WEBVTT
1
00:00:00.080 --> 00:00:12.560
[upbeat music] You're listening to the Contract Heroes Podcast, your one-stop shop for all things contract management. And now, here are your hosts, Mark and Pepe.
2
00:00:15.120 --> 00:00:26.640
Hello everyone, and welcome to another episode of the Contract Heroes Podcast. We have our second session here at the World CC America's Summit, and we have a special guest. She's Lori Ehrlich.
3
00:00:26.880 --> 00:00:34.120
Uh, she's the chief commercial counsel at Datadog. So, this is going to be a fun one. Welcome to the show, Lori. Thank you. It's great to be here.
4
00:00:34.160 --> 00:00:44.940
So we, before we jump with the contract questions, let's talk about Datadog. What's all about Datadog? What does the company do? We're a cloud monitoring solution. Okay. So, we are the company...
5
00:00:45.020 --> 00:01:00.380
So, I usually use it as an example, remember in the movies every time you have some dangerous mission and people are in this computer room with lots of s- you know, servers and lights that are red, and orange, and yellow, and, and that tells them are things working right or not working?
6
00:01:00.520 --> 00:01:08.190
Yeah. But once we move to the cloud, you can't do that anymore. There are no lights that are shining for you to know is your server at capacity, how's it running.
7
00:01:08.780 --> 00:01:21.380
And so what we do is we provide that visibility, so companies know how their tech stack is working, whether it's working right, whether it's not working, where there are hiccups, where there aren't hiccups, and then help companies to just move everything faster and fix anything that's broken.
8
00:01:22.020 --> 00:01:30.840
You know, what is your role specifically in the organization? So, as chief commercial counsel, I'm responsible for all of our inbound and outbound contracting. Well, now let's go to [laughs] the contract questions.
9
00:01:30.960 --> 00:01:43.100
So, what have you seen that are, like the, you know, like m- maybe one of the most common pain points in, in this industry? Talking about, like, contract wise. I think it's education. Education? Yep.
10
00:01:43.240 --> 00:01:48.020
I think it's making sure that everybody actually understands what we're contracting about.
11
00:01:48.340 --> 00:01:56.500
So does my customer, and not the, not the business stakeholder, but the legal or procurement person on the other side, understand what it is that they are buying?
12
00:01:57.240 --> 00:02:07.630
I mean, I got an evaluation of the agreement the other day that said, "You can... We'll allow you to... our, our internal stakeholders to test your solution, but they can't connect it to anything."
13
00:02:08.280 --> 00:02:13.860
Well, our solution can't work if it's not connected to things. We ingest data from your systems. That is how we work.
14
00:02:13.940 --> 00:02:23.720
So this lack, that, that lack of understanding really makes it impossible to close the contract when the parties aren't coming from the same position. I had a similar thing on my side.
15
00:02:23.840 --> 00:02:36.280
My team didn't understand what we were buying. We're working on a, getting a tool that helps people who are visually impaired to understand the text on the screen, and we thought that it was a SaaS solution.
16
00:02:36.640 --> 00:02:46.590
But it's not a SaaS solution, it's actually something that you download onto your computer. So there were all these clauses in the contract about, you know, the right to the data that goes into their website. Wow.
17
00:02:46.640 --> 00:02:49.489
But that was irrelevant, because this data wasn't going into their w- website.
18
00:02:50.160 --> 00:03:00.280
It took us two extra weeks to close the contract, because my team didn't understand that it was something that was happening on someone's individual computer, and none of our data was going to the vendor. Wow.
19
00:03:00.360 --> 00:03:11.400
That's a... I mean, when you talk about it, it sounds, like, very clear. But I would think about, like, how do you put that in the contract? [laughs] It's not, it's even before the contract.
20
00:03:11.440 --> 00:03:20.400
It's not about the text in the contract. Yeah. It's understanding, and that's so hard, because the business stakeholders know what they're buying, but it's hard to fill out questionnaires.
21
00:03:20.420 --> 00:03:29.920
Like, when you do intake- Yeah... and you have to ask questions, you have to find a common parlance that your businesspeople will understand so they can answer the questions correctly.
22
00:03:29.960 --> 00:03:35.980
And a lot of times when they don't, you have that knowledge gap. Or when you don't bother having the conversation, you really need to have the conversation.
23
00:03:36.000 --> 00:03:48.480
And what we tell our sales team all the time for our, our complex enterprise deals is, "If you do not have a strong champion that can translate for their legal and procurement teams what they are buying, you will not be able to close this deal."
24
00:03:48.720 --> 00:04:00.420
Because the legal and procurement teams in large bureaucracies are following the rules, and if the rules don't work for what you're selling, you cannot close the contract without the champion explaining why exceptions are needed.
25
00:04:00.440 --> 00:04:10.760
And, and how do you go about, I guess, enabling the team or training the team to try to bring those people into the conversation sooner than later, or hopefully at some point? [laughs] So, we have a couple things.
26
00:04:10.800 --> 00:04:28.060
So, one, we have a contracting FAQ on our website, and it's actually attached to our standard form contract that explains what our business is, so that the procurement or legal person receiving the contract understands in more, like, not business speak, but in legal procurement speak what it is that they're buying.
27
00:04:28.100 --> 00:04:33.120
Not so many legalese. Exactly. We don't use legalese, it's, we try to make it easy to understand. But it's, but it's, uh...
28
00:04:33.200 --> 00:04:44.800
And we've actually now translated it into multiple languages so that not just our US stakeholders, but our, you know, our, our APAC stakeholders, and EMEA stakeholders, and LATAM stakeholders also can understand it.
