How To Avoid Peaks in Negotiation Cycles by Improving Team Collaboration
1. Introduction
Working towards an optimized negotiation process is not only a legal matter but requires effective collaboration between various teams. In my experience, the teams highlighted below have the most important role in negotiation cycles.
The general rule to involve all teams in your contract template creation and contract negotiations will always apply. As Legal is in the middle of these processes, we have written this series from the point of view of the Legal department.
Let’s dig deeper into the roles of the different teams involved in negotiating your own contracts.
2. 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁
Next to a focus on the strategic vision of the company, the management will encourage teams to sign as many customer contracts as possible. It will especially crucial for the management to have a seamless process with minimal involvement from management, except where agreed.
Main roles
In contract negotiation, the roles of the company’s management will be:
- · Strategic Vision
- · Risk Management
- · Stakeholder Alignment
- · Escalations / final decisions
Best practice: Establish a robust structure that defines Management’s role and involvement in decision-making processes. Explore and discuss refinement of contract processes and agree on key priorities.
3. Commercial Team
With this we mean for example Sales & Account Managers, Business Development Managers, Partnership Teams. As a sprinter nearing the finish line, the Commercial Team will race to close deals at the end of each quarter. Smoother processes will mean better results so Commercial Teams are usually more than willing to work towards improvements.
Main Roles:
In contract negotiation, the roles of the company’s commercial team will be:
- · Overall Overview and Responsibility for customer contracts
- · Relationship building / primary point of contact
- · Getting the deal done
- · Stakeholder Alignment
Early involvement and cooperation with other teams is imperative for Sales to avoid bottlenecks & peaks. In the cooperation with Legal, focus on (i) Setting Priorities, (ii) Contract Template Training and (iii) when & how to involve Legal.
4. 𝗟𝗲𝗴𝗮𝗹
In contract negotiations, the legal team navigates all legal advice and negotiations from a strategic point of view, with a goal to improve processes and reduce risks for the company.
Main roles:
In contract negotiation, the roles of the company’s legal team will be:
- · Contract Advice, Negotiation and Drafting
- · Risk Management of the company
- · Creation of contract templates / playbooks and contract process improvement
Best practice: Legal shines in drafting, advising and negotiation of contracts. Do not create gridlocks by making them the point person for each negotiation. Strategize with Sales when Legal should step in, which should mainly be for large or strategic customer contracts.
Conclusion
By carefully dividing roles and collaborating closely between teams, we are able to work on improving contract & negotiation processes. This also includes working better together to avoid end-of-quarter spikes before the holidays.
In our other articles about this topic, see 1, 2, 3 and 4 we dive deeper on the ways to improve the communication and collaboration between these teams.
Contract Negotiatons: How to Avoid Negotiation Peaks? Part 1
Negotiating commercial contracts is always a daunting task, but is particularly complicated at the end of Quarter. We have written a series of tips on how to avoid these negotiation peaks, using my experience gained on this topic since 2004, as I have found that now a great time to start preparing for the end of Q3 and especially for the highest peak of the year (end of Q4).
If we all embrace the goal of reaching a steady negotiation rhythm, we are able to unlock benefits like improved decision making, streamlined processes, more joy at work and stronger relationships. Replace rushed contract negotiations & discussions with a strategic plan that allows for efficient and optimal contract negotiations.
As Commercial Contracting Experts, we focus on the following two scenario’s:
Scenario 1: negotiating your own contracts with buyers of your Products & Services: Customer Contracts.
-Teams involved: Sales, Account Management, Legal, Finance, Management, etc.
Scenario 1: negotiating contract of other companies to buy their products: Vendor & Supplier Contracts.
-Teams involved: Procurement, Finance, Facility, IT, Legal, Management, etc.
Top 10 common Commercial Contracts
– Confidentiality Agreement (NDA)
– Order Form
– Master Services Agreement (MSA)
– General Terms & Conditions (GT&C)
– License Agreement
– Framework Agreement
– Partner Agreement (Reseller, Distribution, Incentive Agreement)
– Service Level Agreements (SLA)
– Statement of Work (SOW)
– Data Privacy Agreement (DPA)
First Tip: start your preparation & planning and list your priorities now.
Are the teams your work with aware that the contracts you are working on need to be signed soon – particulary before end of Q3 or Q4??
Contact your team members this week to inform them of any upcoming contract negotiations.
Four Critical Factors: The following four Critical Factors will prepare you to work towards a steady negotiation cycle:
1. Early Preparation, Planning and Prioritization
2. Communication & Cooperation
3. Standard Templates & Procedures.
4. Implement Legal Tech & Digital Solutions
Bonus: specific actions for the last weeks of each quarter.
In the next posts in this series we will provide you with the specifics of the four Critical Factors and share practical tips for the teams involved, especially Legal, Sales, Procurement and Management.
Canadian Court Recognizes👍as a Contract Agreement
As far as we are aware, a Canadian Court has made a first of its kind ruling relating to the acceptance of an emoji as a contract agreement. This is an interesting judgment to illustrate the developments relating to the acceptance of digital ways to approve contracts.
What was the verdict?
The Canadian Court Ruled that a 👍 Emoji Counts as a Contract Agreement. For details, please see https://lnkd.in/gyBrSAdn
The judge stated, amongst others, the following: “This court readily acknowledges that a 👍 emoji is a non-traditional means to ‘sign’ a document but nevertheless under these circumstances this was a valid way to convey the two purposes of a ‘signature’,” he wrote.
Correct decision?
What seems like an unusual verdict, actually makes a lot of sense looking at the facts in this specific case. After talking to each other on the phone, Kent (the Buyer) sends a copy of a contract as an offer to deliver the goods to him via text to Chris. Chris responds with a thumbs up.
Trend for the future
Without knowing the full background, this indeed looks like an agreement to enter into a contract (and agreeing to the contents of the contract). At least under Dutch law, depending on the circumstances of the case, this could reasonably be seen as entering into an agreement.
This is in line with other verdicts in the past years where offers and acceptance of these offers (agreement to contract) are accepted in digital form by e-mail, SMS, WhatsApp and other tech solutions like DocuSign etc. It is an important realization for everyone that the digital world is evolving and we need to adapt!
Lesson Learned
Next time you respond with (for example) 🚀 ✅ ✔️👍🏾🙏🏼 to a question or request to agree to an offer, be very mindful of your intentions.