Contract negotiation is a crucial function to all modern businesses. It ensures that both parties have their needs recognized and met during their contractual relationship.
But as a business grows, the negotiation process can become more time consuming, and legal resources struggle to keep up with the contract needs of a scaling business.
To make matters worse, some of the negotiation is often repetitive and unnecessary. Legal teams are spending their valuable time redlining standard term contracts and tweaking minor items on low-value contracts.
As in-house counsel, you feel as if your time would be better spent elsewhere – like negotiating contracts that will have a stronger impact on your business. If it wasn’t such an important part of protecting the needs of the company, you’d probably skip negotiation altogether.
However, by changing perspective on the problem and implementing new processes and technology, legal teams can increase efficiency, save time, reduce risk, and most importantly, feel as if you have maintained your integrity while negotiating these terms.
In this guide, Michael Ohta, Legal Counsel at Ironclad, outlines how Ironclad reduced negotiation on standard customer agreements by 43% year over year. Read on for an overview of how we did it!
Ironclad's approach to contract negotiation
At Ironclad, we are all about making the contract process simpler and more efficient. In our contract negotiations, we strive to reduce our contract redline rate – the percentage of agreements that have some negotiated change from our standard template. With a few changes, we have been able to achieve amazing results.
Legal teams can get bogged down quickly in trying to ensure that the business’s needs are well represented in commercial contracts. Especially if they are touching every single contract that goes through the business. However, by adopting some more efficient processes, legal teams can find themselves being more strategic with contract negotiation.
This guide is for legal teams that want to reduce their contract negotiation rates with actionable insight from Ironclad’s own legal counsel.
How to reduce your redline rate
We are constantly incorporating our learnings into our contracting process. It’s how we’ve come to learn some of the secrets of reducing contract negotiation rates.
For example, we learned that a friendly template can be the beginning of a great partnership (if your goal is to go beyond just the one time transaction).
We also learned that switching to online agreements and implementing a “no negotiation” threshold can significantly impact the amount of redlines a particular contract will have to go through.
Get access to more secrets to reducing negotiation rates in our guide!
What else you'll find in this guide
In this guide, we outline the ways that Ironclad has effectively reduced its redline rate. We are not guessing about how these things work; these are techniques and principles that we apply to our own contracting process. This guide also includes:
- Tips for building a contract process that discourages redlines.
- Step by step guide to counterparty-friendly contracts.
- Actionable steps you can take today to reduce your negotiation rates.
Ironclad is not a law firm, and this post does not constitute or contain legal advice. To evaluate the accuracy, sufficiency, or reliability of the ideas and guidance reflected here, or the applicability of these materials to your business, you should consult with a licensed attorney. Use of and access to any of the resources contained within Ironclad’s site do not create an attorney-client relationship between the user and Ironclad.
- Ironclad's approach to contract negotiation
- How to reduce your redline rate
- What else you'll find in this guide
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