29
00:04:44.840 --> 00:04:53.460
And then, uh, um, I have told my team that they cannot ex- reject any customer changes to our contracts without putting an explanatory comment.
30
00:04:54.100 --> 00:05:03.740
And we have, our playbook guidance includes pre-written comments to explain, and the ex- explanations are not the, "No, we can't accept this," it's, "This is how our business works."
31
00:05:03.800 --> 00:05:12.080
It's stating the actual operational reality behind our business. How long did it take to build that playbook? [laughs] So, it's funny. It's the...
32
00:05:12.100 --> 00:05:20.760
When I joined, there was, like, our standard form and a couple of, like, fallback clauses written into the standard form. And I was like, "No, no, no, this doesn't help. Like, no one can learn from this.
33
00:05:20.800 --> 00:05:30.159
It's not scalable." And so it was my first project. But it took me six months to learn the business well enough to write it, and then I wrote it down in kind of, like, a quick and dirty in about two months.
34
00:05:30.540 --> 00:05:39.620
But it's being built out every single day. That's not a... It's a live document. My team members, every time they hit something new, we have a Slack channel for contract escalations.
35
00:05:40.020 --> 00:05:48.860
They escalate in that contract, and then that data gets put into the playbook, so the next time someone encounters that, they can make that change as well, and know what the position is, and know the reasoning behind it.
36
00:05:48.920 --> 00:06:00.580
Like, it's the, the Slack channel's not like yes or no, it's an explanation of, like, why is this okay, or why is it not okay, or what specific con- comment can we give to the customer or the vendor in this case? Wow.
37
00:06:00.620 --> 00:06:10.735
And-[laughs] You made me think a lot up here. And, I mean, I'm, I'm just thinking about, like, what would be, like, some of the, you know, like the pain point for some of your stakeholders.
38
00:06:10.876 --> 00:06:20.886
You, you, you just told us that you work with, uh, with the buy side and from the sell side. From the sell side, what would you think is, like, one, like, bottleneck in the process, like the, a common one?
39
00:06:21.596 --> 00:06:26.636
It's definitely, I mean, most of our contracts close in two weeks or less. Okay.
40
00:06:26.696 --> 00:06:44.196
It's the ones that are, you know, we have an old brick-and-mortar company that has decided to take their old on-prem agreement and their old professional services agreement and combine them and say, "Hey, here's our SaaS contract," where you have all these clauses that just don't make sense for a multi-tenant SaaS engagement.
41
00:06:44.576 --> 00:06:54.176
Yeah. And educating those customers takes the longest. I mean, we've had contracts with those cu- customers of that nature that have taken three years, two years, one year.
42
00:06:54.516 --> 00:07:05.456
But, but most of them are a minimum of six months to negotiate, because we're coming from such different points of view- Mm... on what it is they're buying and what, and what we can do as a company. Yeah.
43
00:07:05.496 --> 00:07:08.996
That takes back to the education part. Yeah. I mean, I've literally spent
44
00:07:10.196 --> 00:07:19.536
a couple of hours negotiating why I can't include language in a contract that says I'm gonna provide an on-prem solution when I don't offer an on-prem solution, and that shouldn't take any time.
45
00:07:19.596 --> 00:07:29.476
Like, that should just be done like this. "No, I don't sell that. End of story." [laughs] Yeah, right. I mean- But it's not. There are, you know, we need our custom security terms, but I'm a multi-tenant platform.
46
00:07:29.556 --> 00:07:35.856
I can't do custom security terms. I can only give you the security that my platform offers. Yeah, of course. And what about the procurement side?
47
00:07:35.916 --> 00:07:44.376
Like, can you give us an, an example of, I know, some of your biggest vendors or suppliers? Uh, well, you know, the biggest ones don't actually negotiate at all.
48
00:07:44.536 --> 00:07:46.996
[laughs] And so you have to get comfortable with the risks.
49
00:07:47.056 --> 00:07:57.456
So we're, we're really still at our beginning of our journey on making our vendor side stronger, and what we're working on right now is heat mapping our contracts. So I, it's hard to do playbooks.
50
00:07:57.556 --> 00:08:04.066
You are usually on your vendor forms. We have our forms. We've set up our forms. Sometimes they get accepted. That's great. Those can move quickly.
51
00:08:04.936 --> 00:08:16.876
But the ones that don't get accepted, my team needs to understand what matters. And we don't all start, like, I mean, I, I did my first lease the other day. I don't know what matters in a lease agreement.
52
00:08:16.956 --> 00:08:22.706
I'd never done a lease agreement. I mean, I've done my own personal lease agreements, but I had not done one for a company, and so I'm learning this process.
53
00:08:22.785 --> 00:08:31.956
And so I'm working with outside counsel, and I'm working with my in-house real estate team, who are really experts, and we're starting a playbook. We're starting to identify what matters to us as a company.
54
00:08:31.996 --> 00:08:39.285
What matters in different regions is not the same, because there are, there are really regional nuances in lease agreements, and so we're learning it together. And that happens all the time.
55
00:08:39.296 --> 00:08:49.716
We get all kinds of contracts that my team is completely unfamiliar with. So how do you quickly understand what matters in the contract? And it's really about having detailed conversations with the business stakeholder.
56
00:08:49.796 --> 00:08:59.116
What matters to you? What would make this a success? And asking them the right questions so that you can then negotiate the contract. It's also understanding that you don't need perfect contracts.
57
00:08:59.316 --> 00:09:06.056
Most contract disputes don't happen in court. I mean, there's risks- You don't need-... that you can assume always. That's right. You don't need to cross your Ts and dot every I.
58
00:09:06.356 --> 00:09:11.386
You just need to address what actually matters. And so we're make, doing these maps where you have the...
