5 Tips How to Get Contracts Signed Faster

Introduction – Why Does It Take So Long To Get Contracts Signed?

The steps from negotiating a contract to signing takes time because of compromises that need to be reached between parties. In B2B negotiations, this is usually also caused by processes that are in place to negotiate and handle contracts. This is why it is so important to implement new processes and make better templates to sign contracts faster in your company.

5 Tips to Get Contracts Signed Faster

After 20 years of experience in this field, I have noticed that the same 5 things will help speed up the contract process from the negotiation stage to the signing stage. Working with many of the Big Tech companies like NVIDIA, Microsoft, Tesla, Google etc., I have learned that they all use the same approach.

It takes a lot of effort to improve contract processes, but we have summarized it in a list of five rules to follow. We have implemented this approach in many companies, and it always works. These steps will make contract processes more enjoyable and efficient.

Hereby our five recommended steps to take to get your contracts signed at least 50 % faster.

1. Work towards the 80/20 Rule of Contract Negotiation

The first rule is the 80/20 Rule which is a guideline for how legal departments should allocate their time and resources when dealing with contracts. Simply said, it means that you train your team to ensure that 80% of your contracts follows the standard template, meaning that only 20% of your contracts is able to be negotiated. A break-down of the best way to set up this 80/20 Rule is as follows:

80 % of contracts: No legal involvement

Your company has ensured that your standard templates contracts are straightforward and standardized enough that they can be handled without any input from the legal team. This includes routine agreements or contracts that follow a well-established template. The idea is to empower the commercial team and relieve legal resources by allowing non-legal staff to manage these contracts.

10 % of contracts: Light Touch of Legal Involvement in the background

These contracts require some legal oversight, but not extensive involvement. The legal team might review the documents briefly or provide occasional guidance. Legal will be the advisor in the background, ensuring that there are no major issues without being heavily involved in the drafting or negotiation process.

Remaining 10 % of contracts: Legal is actively involved

These are the most complex or high-risk contracts that demand significant input from the legal team. Legal professionals will be actively involved in drafting, negotiating, and finalizing these agreements. This ensures that potential legal risks are thoroughly assessed and mitigated.

In essence, the 80/20 Rule in this context is about optimizing the use of legal resources to make the contract management process faster and more efficient. By categorizing contracts based on the required level of legal involvement, organizations can streamline operations, reduce bottlenecks, and ensure that critical legal oversight is available where it is most needed.

2. Create Easy-to-Use Templates

The second rule concerns the importance of using simple, easily usable contract templates. To be persistent with the first rule of dividing up the contractual work between legal and non-legal departments, this rule is crucial, as you focus on contract standards that are straightforward, market practice and user-friendly. This means less comments by external legal departments and it allows non-legal staff to handle contracts with minimal confusion and delays.

To ensure that your contract templates stay simple in daily use, please see the following checklist of contract templates that might need attention:

• Traditional contracts: If you’re still using traditional contracts, consider shifting to an Order Form or similar that references to a General Terms & Conditions, a Master Service Agreement (MSA), or a standard Customer Agreement.
• Separate documents for each country: Using separate contract templates for different countries can complicate the process. That does not have to be the case though, as a template that can be universally applied with some minor adjustments works just as well. That can reduce the complexity when dealing with contracts in more countries.
• Overly Complicated Templates covering all potential risks: If every possible risk is addressed, the template can be too complicated and difficult to use. If a more standardized template that cover the most common and significant risks is used, it is more user-friendly.

If your current templates fall into any of the above categories, you might want to consider revising them to make them simpler and more efficient as that will save time and reduce misunderstandings. That leads to a more efficient contract management process which will save you so much time.

Another step apart from simplifying your templates that can make the process more efficient is to create playbooks. The aim of the Playbooks is to explain and provide alternatives to common clauses. Using Standard Questionnaires is another way of making the process easier. This can reduce the need for lengthy explanations and back-and-forth communications.

By creating easy-to-use contract templates and accompanying tools like playbooks and standard questionnaires, you can significantly reduce the time and effort needed to handle contracts. This approach supports the division of contractual work as outlined in the first rule, making the entire process more efficient and less reliant on legal intervention for most contracts.

