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Five signs your contract process is broken

Luke Richards, 21 May 2020

Contract magic

As an account executive at Juro, I talk to in-house lawyers every day. What I’ve discovered is that they face so many of the same misconceptions and challenges with their contract process.

The most common misconception I hear is that legal teams think the contract process isn’t yet a problem for them. Lawyers believe that they don’t have the volume of business or scale of operations to consider a solution for their contract process. Usually, when I dig a little deeper, it becomes apparent that the problems already exist in other parts of the business, and legal don’t have visibility on those challenges.

Here are five signs that your contract process is broken.

1. No central source of truth 🔎

Everyone in the business needs to report. I’m in sales, so I report from Salesforce on my sales pipeline. Similarly, lawyers need to be able to efficiently report on their contract workflow, but without devoting two or three days’ worth of time to finding all the data. 

Funding rounds are a great example of this. When businesses approach a funding round, they have lots of due diligence to tackle and contracts to collect. That job falls on one or two people in the company, in finance, operation, or, most likely, legal. When speaking to legal teams in this situation, I usually ask about the ‘hows’ of this process: how do you start? How do you keep track of all your contracts? Are they all in the same place? How do you ensure that you’re ready for investors to take a look?

I hear similar responses every time: the legal team couldn’t find all the contracts they needed in the CRM. Then they turned to Google Drive, but they weren’t sure if the versions stored in that drive were up to date or approved by the counterparty. Spread across the company’s systems, there’s just this lost wardrobe of contracts that don’t sit together - and it takes days or weeks to try to pull that information together. 

This happened recently with a prospect I spoke to, who spent several weeks trying to piece together all this information for a funding round, when really, that time could’ve been dedicated towards high-value work, like strategy and key legal terms. If you have to turn towards more than one source of truth to find your contracts, you don’t have an effective contract process.

Find out how we helped Masabi create a single source of truth for their contracts.

2. Friction between teams 😬

Legal teams are necessarily risk-averse. They can sometimes feel that sales are too reliant on them for low-value contract work, which is a problem when legal resource is already stretched. And conversely, salespeople need to move fast. They think legal teams spend too long drafting or negotiating sales contracts, with minimal visibility into their workflow. Unrealistic expectations on both sides can lead to friction, and a worst-case scenario where sales avoid legal involvement entirely. That’s a huge risk, and a clear sign your contract process has gone wrong. 

“A backlog of tasks can slow the business down. If there are processes that could be automated to change this, it’s hard to think of a good reason why this shouldn’t happen”

 

For fast-growing companies, Juro can be a central component in defining what that contract process should look like. Our legal customers have admin rights over the templates in Juro and can enable a self-serve workflow where sales teams can easily create their own contracts without taking up too much of their time. If I’m working on a contract in Juro, I know where it needs to go once I’ve drafted it, and I quickly see the contract’s status at any point. Both sales and legal have a clear understanding of ownership and approval rights, avoiding friction altogether.

Shieldpay used Juro to empower the commercial team and close deals faster. Find out how.

3. Growing backlog of legal tasks 📚

Whoever you are, in any business, the chances are you have a million-and-one things to complete before 5pm on a Friday! For lawyers, too often this list is inflated by low-value work, like drafting low-risk documents and reviewing terms. These small, administrative tasks impact on your ability to focus on high-priority tasks in your pipeline, so you place them all at the bottom of your ‘to do’ list. The problem is, they’re still important, and other teams might be reliant on you to check over their work before they can progress.

I recently spoke to a lawyer at an accounting company. He was the sole counsel in the business, and under huge pressure from the sales team. He felt like he was blocking the business due to his ever-expanding backlog. He would receive a request from a salesperson, and then midway through completion he’d receive another, seemingly more urgent request from a different member of the team, which he would then have to prioritise. 

This backlog of tasks can slow the business down, especially if you’re a sole counsel trying to handle requests from every side of the business. If there are processes that could be automated to change this, it’s hard to think of a good reason why this shouldn’t happen.

Find out how Habito used Juro to ease the burden off the legal team and automate the contract process.

4. Slow contract cycle 🐌

It’s common to see a company’s average sales cycle sitting at something like 90 days. But often if I dig a little deeper in discovery, I notice that a third of that time is actually spent at the contract negotiation stage. This involves legal input, back-and-forth email chains, messy redlining in a Word document, files going in and out of PDF formats and DocuSign, a lack of version control, and a fundamental lack of clarity. This is a telltale sign that the contract process implemented for agreeing and closing contracts isn’t working, which can ultimately impact revenue growth.

We often implement Juro to replace a manual process, heavy on Microsoft Word, email, DocuSign, and plenty of friction slowing down sales cycles. Having every stage of the process in a single platform like Juro can really streamline the workflow - users can track changes in real time and communicate openly and clearly with the counterparty. 

A great example of this is our work with Unbabel, where we implemented Juro and shortened the sales cycle by 30 per cent. 

5. Missed renewal deadlines ⏰

Have you ever been stung by the Amazon Prime renewal? It’s so easy to order an item from Amazon, forget about the free trial, and accidentally end up as a paying customer. 

Accidental renewals are situations where you’re under a trial period with a vendor, and you end up getting charged because you passed the deadline to terminate that subscription. In the context of the legal team at a scaleup, problems with renewal dates indicate that something’s gone wrong with your contract process - you might end up paying for something you don't need. Similarly, if you have contracts with paying customers and those contracts contain certain deliverables you need to meet by certain dates, you need to ensure this is flagged properly. Having that information live only on a private Trello board, in your notes, or worse, in your head, can place the business at risk. 

“Decision-makers don’t have to hit a reset button and start from the ground up to make tangible improvements to contracts”

In Juro, you can create a specific alert for dates and other information in a document using the data dashboard, which creates a customizable dashboard view based on the metadata in your contract. You can also tag deliverables and obligations within a contract and track the deadlines that you need to meet within a certain timeframe.

Discover how we helped Eton Shirts ‘eat the elephant’ and manage contract renewals.

Focus on the quick wins

When looking to mitigate these challenges and fix your contract process, I would recommend focusing on the quick wins. Decision-makers don’t have to hit a reset button and start from the ground up to make tangible improvements to contracts. They don’t have to involve 150 employees, or stop everyone in the business from doing their work to participate in a huge project. 

Improvements to your contract process can be as simple as delegating tasks and enabling other teams to self-serve. Just because it seems like it’s a big decision to make, doesn’t mean it needs to disrupt the business. Address the issues early on - because the pain in the company’s infancy will only escalate as the business scales. Remember that the quick wins can make a big difference to your contract process, and set legal and the wider business up for success. 

Request a demo to see how Juro can fix your contract process, enabling you to agree and manage contracts faster.

Topics: Contract magic

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