59
00:09:12.106 --> 00:09:23.816
And this is what I'm talking about, actually, at the Contract Corner tomorrow, is kind of understanding not what terms in the contract are risky, but what the actual risks of the engagement are, is the actual risk by...
60
00:09:23.896 --> 00:09:34.236
Indemnity is not an actual risk in an engagement. Being sued by somebody is an actual risk in the engagement. And so what are the risks? How can they be mitigated? And some of those mitigations are not in the contract.
61
00:09:34.276 --> 00:09:41.696
Some of the mitigation is, you know, actually having someone who's responsible for the engagement. If you have a dedicated person, you can mitigate some of the risks.
62
00:09:42.316 --> 00:09:46.996
Sometimes it's, it's, you know, having the ability to get out of the contract is the most important.
63
00:09:47.056 --> 00:09:55.796
So you have, really have to understand for each type of contract what the actual risks are and how you can mitigate them and make sure you don't waste time negotiating things that don't actually matter to the company.
64
00:09:56.356 --> 00:10:02.516
And, and how are you handling this heat mapping? Are you doing this manually? Are you using technology to help with this? What, what does that look like?
65
00:10:03.136 --> 00:10:08.356
Right now we're doing it manually, and then where I'd like to get to is use technology to automate some of it.
66
00:10:08.696 --> 00:10:24.516
So I'd like to figure out, like, what is our heat map, what matters to us, and then put those principles into a CLM and have the CLM read a contract based on this heat mapped playbook, essentially, and then tell me what I should pay attention to in the contract so we don't have to read every single line of the contract.
67
00:10:24.596 --> 00:10:36.296
I don't know that, like, I have to... I'm not at a point where I'd yet trust a CLM to correctly do that, 'cause we had demos from multiple CLMs, and there's not a single one that in the demo didn't miss a line, a clause.
68
00:10:37.436 --> 00:10:48.596
[laughs] So we'll see. Yeah, I mean, that, that, that's a very, uh, tailor-made, uh, uh, configuration, but I mean, it, it, it still works. You, you can do, like, some closed libraries and then just- I think-...
69
00:10:48.606 --> 00:10:54.836
put, like, a plug in there... my, we're gonna start with the NDAs, because, so we use one NDA. We've adopted one NDA six months ago.
70
00:10:54.916 --> 00:11:00.116
I think every company in the world should adopt one NDA or any other standard form NDAs. Let's stop having custom NDAs.
71
00:11:00.136 --> 00:11:07.636
But sometimes we have to negotiate them, 'cause they're a customer form and the customer's insistent. And I'm telling my team, like, "Please stop marking up NDAs.
72
00:11:07.936 --> 00:11:10.796
There are six things that you don't need, that shouldn't be in an NDA."
73
00:11:11.176 --> 00:11:18.715
If those things aren't there, like there shouldn't be a non-compete, there shouldn't be a non-solicit, there shouldn't be on-prem audit rights, [laughs] right? Those things don't belong.
74
00:11:18.746 --> 00:11:27.676
And I think if I can get a system that can just flag are these six things in the NDA, and if they're not there, it just goes to print and doesn't need a legal review- Mm-hmm... I think that's where I'm gonna start. Yeah.
75
00:11:27.696 --> 00:11:37.215
'Cause if- Yeah... yeah, it, it's harder to screw that up. [laughs] Yeah, and, and I think, I mean, that's, that's a great place to start, and I think that technology is at the point where it can do that right now. Yes.
76
00:11:37.256 --> 00:11:43.236
Um, and I, and I think it's obviously still evolving, and, and the more complex contracts are going to be something that AI can assist with.
77
00:11:43.616 --> 00:11:53.596
But right now, it, it's, it's great to start with, you know, the, your, your more standard contracts and, and get comfortable with the system, get the team to know how to use it, a- and then continue to build on top of that.
78
00:11:54.036 --> 00:11:58.456
Completely agree. Education. Education. It's all about education. Exactly. No, and, and you know what?
79
00:11:58.536 --> 00:12:12.216
I mean, we've been talking this, uh, for, uh, I don't know, some, uh, some of, of our most recent episodes, and we think, like, the change mana- management part, it's like- It's not that they don't understand, but maybe they don't put enough attention.
80
00:12:12.376 --> 00:12:19.556
Because, I mean, they can spend all the money you want with the perfect consulting team, with the perfect vendor if, if there's one, right?
81
00:12:20.036 --> 00:12:35.456
But the thing is, like, once you, you go and go live and the users start using the, the system, I mean, the adoption part, that's the, where, you know, it's like the marriage starts. [laughs] So I try to do two things.
82
00:12:35.796 --> 00:12:44.976
I try not to change things for the organization as a whole. Yeah. I try to change things for, for my team in a way that benefits everybody in the organization.
83
00:12:45.036 --> 00:12:53.336
So if we wanna do something different on the sales intake, for example, I think, "Well, how can I do it in a way that's actually invisible for sales?" Or that they...
84
00:12:54.016 --> 00:13:03.616
You know, like, so for example, we won't negotiate deals under a certain threshold, like any other SAS company out there, and that used to be a manual approval process in Chatter and Salesforce, which was ridiculous.
85
00:13:03.976 --> 00:13:13.535
I automated that process, and now the people who used to get Chattered now, you know, get an alert and have to hit Approve. That is change, but it's a change that makes their lives better.
86
00:13:13.776 --> 00:13:25.526
It is easier to do than it was before. Right. And that, to me, is the secret. Like, the, um, the, the keynote that we had earlier today about quick wins, for adoption, you need quick wins.
