Imagine a sales team at the final stage of closing a high-value contract, only to face delays from legal compliance. Disappointment sets in as both teams wonder how to improve collaboration. Often, the legal team focuses on risks and compliance, while the sales team pursues opportunities. 

But if these teams become strategic allies, the impact could be transformative. Successful collaboration between legal and sales can reduce bottlenecks, accelerate growth, minimize risks, and deliver stronger results. 

Today we will learn how legal can empower sales with proactive strategies, turning compliance from a barrier into a tool for faster decision-making.

What Are The General Points Of Friction Between The Sales And The Legal Team?

Having legal and sales teams on one side is a blessing for every firm, but reality is often on the flip side. While collaborating, both teams find themselves at odds due to their different approaches and functioning. Where the sales team is more dedicated to closing deals with high-value clients and overseeing legal aspects, the legal team often prioritizes risk mitigation and compliance with a contract. The difference in approach and objectives often leads to friction between the two.

Fast Deals Vs. Legal Compliance

As discussed earlier, the sales team is more target-oriented than compliance; hence, they aim to close deals to achieve targets. On the other hand, the legal team takes a more detailed approach to a contract. They review the contract to ensure compliance and protect the company’s interests. Hence, sometimes, the sales team might feel the legal team is a bottleneck in the deal closure process.

Risk Tolerance

The sales team often takes risks to close deals, especially with high-value clients, and ignores the long-term effect of the risk on the company. In contrast, the legal team works to minimize risk and enforce company policies to safeguard interests in the long run. In such scenarios, the legal team might perceive the sales team as too willing to take on risks, and the sales team might find the legal team over-cautious.

Contract Flexibility Vs. Rigid Terms

While dealing with clients, the sales team often prefers to tweak the contract terms to meet client demands and secure deals. Conversely, the legal team often insists on rigid contract terms to protect the company’s interests and avoid future liabilities. The sales team may feel constrained by the legal team’s contract rigidity. 

Contract Reality Vs. Client Commitments

The sales team often makes verbal commitments to clients that might differ from the company’s standard contract terms and conditions. Therefore, the legal team must ensure that all contract terms are aligned and comply with company policies. When the legal team revises contract terms to align with company policies, deals are often rejected, leading to conflicts between the two teams.

Priorities Vs. Focus

The legal team prioritizes long-term risk mitigation and regulatory compliance, which often contradicts the sales team’s immediate deal closures. This mismatch in priorities may generate conflicts between the two teams, leading to delayed sales cycles and deal rejection.

Need for Legal and Sales Collaboration

Collaborations between legal and sales departments have proven beneficial to firms by reducing the sales timeline, speeding up deal closures, and generating positive revenue outcomes. 

A study report highlighting how legal professionals perceive their relations with internal stakeholders shows they have a remarkable foundation for supporting the sales team. The report reveals that 74% of legal professionals believe they share positive communication with the sales team and collaborate effectively in closing deals. 

Hannele Korhonen on How Legal In-House Teams Can Enhance Collaboration

The two departments must work closely to ensure compliance with the contract rules and regulations at every stage and protect the organization from penalties and losses. When combined, the unique expertise of law and sales professionals creates a well-organized approach. Apart from contract management, here are a few more key points highlighting the need for legal and sales collaboration.

Accelerated Deal Closure

The sales team is always focused on closing deals, and the legal team always wants to optimize the contract review process to avoid sacrificing compliance. Hence, working closely can reduce back-and-forth delays and ensure faster deal closure.

Managing Risks and Compliance

The sales team in a firm is more likely to push for flexibility to meet customer demands, often without considering the underlying risks. The legal team ensures contracts comply with regulations. Their collaboration can help win deals without compromising the legal aspect of the contract.

“First, I worked on setting up contract templates and contracting guidelines that every lawyer in the team dealing with contracts must use and follow. Doing so, we were able to bring in a lot of order to the system.”
‍
~ Bhavna Singh, GC and DPO, Subex Limited
‍Streamlining Legal Processes: Advice from 7 GCs and Heads of Legal

Improving Negotiations

If we go by the quote, the legal team in a firm continually formulates guidelines and templates that outline the acceptable contract terms first. On the other hand, the sales team often negotiate terms to close deals early without legal oversight. Joint efforts produce more favorable contract outcomes with wins and protect company interests.

Also read:  Building a Holistic Procurement Contract Management Process.

How To Improve Collaboration Between Legal And Procurement Teams?

Procurement contract management is a process involving the creation, execution, and monitoring of contracts related to the procurement of goods and services. It ensures the alignment of agreements with the business objectives, terms, and policies while optimizing risks. Therefore, legal and sales collaboration is a much-required force that optimizes the contract management process. 

Also read: Procurement Contract Management: What You Need to Know.

However, as we discussed earlier, friction points always make the collaboration between the two difficult. However, here are some strategies a firm can adopt to mitigate these friction points and initiate a successful collaboration. Some of the ways include:

#1 Maintaining Regular Communications by Establishing Clear Communication Channels

Communication is the key to any successful collaboration. The Legal and Sales teams should be easily accessible to each other, enabling on-time collaborations and avoiding delays in the decision-making process. Therefore, clear communication channels between the teams for effective collaboration are of paramount importance.

