In this episode of the Contract Heroes Podcast, hosts Pepe and Marc meet with Nandita Murthy, senior director of contracts at DRS Daylight Solutions, San Diego, California. She’s done a lot of work in the contracting space on the legal and business side, giving her a unique perspective on how to help these departments align on important company goals. In many organizations, business and legal departments may feel like opponents—so how do we fix that and get everyone on the same page? We recommend listening to the full podcast episode to get the most out of the insights Nandita shared. In the meantime, you can read here for a quick overview of the topics we discussed.
Meet Nandita Murthy: Senior Director of Contracts
Nandita considers San Diego her hometown. She started her career in legal at a firm in San Diego, focusing primarily on business litigation as well as some employment litigation. From there, she moved to a small business that was working on getting into government contracting but lacked the legal foundation necessary for those types of deals. What started as consulting work quickly morphed into a full-time job as their in-house counsel, working on everything from policies and procedures to building out their contract templates. Since then, she’s worked in contracts for larger businesses in the categories of production as well as research and development. Over her years in the contract management space, she’s learned a lot about making sure that both sales teams and legal teams are in line with a business’s overall goals and can work together to achieve them through contract negotiations.
How to Align Business and Legal Departments During Contract Negotiations
Most contracts start with sales in mind, as that is the department performing outreach and building relationships with the customers who are finally ready to start working with your business. These processes are crucial for businesses of all sizes, as they help keep revenue coming in and encourage your business’s growth over time. However, while sales may be excited to simply knock out the contract and get started on execution, it’s also important to understand the value of pursuing important legal goals, such as compliance and limiting liability. To close each deal, it’s important to find the middle ground that covers each department’s core concerns. Here are the steps Nandita recommends to make sure everyone is on the same team from start to finish.
Understand Each Contract’s Context
Before contract negotiations can begin, it’s important to get the who, what, where, when, and why from sales. Asking open-ended questions can help you understand the context of each deal and learn things that the sales team may have picked up from their conversations with the lead or customer so far. These insights can be valuable as you explore how to tailor your contract templates to their unique needs and goals. It’s also a great opportunity to understand how individual contracts fit into your company’s overall goals so legal can plan and prioritize accordingly.
Often, the most negotiated term in a contract will have to do with limited liability. These terms are important—after all, no one wants to be left responsible for more than they thought they were committed to—but it’s also important to keep the long-term focus of this deal in mind. Could you be looking at a repeat customer if this first contract goes well? What opportunities might come from working with this client and making a good impression? These questions can help the legal team get an idea of where sales is coming from during this process.
Foster Communication with CLM
Using software to track and communicate about contracts can be a great way to help legal and sales learn together from past contracts about what has worked best with similar deals in the past. From doing a deep dive into specific contracts that went well to using AI reports to look for themes, there are a variety of ways that software can encourage communication between teams and help everyone understand how to improve their contract negotiation process over time.
CLM can also foster communication by ensuring that everyone is in the loop at each stage of the contract negotiation process, so no one ends up feeling left out or missing important changes to the document. Whether it’s a team of two or two hundred people, the objective data that is tracked and stored in software can help everyone to agree and focus on what is actually happening and has happened, rather than relying on one team member or department’s memory of events.
Stay Flexible
Just because your legal team hasn’t done things a certain way before doesn’t mean it can’t be the best way to do things for this new contract. Don’t be afraid to “put your thinking cap on,” as Nandita puts it, and be flexible where you can to come up with unique solutions that accomplish your overall business goals.
Build Rapport with Your Team
As a contract professional, it can be easy to end up framed as opposing your sales team, so it’s important to actively counteract that with strong rapport and trust. It’s important that your team members are comfortable having open conversations with you and collaborating to figure out a way to make contracts work for everyone. There will always be some give-and-take, that’s part of the process, but when they know you’re on the same team, it’s easier to work with salespeople and figure out what is most important to give the customer if you can and which areas they may be more willing to work with you on.
Other Tips to Streamline Contract Negotiations
It’s important to do your due diligence before sending off a contract draft whenever possible. While each agreement is different, there will likely be things you can assume based on a company’s size, industry, and scope of work that they’re asking for. If you can plan ahead based on those things and go ahead and modify the areas that they may find objectionable ahead of time in a way that is acceptable to you, you can save everyone a lot of time in the long run.
Another great way to streamline contract negotiations is to build playbooks that are effective for your team. Nandita’s team benefits from playbook provisions regarding payment terms and intellectual property, as those are significant concerns for contracts in her industry. When your playbook provisions are fair and expected in your industry, it can give you more time to focus on any more nuanced clauses.
Achieving Your Business’s Contract Goals Together
Your sales and legal teams are both working toward the same business goals, so it’s important to strategize like it. By putting in the work upfront to align legal and business goals, you can prevent issues before they happen and create space for clear, effective communication about each contract. This dedication to alignment can also help make it easier to resolve any miscommunications when they do happen, because your sales and legal teams will both be starting from a foundation of collaboration.
This episode of Contract Heroes was brought to you by Koho Consulting, your team of contract professionals that help organizations find a CLM that will fit like a glove for years to come.