87
00:13:25.616 --> 00:13:32.456
You need to find a way to get people to make it easier for them. And if you make it easier for them, they'll come with you on that journey.
88
00:13:33.066 --> 00:13:42.476
And then with my team, I just, I always talk about the vision, like, "Where are we going? What's the future gonna hold?" And get them excited. So, and then I... And they're not... Like, it's not me driving it.
89
00:13:42.756 --> 00:13:47.456
They're now coming to me and saying, "Well, what if we did this, and what if we did that?" I'm like, "Yes, yes, let's do it, but let's prioritize."
90
00:13:47.856 --> 00:13:57.846
[laughs] And what about, what, what would be, like, one of your biggest lessons here in change management? Like, something that you know now and maybe you will wish to know, like, couple years before?
91
00:13:58.826 --> 00:14:06.246
I think my two biggest challenges are trying to do too much, that if you try to boil the ocean, you won't actually get anything done, and so prioritizing.
92
00:14:06.996 --> 00:14:15.846
And then making sure that you have enough resources to actually do it, and the right resources. That, you know, it, you can't, you can't implement CLM all by yourself. [laughs] Right, yeah.
93
00:14:15.856 --> 00:14:24.616
You need other people to be part of it. Right. And what about, like, can you give us, like, some tips on how, how you've been training your team?
94
00:14:24.816 --> 00:14:32.196
Like, do you have, like, regular sessions where you, I don't know, have, like, bullet points or what are, what are you going to d- d- d- discuss?
95
00:14:32.656 --> 00:14:44.696
Or you see, like, I don't know, like, your most recent closed deals, like, what are you, what are their, uh, learnings from, from those deals, or, or how does that work? So there's different types of education. Okay.
96
00:14:44.776 --> 00:14:56.236
So education on particular contract points usually comes in the form of exchanges on Slack as people put things in the ex- contract escalation Slack. And everyone kind of learns from that.
97
00:14:56.616 --> 00:15:03.276
Plus, all of those learnings go into the playbook. So even if they don't remember it, when they go to the playbook, they're like, "Oh yeah, this is why this is here. This is why it matters to the organization."
98
00:15:03.916 --> 00:15:15.156
The other thing that we're working on is, is really enhancing negotiation skills, and so I've done two things. One, all customer paper contracts I require four eyes on.
99
00:15:15.216 --> 00:15:25.416
Uh, no, no single person by themselves review it, because you can, as a more junior person, you can learn something from reading someone else's markups. And as a more senior person,
100
00:15:26.396 --> 00:15:37.956
you have to go through those so many times, it's easy, and they're so not right, round peg square hole issue, that it, that you really, having a second person look at it and make sure that, like, the big things are all captured and addressed is really valuable.
101
00:15:38.076 --> 00:15:46.516
But it's, it's good education for both parties. And then, um, I've, we've, we're stumbling a little bit on this, because it's hard with calendars and remembering.
102
00:15:47.236 --> 00:15:55.596
But I'm trying to get people to invite each other to negotiation calls, so having a buddy for the quarter, and you invite your buddy to your calls for that quarter, or you have a buddy on a particular deal.
103
00:15:55.996 --> 00:15:59.756
Because everyone has slightly different negotiation styles, and you can really learn.
104
00:16:00.096 --> 00:16:08.556
When you, when you negotiate the same issues, hearing somebody else negotiate that issue in their way, you have an opportunity to learn, or learn from the style.
105
00:16:09.096 --> 00:16:19.316
And then some things we do, I do a lot of, I call it my navel-gazing work with my team, and trying to help them learn about themselves so that they can get the career that they want.
106
00:16:19.376 --> 00:16:28.126
So really understand, like, what is your genius? What, where, what type of work do you do that you hit that state of flow and that you wanna grow and you wanna keep working? And what don't you like?
107
00:16:28.156 --> 00:16:34.256
And let's get that stuff off your plate. And so we do a lot of that introspective learning together, and, and individually.
108
00:16:34.416 --> 00:16:48.056
For what you're telling us, I mean, it sounds like you're trying to make these commercial teams as self-service as possible, right? Like, so the legal team doesn't need to get involved in all of their contracts, right?
109
00:16:48.196 --> 00:17:00.656
Oh, so- So- So I do wanna do that. We're not doing that yet. So we have... My goal is to have a version of our playbook that's exposed to sales that doesn't include everything.
110
00:17:00.696 --> 00:17:04.016
They don't need to know how far we'll go on limitation of liability, for example.
111
00:17:04.036 --> 00:17:16.376
But it has the, those grounding comments that explain what our business does, and have them be able to do, not customer paper, but have them be able to do a m- simple markup of our paper applying those principles.
112
00:17:17.236 --> 00:17:28.236
The other thing that we're working on is kind of having, um, the cer- like, we have four clauses that we'll always accept certain changes to. Like, we have a default clause that we can use customer logos.
113
00:17:28.296 --> 00:17:37.756
If the customer doesn't wanna use that, we will still sign the contract. It's okay. [laughs] And so allowing them to self-help just on those four that we're always willing to change.
114
00:17:37.856 --> 00:17:50.076
Um, but w- I'm still toying with, like, how to do that so they just don't always give it, so we have to put metrics around, around it so it's, it's not like this salesperson gives all the time on those same four points, because that's not, that's not really healthy.
115
00:17:50.216 --> 00:17:58.566
That won't be good for our business as a whole. Even though it doesn't matter on a single contract, it matters on the volume of contracts. And then on the vendor side, we have done a couple things.
116
00:17:58.646 --> 00:18:10.496
So we've identified a category of contracts that we don't really care that much about. You know, like, the restaurant reservation for 10 people, uh, it's not gonna sink our business in any way, shape, or form.
