responsibility of Sales!
Legal should reach out and engage with Sales to explain the “why” behind their position on terms that have enormous consequences for the growth and success of the company. Education is key to building an understanding and common ground, and Legal should not expect that Sales understands the “why” without providing information related to the nature of specific contractual risks and potential liability the business faces when signing every deal.
Legal should be an active partner within the business, not a passive, “necessary evil.” Legal is a key player at the table, contributing their unique experience, skillset and perspective to discussions related to business development and growth. At DemandScience, the Legal team embraces a multi-disciplinary approach to problem solving and exist to support business growth. Their unique perspective assists in ensuring the business is compliant with company policies and US and global laws and regulations and that the business does not assume undue risk in its contracting.
Legal should be transparent. Legal must also create an open dialogue with Sales regarding the status of a negotiation, estimated timing in completing a review and the reason why Legal takes the positions that it takes with redlines and negotiation strategy.
So… what can Sales do to help build this partnership?
Sales should not avoid involving Legal to “save time.” If you have a customer push back on key terms of the deal, asking questions about specific terms such as those involving data privacy, liability caps or intellectual property ownership, or redline terms and conditions, the sooner you reach out to the Legal team, the sooner they can ascertain the issues, conduct an informed analysis, and respond, in kind.
Sales should bring Legal into the discussion early. Open communication is key. Legal cannot help if the team does not know what is on the drawing board. There might be contractual, legal or compliance issues involved with new deals that are in the exploratory or planning stage. A new template may need to be drafted for new business opportunities in the pipeline. The sooner Legal gets involved in the discussion, the sooner Legal and Sales can work together on a path forward that closes the deal and protects the best interests of the business.
Sales should focus on building and maintaining great customer relationships! Let Legal play “the heavy.” By bringing Legal into the discussion to handle negotiation of points of contention, this helps preserve the relationship built with the customer and leaves the difficult discussions to Legal to handle.
Sales should make full use of the partnership by following the processes in place for communicating with Legal through a contract management tool, such as Conga. There are comprehensive trainings available and the Legal team should always be happy to provide a refresher training on process. If the proper process is not followed, Legal may not know there is a pending agreement to review or comments of a customer requiring a response. Timely communication through established processes is a must to keep the deal moving towards closure!
Communication is key! As we’ve discussed, lack of communication and lack of collaboration between Sales and Legal can result in slowing momentum on deals and lost opportunities to maximize efficiencies, grow revenue and protect the business from risk.
The pairing between Sales and Legal may not seem intuitive on the surface, but at the end of the day, it makes a lot of sense! Both teams are working to build and grow the business and position it for great success. Sales focuses on hitting numbers and raising revenue, and Legal focuses on risk mitigation and compliance. Both functions are crucial for companies to reach common goals. Working together, Legal and Sales can truly help build a healthy and profitable business.