“Some companies just think of legal as a bit of a blocker, but we're quite the enabler if we do it right.”
‍
~ Adam Glick, Ex-Head of Legal, Intercom
‍Enabling Business-Legal Collaboration: Advice from 7 GCs

As quoted above, most companies and people indeed think of the legal team as a blocker. Still, regular meetings and open discussions help avoid these misconceptions, promote a collaborative culture and ensure alignment between the team members, thereby preventing misunderstandings that could hinder progress. Transparent sharing of information facilitates informed decision-making. Collaborative platforms such as chats, emails, and project management tools often come into play regarding communication efficiency. 

#2 Formulating Shared Goals and KPIs

Firms need to outline clear goals before assigning work to the teams for a successful collaboration. It should clearly state the goals including avoiding future conflicts and misconceptions. The goals may include better contract quality, reduced contract review time, less error rates, and turnaround time of contracts.

Furthermore, Key Performance Indicators (KPIs) also help align the incentives of both teams, promoting healthy collaborations rather than conflicts. 

#3 Implementing the Use of Collaborative Platforms and Tools

Collaborative tools promote effective legal and sales collaboration. Both teams can benefit greatly from using Contract Life Cycle Management (CLM) software, which makes access to all contract information as easy as one click. Moreover, with CLM’s shared dashboard feature both teams can track changes, monitor progress, know contract status, and identify hindrances well in advance.

Platforms like Google Docs and Microsoft 365 make collaborative real-time document designing easy, allowing both teams to work on contracts simultaneously and make changes whenever necessary. It also optimizes workflows and allows the seamless sharing of information across teams. 

#4 Organizing Regular Interdepartmental Training and Skill Development Programs

Cross-training is needed for a successful collaboration between team members. It develops a deeper understanding of each other’s processes and objectives, improving efficiency and teamwork. 

The regular joint training ensures the alignment of legal and sales teams, promoting common goals and transparent information sharing. It also facilitates knowledge sharing, enabling professionals to leverage each other’s expertise and enhance strategies to increase winning deals.

It is also essential to establish a regular feedback mechanism where both teams can share their experiences and the challenges they face working in collaboration. This helps refine and optimize the process. 

How CLM Brings Legal and Sales Together?

Contract Lifecycle Management Software is designed to optimize and automate the entire contract value chain. It helps teams come together to form contracts and execute the same. It optimizes the contract management process, reducing risks and improving contract compliance.

“Leveraging a CLM has been key because it has reduced a lot of friction from handoffs between legal and business. Rather than going back and forth over email, Slack, Word, Zoom, DocuSign, and a whole tech stack, the CLM acts as a single source of truth. We have a whole intranet with resources and a legal services request form with 10 different questions so we get all the information upfront and don't have to go back to ask follow-up questions.”
‍
~ Jonathan Franz, Head of Legal, Crunchbase
‍Enabling Business-Legal Collaboration: Advice from 7 GCs

CLM software bridges the gap between the legal and sales teams by optimizing the contract management process. Collaboration with CLM has added benefits as mentioned below.

1. Fast Approvals and Execution: With the CLM tool contract generation can be enhanced with pre-approved guidelines, templates, and workflows. The legal team sets pre-defined contract templates, and objectives on a CLM platform, enabling the sales team to formulate faster. 

2. A Centralized Repository: The CLM platform acts as a centralized storage for contracts with document-sharing features. It helps both teams access previous contracts for reference. The sales team can use the previous contracts for new contract formation and negotiations, whereas the legal team can use it for tracking risks and compliance.

3. Improved Communication: The CLM provides better collaborations by enabling transparency in the contract approval process. It allows both teams to check for any changes made in the contract or issues being addressed. The legal team can communicate more effectively with the sales team using the comment feature available on the CLM platform. It eliminates the communication barrier between teams and establishes effective collaborations.

4. Data-Driven Decision-Making: The CLM tool provides interactive dashboards and insights to make effective decisions. It allows the sales team to adjust sales strategies, understand closure times, and predict the date of contract signing. On the other hand, it will enable the legal team to identify risk patterns and mitigate them, thereby increasing collaborations. Both teams can use data for more informed decision-making and refine their strategies and approaches.

Also read: Why Your Procurement Team Will Find SpotDraft CLM Solution Useful.

Build Successful Collaborations With SpotDraft Plug-in

Effective collaboration between legal and sales teams is vital for all businesses to ensure smooth operations concerning contract formulation and management. However, it can be challenging, and that’s when the SpotDraft plug-in comes into play.

SpotDraft’s plug-in helps streamline your contract management process directly from your Gmail inbox. It is a game-changer for teams looking for tools to manage their contracts without leaving their mail interface. The plug-in allows you to upload contract documents directly from your mail to the CLM, thereby increasing efficiency and mitigating risks of data loss. Click here to learn more and schedule a demo today!

FAQs

Q.1. How does legal and sales collaboration benefit financially to an organization?

Legal and sales collaboration helps streamline contract processes, reduce compliance risks, and accelerate deal closures, leading to increased revenue and cost savings. This ensures smoother negotiations, fewer disputes, and stronger client relationships, enhancing overall financial performance. 

Q.2. How do you enable your sales team through legal assistance?

Sales teams are enabled by providing clear contract templates, swift contract review processes, and legal training on compliance. This ensures they can negotiate deals confidently while minimizing risks and aligning with company policies.

‍