117
00:18:10.556 --> 00:18:17.156
So we have a checklist for our business stakeholders to just say, "You know, this is, this is okay, this is okay, this is okay, this is okay."
118
00:18:17.166 --> 00:18:27.236
And if it is, then they can go ahead with it to execution without having legal review. And some of that we do with procurement. So procurement's obviously a more sophisticated partner than, than the business stakeholder.
119
00:18:27.286 --> 00:18:35.456
Mm-hmm. And so there's a category of contracts that we've said to procurement, "Okay, these you can follow our playbook and do yourself, and only come to us if there's something that's not addressed by the playbook."
120
00:18:35.496 --> 00:18:37.456
That's great. I mean, it's, it's all part of that journey, right?
121
00:18:37.506 --> 00:18:48.936
And continuing to grow, and it, it's great that you're enabling your team to, to focus on the things that they wanna focus on, and, and breaking that work up into places that, maybe if it's something that somebody, one person doesn't like, it's something that, you know, somebody else enjoys.
122
00:18:48.956 --> 00:18:55.906
That's what I tell them all the time. [laughs] I hate filling in forms. Other people find it very peaceful. Yeah. Well, that's great. Hey, well, thank you, Lori, so much for joining us.
123
00:18:55.976 --> 00:19:03.196
This has been a, a great conversation. We hope you have a blast at the conference. Thank you. And thanks, everybody, for listening to another episode of Contract Heroes. Thank you so much.
124
00:19:03.476 --> 00:19:13.736
This episode of The Contract Heroes is sponsored by COHO Consulting. COHO helps organizations of all shapes and sizes find, implement, and manage their chosen CLM tool.
125
00:19:14.716 --> 00:19:24.116
Whether your project is buy or sell side led, COHO can help you navigate the waters of the CLM space to make sure that you're getting a product that's going to fit like a glove for years to come.
126
00:19:24.756 --> 00:19:32.076
If you'd like to learn more about COHO, visit their website at C-O-H-O consulting dot com. [outro music]
1
00:00:00.080 --> 00:00:12.560
[upbeat music] You're listening to the Contract Heroes Podcast, your one-stop shop for all things contract management. And now, here are your hosts, Mark and Pepe.
2
00:00:15.120 --> 00:00:26.640
Hello everyone, and welcome to another episode of the Contract Heroes Podcast. We have our second session here at the World CC America's Summit, and we have a special guest. She's Lori Ehrlich.
3
00:00:26.880 --> 00:00:34.120
Uh, she's the chief commercial counsel at Datadog. So, this is going to be a fun one. Welcome to the show, Lori. Thank you. It's great to be here.
4
00:00:34.160 --> 00:00:44.940
So we, before we jump with the contract questions, let's talk about Datadog. What's all about Datadog? What does the company do? We're a cloud monitoring solution. Okay. So, we are the company...
5
00:00:45.020 --> 00:01:00.380
So, I usually use it as an example, remember in the movies every time you have some dangerous mission and people are in this computer room with lots of s- you know, servers and lights that are red, and orange, and yellow, and, and that tells them are things working right or not working?
6
00:01:00.520 --> 00:01:08.190
Yeah. But once we move to the cloud, you can't do that anymore. There are no lights that are shining for you to know is your server at capacity, how's it running.
7
00:01:08.780 --> 00:01:21.380
And so what we do is we provide that visibility, so companies know how their tech stack is working, whether it's working right, whether it's not working, where there are hiccups, where there aren't hiccups, and then help companies to just move everything faster and fix anything that's broken.
8
00:01:22.020 --> 00:01:30.840
You know, what is your role specifically in the organization? So, as chief commercial counsel, I'm responsible for all of our inbound and outbound contracting. Well, now let's go to [laughs] the contract questions.
9
00:01:30.960 --> 00:01:43.100
So, what have you seen that are, like the, you know, like m- maybe one of the most common pain points in, in this industry? Talking about, like, contract wise. I think it's education. Education? Yep.
10
00:01:43.240 --> 00:01:48.020
I think it's making sure that everybody actually understands what we're contracting about.
11
00:01:48.340 --> 00:01:56.500
So does my customer, and not the, not the business stakeholder, but the legal or procurement person on the other side, understand what it is that they are buying?
12
00:01:57.240 --> 00:02:07.630
I mean, I got an evaluation of the agreement the other day that said, "You can... We'll allow you to... our, our internal stakeholders to test your solution, but they can't connect it to anything."
13
00:02:08.280 --> 00:02:13.860
Well, our solution can't work if it's not connected to things. We ingest data from your systems. That is how we work.
14
00:02:13.940 --> 00:02:23.720
So this lack, that, that lack of understanding really makes it impossible to close the contract when the parties aren't coming from the same position. I had a similar thing on my side.
15
00:02:23.840 --> 00:02:36.280
My team didn't understand what we were buying. We're working on a, getting a tool that helps people who are visually impaired to understand the text on the screen, and we thought that it was a SaaS solution.
16
00:02:36.640 --> 00:02:46.590
But it's not a SaaS solution, it's actually something that you download onto your computer. So there were all these clauses in the contract about, you know, the right to the data that goes into their website. Wow.
17
00:02:46.640 --> 00:02:49.489
But that was irrelevant, because this data wasn't going into their w- website.
18
00:02:50.160 --> 00:03:00.280
It took us two extra weeks to close the contract, because my team didn't understand that it was something that was happening on someone's individual computer, and none of our data was going to the vendor. Wow.
19
00:03:00.360 --> 00:03:11.400
That's a... I mean, when you talk about it, it sounds, like, very clear. But I would think about, like, how do you put that in the contract? [laughs] It's not, it's even before the contract.
