How Ironclad Cut Its Sales Contracting Time in Half

Contracting is how business gets done. A strong conviction in that belief is why we built Ironclad CLM, and it’s why we use it for our own contracting needs. As builders and users, teams across our organization have unique perspectives on making the most of the Ironclad platform. We want to share those perspectives with you in our new Ironclad Blueprints series. 

In part two, we take a closer look at the legal team’s strategy around reducing negotiation on our standard customer agreements.

The objective: a balance between sales acceleration and risk reduction

Aligning sales speed and legal review is a balancing act. Tip the scales too far to sales enablement, and you may open your organization to risk through agreements and workflows that lack standardization and intentionality. However, involving a lean legal team in every sales contracting touchpoint at a high-growth company isn’t scalable.

This is the crossroads at which Ironclad found itself a few years ago, with two commercial lawyers supporting a 100+ person sales organization. We knew we needed a scalable legal review process that empowered the sales team without compromising legal standards. We also wanted to focus legal team resources on more strategic and valuable work, not templatized sales agreements.

Legal’s key priorities

In designing the Sales Order Form workflow, we identified three priorities:

Reduce redlines

Back-and-forth edits were slowing down deals and eating up commercial legal resources. We knew there had to be a way to limit redlining.

Align with revenue

With our lean legal team and high growth, there was no way we could get involved with every agreement. In service of reducing customer acquisition costs (CAC), we needed to ensure that we dedicated legal resources to the agreements most closely tied to revenue.

Scale responsibly 

We wanted to reduce sales team lift and standardize agreements to reduce risk exposure. In short, the collaboration between legal and sales needed to be scalable and automated, but not at the expense of compliance.

The solution: standardization for seamless collaboration

Because the Sales Order Form Workflow is a highly-collaborative business process, we knew that on the legal side, we’d need to facilitate seamless movement between multiple systems (Salesforce, CPQ, Ironclad, and eSignature), internal legal and business approvers, and occasionally outside counsel. We also wanted to change the stereotype that legal is a “black hole” that contracts vanish into.

To do both, we leveraged a few key Ironclad features and implemented new internal contracting guidelines to create the process captured below:

Ironclad features 

Conditional role assignments: The legal team is a conditional approver on all workflows, which means that if the template is accepted as-is, legal is never involved in the deal. Should the deal require legal involvement, each stakeholder gets notified when it’s their turn to act on an agreement. This feature also let us dynamically assign deals based on revenue and complexity—like whether there are ancillary papers—to internal and external resources.

Collaboration features: By leveraging collaboration features like Activity Feed (which tracks internal and external negotiation history), Internal Comments, Ad Hoc Approver (for subject matter experts like security or privacy teams) and drafting features like version history, the Microsoft Word integration, or quick edit using Ironclad Editor, team members always have visibility into the context around contracting activities. This reduces the time and effort it takes to complete the contract. And even better, the workflow provides a simple, straightforward place for the team to review the negotiation history in the future.

Term management: When our standard online terms are incorporated into a deal, our record of each version of the terms is tracked in our Legal Center, so we always know which terms applied to any given deal. And when those terms need to be negotiated, we are able to dynamically attach the terms to the workflow for revision, or even replace them with third- party paper.  Not only is it effortless to incorporate the latest terms, negotiation data (i.e. the percentage of contracts negotiated or third-party paper reviewed) is at our fingertips at the end of each fiscal quarter.

Ironclad Dashboard: Our team individually adjusts Dashboard views to prioritize deals for review based on revenue, term length, etc. This allows us to tackle higher-revenue, longer-term deals quickly and align resources to revenue. And because the Dashboard will surface accurate commercial data via our Salesforce integration, we can operate effectively without leaving Ironclad, legal’s preferred negotiation tool.

AI Playbooks: To help us move more quickly through the growing number of contracts, especially third-party paper that typically requires line-by-line review, Ironclad AI Playbooks flags potential issues for review and detects non-standard terms that require approval. This feature also assists contractors or outside counsel to engage dynamically with the documents, reducing involvement from in-house team members.

Contracting guidelines

For the process transformation to be successful, we also defined and implemented right-sized guidelines that are reinforced by the Ironclad features.

Templatized workflows

We created a standardized template with reasonable terms that have been tested and successful over time, to save time at the beginning of each deal. As a bonus, starting with a friendly contract signals to counterparties that you are looking for a partnership rather than just a transaction and tends to reduce your counterparty’s appetite for negotiation. We also incentivize the use of our template by providing shorter SLAs for review compared to third party paper.

No-negotiation threshold

We implemented a “no-negotiation” threshold into our redline policy, meaning that Ironclad will not negotiate agreement terms for sales contracts below a certain dollar value. The combination of commercial data synced with Salesforce CPQ and contracting data in Ironclad gives us the data we need to track our redline rate, assess it against deal value, and then make a data-informed decision about the right dollar amount for the threshold.

Online terms

We moved our terms to an online Legal Center controlled directly by our legal team. Putting terms online reinforces the concept that they are standard and adds a bit of a barrier to making edits.

The results: faster contracting and a lower risk profile

The process changes the team made to the legal side of the Sales Order Form Workflow have accelerated revenue and created one very happy commercial legal team.

Speed and nimbleness

On average, 70% of our commercial deals are closed without legal review, which means the sales team can move fast while the legal team pays extra attention to higher revenue, more complex deals. Less legal review also means less deviation to our standard terms, reducing all kinds of financial, regulatory, and performance risks to our company.

“Collaborating with the commercial team and organization as a whole is seamless. I really feel like Ironclad enables us to drive company goals as a team rather than pushing papers through systems and processes,” Laura Garcia, our Head of Commercial. noted.

The changes have also saved time, lowering CAC. Since implementing our redline threshold, it takes half of the time to complete a workflow with a non-negotiated agreement. This saves an average of 23 days per year for our sales team, allowing us to focus that time on other deals.

Risk management

Dashboard insights have also helped us review and improve templates each quarter. We can see which sections have been heavily negotiated to find where to make clarifications or concessions based on our current risk profile. We monitor customer reaction closely, too, and have seen incredible results in time-to-completion and acceptance.

All in all, our Ironclad commercial workflows achieve business objectives without burdening the team. Jo Golub, Ironclad’s Sr. Director of Legal shares that, “At Ironclad, our team wanted to get ahead of the growth we knew was coming. Technology, coupled with strong processes, really lays a solid foundation for not only the legal team, but the entire go-to-market function.  Our lawyers are leading the way in moving beyond stubborn misperceptions about in-house legal, demonstrating that we are true strategic partners to the business. Moreover, with this approach, we can process a higher volume of deals than a lean team our size would be expected to manage, all while continuing to love our work.”