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What reading about Enterprise sales has not prepared me for is months-long legal negotiations, and there is very little writing on this topic out there. Wherea

What reading about Enterprise sales has not prepared me for is months-long legal negotiations, and there is very little writing on this topic out there. Whereas you can pretty much agree to any terms that don’t misrepresent how your product works when you’re just starting out, there comes the point of wanting to spend a lot more scrutiny on your contracts without having in-house legal yet. If you’re a founder, that probably means you will be sending redlines, thinking about indemnities and warranties and handling other wonderful aspects of doing business internationally (privacy terms, jurisdiction, insurance, …). While true that price discrimination helps to make these cases mostly worth it, they are still a crazy time suck and finding a savvy lawyer to take it off your hands may or may not be easily possible (lawyer fees for one such deal once ended up being 50% of the whole deal value - we raised enterprise prices after that). Watch out especially when you’re in an industry going through lots of M&A activity as your self-service customers may suddenly be part of large Fortune 500 organizations, and despite all advice to the contrary, stakeholders who know your pricing already do balk at your 5-10x Enterprise prices. I do wish there were more stories of how the legal side of these deals is dealt with, what sticking points in contracts take up most of your time, and what „hacks“ you found. (One hack that saved me a lot of time: Treat your terms like you would any other part of your product. Iterate, work on the UX, remove barriers to adoption. After a bunch of gnarly negotiations over things that matter to your client, but not usually to you I compiled a list of changes and had our lawyer revise the terms to avoid the need to negotiate those parts moving forward. Alas, it’s a moving target and we’re in the midst of another iteration like this.)

rmccue 5y ago
I haven’t yet found a way to solve these problems, but a few tips I can offer from my experience: 1) Separate your order form from your standard services agreement. Put your services agreement online as a PDF, which sends a strong signal that you don’t generally negotiate these terms. 2) Allow amendments within your order form, but make them part of the commercial conversation. You might want to have a cutoff where you choose not to customise the contract; eg no custom terms for deals less than $XX,000 per month. 3) Accept that this is just the process for your larger customers. In larger deals, you’ll probably be signing a standard supplier contract they already have, with only the service-specific terms mattering. This could include terms needed for regulatory requirements eg which are not negotiable. Design your contracts to account for this. 4) Understand why your customer wants to redline something. This might be regulatory, it might be consistency with other suppliers, or it might just be pushing their luck. Case in point, we’re currently going back and forth with a FTSE 100 bank, and they have inserted a clause requiring us to have our working locations approved by them. We’re a remote, global company, so we’d need every employee approved. But the reason they care is due to banking regulations around sanctions, so we came to a mutual agreement that countries would be acceptable to us both. 4) Have a good way to track all these deviations. They’ll happen, so you just need to get used to them to some degree. Design variables into your system which integrate with your CRM so that you can codify this as much as possible. (But, be careful when doing this, since you’ll be providing your sales team with more levers which they will pull to get the deal.)

rmccue 5y ago

I haven’t yet found a way to solve these problems, but a few tips I can offer from my experience: 1) Separate your order form from your standard services agreement. Put your services agreement online as a PDF, which sends a strong signal that you don’t generally negotiate these terms. 2) Allow amendments within your order form, but make them part of the commercial conversation. You might want to have a cutoff where you choose not to customise the contract; eg no custom terms for deals less than $XX,000 per month. 3) Accept that this is just the process for your larger customers. In larger deals, you’ll probably be signing a standard supplier contract they already have, with only the service-specific terms mattering. This could include terms needed for regulatory requirements eg which are not negotiable. Design your contracts to account for this. 4) Understand why your customer wants to redline something. This might be regulatory, it might be consistency with other suppliers, or it might just be pushing their luck. Case in point, we’re currently going back and forth with a FTSE 100 bank, and they have inserted a clause requiring us to have our working locations approved by them. We’re a remote, global company, so we’d need every employee approved. But the reason they care is due to banking regulations around sanctions, so we came to a mutual agreement that countries would be acceptable to us both. 4) Have a good way to track all these deviations. They’ll happen, so you just need to get used to them to some degree. Design variables into your system which integrate with your CRM so that you can codify this as much as possible. (But, be careful when doing this, since you’ll be providing your sales team with more levers which they will pull to get the deal.)