20
00:03:11.440 --> 00:03:20.400
It's not about the text in the contract. Yeah. It's understanding, and that's so hard, because the business stakeholders know what they're buying, but it's hard to fill out questionnaires.
21
00:03:20.420 --> 00:03:29.920
Like, when you do intake- Yeah... and you have to ask questions, you have to find a common parlance that your businesspeople will understand so they can answer the questions correctly.
22
00:03:29.960 --> 00:03:35.980
And a lot of times when they don't, you have that knowledge gap. Or when you don't bother having the conversation, you really need to have the conversation.
23
00:03:36.000 --> 00:03:48.480
And what we tell our sales team all the time for our, our complex enterprise deals is, "If you do not have a strong champion that can translate for their legal and procurement teams what they are buying, you will not be able to close this deal."
24
00:03:48.720 --> 00:04:00.420
Because the legal and procurement teams in large bureaucracies are following the rules, and if the rules don't work for what you're selling, you cannot close the contract without the champion explaining why exceptions are needed.
25
00:04:00.440 --> 00:04:10.760
And, and how do you go about, I guess, enabling the team or training the team to try to bring those people into the conversation sooner than later, or hopefully at some point? [laughs] So, we have a couple things.
26
00:04:10.800 --> 00:04:28.060
So, one, we have a contracting FAQ on our website, and it's actually attached to our standard form contract that explains what our business is, so that the procurement or legal person receiving the contract understands in more, like, not business speak, but in legal procurement speak what it is that they're buying.
27
00:04:28.100 --> 00:04:33.120
Not so many legalese. Exactly. We don't use legalese, it's, we try to make it easy to understand. But it's, but it's, uh...
28
00:04:33.200 --> 00:04:44.800
And we've actually now translated it into multiple languages so that not just our US stakeholders, but our, you know, our, our APAC stakeholders, and EMEA stakeholders, and LATAM stakeholders also can understand it.
29
00:04:44.840 --> 00:04:53.460
And then, uh, um, I have told my team that they cannot ex- reject any customer changes to our contracts without putting an explanatory comment.
30
00:04:54.100 --> 00:05:03.740
And we have, our playbook guidance includes pre-written comments to explain, and the ex- explanations are not the, "No, we can't accept this," it's, "This is how our business works."
31
00:05:03.800 --> 00:05:12.080
It's stating the actual operational reality behind our business. How long did it take to build that playbook? [laughs] So, it's funny. It's the...
32
00:05:12.100 --> 00:05:20.760
When I joined, there was, like, our standard form and a couple of, like, fallback clauses written into the standard form. And I was like, "No, no, no, this doesn't help. Like, no one can learn from this.
33
00:05:20.800 --> 00:05:30.159
It's not scalable." And so it was my first project. But it took me six months to learn the business well enough to write it, and then I wrote it down in kind of, like, a quick and dirty in about two months.
34
00:05:30.540 --> 00:05:39.620
But it's being built out every single day. That's not a... It's a live document. My team members, every time they hit something new, we have a Slack channel for contract escalations.
35
00:05:40.020 --> 00:05:48.860
They escalate in that contract, and then that data gets put into the playbook, so the next time someone encounters that, they can make that change as well, and know what the position is, and know the reasoning behind it.
36
00:05:48.920 --> 00:06:00.580
Like, it's the, the Slack channel's not like yes or no, it's an explanation of, like, why is this okay, or why is it not okay, or what specific con- comment can we give to the customer or the vendor in this case? Wow.
37
00:06:00.620 --> 00:06:10.735
And-[laughs] You made me think a lot up here. And, I mean, I'm, I'm just thinking about, like, what would be, like, some of the, you know, like the pain point for some of your stakeholders.
38
00:06:10.876 --> 00:06:20.886
You, you, you just told us that you work with, uh, with the buy side and from the sell side. From the sell side, what would you think is, like, one, like, bottleneck in the process, like the, a common one?
39
00:06:21.596 --> 00:06:26.636
It's definitely, I mean, most of our contracts close in two weeks or less. Okay.
40
00:06:26.696 --> 00:06:44.196
It's the ones that are, you know, we have an old brick-and-mortar company that has decided to take their old on-prem agreement and their old professional services agreement and combine them and say, "Hey, here's our SaaS contract," where you have all these clauses that just don't make sense for a multi-tenant SaaS engagement.
41
00:06:44.576 --> 00:06:54.176
Yeah. And educating those customers takes the longest. I mean, we've had contracts with those cu- customers of that nature that have taken three years, two years, one year.
42
00:06:54.516 --> 00:07:05.456
But, but most of them are a minimum of six months to negotiate, because we're coming from such different points of view- Mm... on what it is they're buying and what, and what we can do as a company. Yeah.
43
00:07:05.496 --> 00:07:08.996
That takes back to the education part. Yeah. I mean, I've literally spent
44
00:07:10.196 --> 00:07:19.536
a couple of hours negotiating why I can't include language in a contract that says I'm gonna provide an on-prem solution when I don't offer an on-prem solution, and that shouldn't take any time.
45
00:07:19.596 --> 00:07:29.476
Like, that should just be done like this. "No, I don't sell that. End of story." [laughs] Yeah, right. I mean- But it's not. There are, you know, we need our custom security terms, but I'm a multi-tenant platform.
46
00:07:29.556 --> 00:07:35.856
I can't do custom security terms. I can only give you the security that my platform offers. Yeah, of course. And what about the procurement side?
47
00:07:35.916 --> 00:07:44.376
Like, can you give us an, an example of, I know, some of your biggest vendors or suppliers? Uh, well, you know, the biggest ones don't actually negotiate at all.