3. Delegate Most Legal Work to Commercial Teams

This step stresses the importance of delegating the contract management and negotiation of contracts to the contract owners, i.e. usually the Sales and/or Procurement teams. This delegation aims to streamline processes and empower non-legal departments to handle contracts effectively. This will work especially well if they are provided with great templates (including where possible playbooks)

By shifting the responsibility of contract management and negotiation to the contract owners, they can handle the bulk of the contractual work independently. As the Sales and Procurement teams usually are responsible for initiating, negotiating and managing contracts related to their function, this empowerment is only natural. As Sales and Procurement teams are closer to the commercial aspects of the contracts, they can negotiate more effectively and tailor the terms to meet business need.

This reduces reliance on the legal department solely for every contract-related task and speeds up the process as those departments usually are more flexible than legal.

This delegation streamlines the contract process, optimizes resource use, and ensures faster and more efficient contract handling.

4. Open Communication between Legal and Commercial Teams

The next tip emphasizes the importance of involving relevant teams in the development and implementation of new contract templates and standards. Additionally, teams should meet regularly to keep communicate opportunities to improve the templates and the processes.

When implementing new contract templates, the top-down approach (meaning that teams are forced to use new templates or new ways of working) does not work.

This approach often leads to resistance from the other teams. Instead, when issuing new contract templates or standards, a pro-tip is to actually involve the other teams of the organization and teach them how to use them in their day-to-day work. Doing this might seem inefficient, but involving the teams that will use the new templates and standards is paramount to create practical, user-friendly templates..

Team Involvement

There are many positive ways to involve the team in the development of templates, but most importantly:

• When non-legal team members are involved in the development of the templates, they will be more likely to advocate the correct use of the templates,
• Ask non-legal colleagues if the templates are easy to understand, and change where necessary, which will increase and it is more likely that departments will use the templates,
• If Sales and/or Procurement teams have the opportunity to provide input and feedback, the templates will remain up to date,
• Regular training to inform the teams about the development of templates and asking for input is the key to success.

A top-down approach to impose new contract templates and standards does not work.

As we have noticed in practice and as shown in research, providing training to e.g. Sales and Procurement Teams, while continuously collecting and incorporating feedback, leads to higher adoption rates, improved compliance and more efficient contract management.

This collaborative approach fosters a sense of ownership and engagement among all stakeholders of the company.

5. Create Legal Landing Page and Implement Legal Tech

The last tip to improve and ensure efficiency in contract management and negotiation is (i) to create a centralized repository where all standards are located and (ii) implement legal tech in your organization.

Legal Landing Page

Start with the creation of a legal landing page, which is a centralized repository where all legal templates, guidelines and resources are easily accessible. This helps streamline the process of making deals and ensures that everyone is using the correct and most recent templates. Additionally, it reduces delays and confusion in the organization.

“Where can I find that template again?”

Some examples of essential templates to include in the legal landing page include the following documents:

• NDA
• Order Form
• General Terms and Conditions (T&C) / Master Services Agreement (MSA) / Terms of Use Agreement (ToU)
• Customer Agreement
• Data Privacy Agreement
• Privacy Policy
• Partner Agreement
• Amendment/Variation Agreement

The best approach is to include the most used contract templates in the legal landing page for it to be used the most efficient.

Legal Technology

Once you have implemented the Legal Landing Page and take other steps to improve the legal processes of the company, it is time to implement legal tech in the organization. If you have the budget, invest in a contract management system to centralize, track, and manage all templates and all specific contracts. This improves efficiency, compliance, and accessibility of contract information.

Creating a legal landing page and implementing legal tech can significantly enhance the efficiency and effectiveness of a smaller organization’s legal processes. By providing easy access to essential templates and automating routine tasks, employees can handle many legal functions independently, ensuring consistency, compliance, and scalability. This approach not only empowers teams but also frees up the legal department to focus on more complex and high-value tasks.

Reach out to us at AMST Legal at rreggers@amstlegal.com or call on +31 6 5060 8964 for tips to improve your legal processes or negotiate your contracts.