How Contract Management Software Helps Form Negotiation Strategies
Did you know that the software used to manage contracts may also hold the key to better negotiations? Contract management software stores contract documentation, organizes performance of obligations, automates requests and processes electronic signatures. But it also provides an opportunity for deeper insights into negotiations. In that regard, it can help general counsels, attorneys, contract managers and procurement professionals to improve their negotiation strategy.
For some, it might not be obvious that contract management software can be a solid platform for contract negotiations. And the benefits for the team may be even broader. Improved negotiations mean saved time, lower stress, and better stakeholder relationships. Read more to discover the best strategies and how contract management software can support them.
What is an effective negotiation strategy?
Law school is all about learning to be a lawyer, right? Wrong. Negotiation is one subject that is under-taught in law school. Many experts have made this point. Bestselling books have even arisen to address the gaps in this professional preparation. Yet negotiation is critical to becoming a good lawyer. Some believe good negotiation only arises through practice. Negotiation is a practical matter, after all. That said, there are some techniques that can be borne in mind as one approaches a negotiation. The techniques help make up for a lack of formal training. But they take commitment. Commit, however, and you will see the difference it makes to deal progress.
1. Develop specific responses to each party’s demonstrated hard-bargaining tactics
Every person’s negotiation style is different. It pays to prepare for the tactics that might arise when negotiations get heated. Legal and contract professionals know preparation is important. But how many uncover those tough practices in advance of the meeting? How many come up with tactics to address those sticking points beforehand? Taking the time to look over past deals can reveal this valuable information. With that information, tackle problem areas in negotiations head on. Or find a way to avoid them before they arise.
2. Keep all documentation, stakeholder information, and permissions in one place
Effective preparation of the nature outlined above demands effective organization. Anyone in practice will know this fact. Few in practice, though, take steps to combat disorganization at every possible stage. Entering a negotiation with every piece of information needed is desirable. It is also achievable with the right tools. The time investment is well worth it. Increased confidence and better outcomes are the result.
3. Aim to collaborate with the opposition, not compete
Most see negotiation as a multifaceted battle. 'It is one party versus another party.' 'There are always conflicting interests.' This is only sometimes true. For many, negotiation can become a collaborative affair if desired. The negotiation can be an opportunity to meet both parties’ demands and interests. If you enter a negotiation with conflict in mind, it is likely to occur. Instead, enter with collaboration in mind. It may lead to better results for both parties.
4. Avoid a non-negotiable position
Nobody likes inflexibility in business. This is true of negotiations as much as other areas of commercial activity. It is much easier to negotiate a mutually-beneficial outcome. When you arrive at the negotiation table, have more than one option for parties to consider. For example, a party may request a salary that is too high for the company’s budget. Rather than deny the request, stress the value in the benefits the position offers. See if you can win the party around to your point of view. Inflexibility is a sure way to kill a lucrative deal. Overcome this by preparing yourself to actually negotiate.
5. Ensure accurate record keeping for cross-referencing
Several times throughout a negotiation, it will be necessary to check information provided. The same is true of promises made. It can damage the prospect of a deal when one party lacks that information. It is even worse when one party is wrong about it. Overcome these potential issues by ensuring accurate record keeping. This should occur from the very start of negotiations. From the moment of contract proposal or request, keep all communications. Store materials in one place. Try to make it easier to cross-reference information and recall important points. These actions will serve you and your team well throughout the negotiation. Your parties - and indeed your superiors - will thank you for it.
6. Keep the bigger picture in mind
When negotiating, it is easy to get caught up in the details. This creates many problems. One example is intent focus on a minor point. Another is improper handling of other contractual priorities. One way to avoid this is by keeping the bigger picture in mind. What stage is the deal at? When is the next big meeting due? How many times have you tried a certain argument before? Who is the pen holder of this deal? These are some points to bear in mind, even when all it seems like people are doing is focusing on the tiny details.
How does contract management software help form negotiation strategies?
Modern contract management software can be a powerful tool for assisting in negotiations. Below are some common functions that bear on the strategies mentioned above:
- Contract management software facilitates negotiation with both internal and external negotiation partners. Every party can submit documents and positions on one platform. Besides being time and cost efficient, this ensures that business goals and strategy are in alignment. A further important point is that that alignment comes from both sides. Uneven negotiations rarely produce results, so parties should take care to establish equality.
- Contract management software enables all parties to redline a draft contract at the same time. This feature, again, saves considerable time and money. It also helps to encourage a collaborative rather than combative negotiation. Simultaneous redlining helps even when different interests are at play. This is because collaboration encourages both parties to consider each other's positions.
- Contract management software provides a means of automation. Automation can reduce administrative overload on all parties. It can also enable them to focus on the high value substance of the negotiation. This is especially helpful in ensuring that parties are not wrapped up in the details. Remember that bigger interests are at play. The focus should be on them.
- Contract management software records a version history. Version histories reduce or help to avoid conflicts or questions about position changes. They also help General Counsels, attorneys and contract managers to understand the stimulus of a change in position. This is important for honing negotiation strategies in legal departments in the long-run.
- Contract management software presents contract negotiation stages on a visual dashboard. This helps teams and individuals to assimilate information in a rapid manner. In turn, this helps to inform decision-making. Team performance may benefit as communication improves and workloads become balanced.
Negotiations are key to good deal-making. And, good strategies are key to good negotiations. The time spent forming a negotiation strategy is rarely wasted. Legal professionals that adopt well-planned strategies tend to succeed where others do not. Adopting a proactive approach to negotiation results in significant progress. Contract management software is one effective tool that can make that approach easier.
If your business counts on contracts to function, then contract management software may be right for you. Contracts 365 is the leading contract management software for Microsoft 365 customers. With usability, functionality, and security at the forefront of development, Contracts 365 addresses all aspects of the contract lifecycle through a modern, intuitive interface specific to your users.
If you would like to learn more, please don’t hesitate to reach out to us or, even better, request a demo, and we can show you how it works in real-time.