48
00:07:44.536 --> 00:07:46.996
[laughs] And so you have to get comfortable with the risks.
49
00:07:47.056 --> 00:07:57.456
So we're, we're really still at our beginning of our journey on making our vendor side stronger, and what we're working on right now is heat mapping our contracts. So I, it's hard to do playbooks.
50
00:07:57.556 --> 00:08:04.066
You are usually on your vendor forms. We have our forms. We've set up our forms. Sometimes they get accepted. That's great. Those can move quickly.
51
00:08:04.936 --> 00:08:16.876
But the ones that don't get accepted, my team needs to understand what matters. And we don't all start, like, I mean, I, I did my first lease the other day. I don't know what matters in a lease agreement.
52
00:08:16.956 --> 00:08:22.706
I'd never done a lease agreement. I mean, I've done my own personal lease agreements, but I had not done one for a company, and so I'm learning this process.
53
00:08:22.785 --> 00:08:31.956
And so I'm working with outside counsel, and I'm working with my in-house real estate team, who are really experts, and we're starting a playbook. We're starting to identify what matters to us as a company.
54
00:08:31.996 --> 00:08:39.285
What matters in different regions is not the same, because there are, there are really regional nuances in lease agreements, and so we're learning it together. And that happens all the time.
55
00:08:39.296 --> 00:08:49.716
We get all kinds of contracts that my team is completely unfamiliar with. So how do you quickly understand what matters in the contract? And it's really about having detailed conversations with the business stakeholder.
56
00:08:49.796 --> 00:08:59.116
What matters to you? What would make this a success? And asking them the right questions so that you can then negotiate the contract. It's also understanding that you don't need perfect contracts.
57
00:08:59.316 --> 00:09:06.056
Most contract disputes don't happen in court. I mean, there's risks- You don't need-... that you can assume always. That's right. You don't need to cross your Ts and dot every I.
58
00:09:06.356 --> 00:09:11.386
You just need to address what actually matters. And so we're make, doing these maps where you have the...
59
00:09:12.106 --> 00:09:23.816
And this is what I'm talking about, actually, at the Contract Corner tomorrow, is kind of understanding not what terms in the contract are risky, but what the actual risks of the engagement are, is the actual risk by...
60
00:09:23.896 --> 00:09:34.236
Indemnity is not an actual risk in an engagement. Being sued by somebody is an actual risk in the engagement. And so what are the risks? How can they be mitigated? And some of those mitigations are not in the contract.
61
00:09:34.276 --> 00:09:41.696
Some of the mitigation is, you know, actually having someone who's responsible for the engagement. If you have a dedicated person, you can mitigate some of the risks.
62
00:09:42.316 --> 00:09:46.996
Sometimes it's, it's, you know, having the ability to get out of the contract is the most important.
63
00:09:47.056 --> 00:09:55.796
So you have, really have to understand for each type of contract what the actual risks are and how you can mitigate them and make sure you don't waste time negotiating things that don't actually matter to the company.
64
00:09:56.356 --> 00:10:02.516
And, and how are you handling this heat mapping? Are you doing this manually? Are you using technology to help with this? What, what does that look like?
65
00:10:03.136 --> 00:10:08.356
Right now we're doing it manually, and then where I'd like to get to is use technology to automate some of it.
66
00:10:08.696 --> 00:10:24.516
So I'd like to figure out, like, what is our heat map, what matters to us, and then put those principles into a CLM and have the CLM read a contract based on this heat mapped playbook, essentially, and then tell me what I should pay attention to in the contract so we don't have to read every single line of the contract.
67
00:10:24.596 --> 00:10:36.296
I don't know that, like, I have to... I'm not at a point where I'd yet trust a CLM to correctly do that, 'cause we had demos from multiple CLMs, and there's not a single one that in the demo didn't miss a line, a clause.
68
00:10:37.436 --> 00:10:48.596
[laughs] So we'll see. Yeah, I mean, that, that, that's a very, uh, tailor-made, uh, uh, configuration, but I mean, it, it, it still works. You, you can do, like, some closed libraries and then just- I think-...
69
00:10:48.606 --> 00:10:54.836
put, like, a plug in there... my, we're gonna start with the NDAs, because, so we use one NDA. We've adopted one NDA six months ago.
70
00:10:54.916 --> 00:11:00.116
I think every company in the world should adopt one NDA or any other standard form NDAs. Let's stop having custom NDAs.
71
00:11:00.136 --> 00:11:07.636
But sometimes we have to negotiate them, 'cause they're a customer form and the customer's insistent. And I'm telling my team, like, "Please stop marking up NDAs.
72
00:11:07.936 --> 00:11:10.796
There are six things that you don't need, that shouldn't be in an NDA."
73
00:11:11.176 --> 00:11:18.715
If those things aren't there, like there shouldn't be a non-compete, there shouldn't be a non-solicit, there shouldn't be on-prem audit rights, [laughs] right? Those things don't belong.
74
00:11:18.746 --> 00:11:27.676
And I think if I can get a system that can just flag are these six things in the NDA, and if they're not there, it just goes to print and doesn't need a legal review- Mm-hmm... I think that's where I'm gonna start. Yeah.
75
00:11:27.696 --> 00:11:37.215
'Cause if- Yeah... yeah, it, it's harder to screw that up. [laughs] Yeah, and, and I think, I mean, that's, that's a great place to start, and I think that technology is at the point where it can do that right now. Yes.
76
00:11:37.256 --> 00:11:43.236
Um, and I, and I think it's obviously still evolving, and, and the more complex contracts are going to be something that AI can assist with.
77
00:11:43.616 --> 00:11:53.596
But right now, it, it's, it's great to start with, you know, the, your, your more standard contracts and, and get comfortable with the system, get the team to know how to use it, a- and then continue to build on top of that.
78
00:11:54.036 --> 00:11:58.456
Completely agree. Education. Education. It's all about education. Exactly. No, and, and you know what?
79
00:11:58.536 --> 00:12:12.216
I mean, we've been talking this, uh, for, uh, I don't know, some, uh, some of, of our most recent episodes, and we think, like, the change mana- management part, it's like- It's not that they don't understand, but maybe they don't put enough attention.
80
00:12:12.376 --> 00:12:19.556
Because, I mean, they can spend all the money you want with the perfect consulting team, with the perfect vendor if, if there's one, right?
81
00:12:20.036 --> 00:12:35.456
But the thing is, like, once you, you go and go live and the users start using the, the system, I mean, the adoption part, that's the, where, you know, it's like the marriage starts. [laughs] So I try to do two things.
82
00:12:35.796 --> 00:12:44.976
I try not to change things for the organization as a whole. Yeah. I try to change things for, for my team in a way that benefits everybody in the organization.
83
00:12:45.036 --> 00:12:53.336
So if we wanna do something different on the sales intake, for example, I think, "Well, how can I do it in a way that's actually invisible for sales?" Or that they...
84
00:12:54.016 --> 00:13:03.616
You know, like, so for example, we won't negotiate deals under a certain threshold, like any other SAS company out there, and that used to be a manual approval process in Chatter and Salesforce, which was ridiculous.
85
00:13:03.976 --> 00:13:13.535
I automated that process, and now the people who used to get Chattered now, you know, get an alert and have to hit Approve. That is change, but it's a change that makes their lives better.
86
00:13:13.776 --> 00:13:25.526
It is easier to do than it was before. Right. And that, to me, is the secret. Like, the, um, the, the keynote that we had earlier today about quick wins, for adoption, you need quick wins.
87
00:13:25.616 --> 00:13:32.456
You need to find a way to get people to make it easier for them. And if you make it easier for them, they'll come with you on that journey.
88
00:13:33.066 --> 00:13:42.476
And then with my team, I just, I always talk about the vision, like, "Where are we going? What's the future gonna hold?" And get them excited. So, and then I... And they're not... Like, it's not me driving it.
89
00:13:42.756 --> 00:13:47.456
They're now coming to me and saying, "Well, what if we did this, and what if we did that?" I'm like, "Yes, yes, let's do it, but let's prioritize."
90
00:13:47.856 --> 00:13:57.846
[laughs] And what about, what, what would be, like, one of your biggest lessons here in change management? Like, something that you know now and maybe you will wish to know, like, couple years before?
91
00:13:58.826 --> 00:14:06.246
I think my two biggest challenges are trying to do too much, that if you try to boil the ocean, you won't actually get anything done, and so prioritizing.
92
00:14:06.996 --> 00:14:15.846
And then making sure that you have enough resources to actually do it, and the right resources. That, you know, it, you can't, you can't implement CLM all by yourself. [laughs] Right, yeah.
93
00:14:15.856 --> 00:14:24.616
You need other people to be part of it. Right. And what about, like, can you give us, like, some tips on how, how you've been training your team?
94
00:14:24.816 --> 00:14:32.196
Like, do you have, like, regular sessions where you, I don't know, have, like, bullet points or what are, what are you going to d- d- d- discuss?
95
00:14:32.656 --> 00:14:44.696
Or you see, like, I don't know, like, your most recent closed deals, like, what are you, what are their, uh, learnings from, from those deals, or, or how does that work? So there's different types of education. Okay.
96
00:14:44.776 --> 00:14:56.236
So education on particular contract points usually comes in the form of exchanges on Slack as people put things in the ex- contract escalation Slack. And everyone kind of learns from that.
97
00:14:56.616 --> 00:15:03.276
Plus, all of those learnings go into the playbook. So even if they don't remember it, when they go to the playbook, they're like, "Oh yeah, this is why this is here. This is why it matters to the organization."
98
00:15:03.916 --> 00:15:15.156
The other thing that we're working on is, is really enhancing negotiation skills, and so I've done two things. One, all customer paper contracts I require four eyes on.
99
00:15:15.216 --> 00:15:25.416
Uh, no, no single person by themselves review it, because you can, as a more junior person, you can learn something from reading someone else's markups. And as a more senior person,
100
00:15:26.396 --> 00:15:37.956
you have to go through those so many times, it's easy, and they're so not right, round peg square hole issue, that it, that you really, having a second person look at it and make sure that, like, the big things are all captured and addressed is really valuable.
101
00:15:38.076 --> 00:15:46.516
But it's, it's good education for both parties. And then, um, I've, we've, we're stumbling a little bit on this, because it's hard with calendars and remembering.
102
00:15:47.236 --> 00:15:55.596
But I'm trying to get people to invite each other to negotiation calls, so having a buddy for the quarter, and you invite your buddy to your calls for that quarter, or you have a buddy on a particular deal.
103
00:15:55.996 --> 00:15:59.756
Because everyone has slightly different negotiation styles, and you can really learn.
104
00:16:00.096 --> 00:16:08.556
When you, when you negotiate the same issues, hearing somebody else negotiate that issue in their way, you have an opportunity to learn, or learn from the style.
105
00:16:09.096 --> 00:16:19.316
And then some things we do, I do a lot of, I call it my navel-gazing work with my team, and trying to help them learn about themselves so that they can get the career that they want.
106
00:16:19.376 --> 00:16:28.126
So really understand, like, what is your genius? What, where, what type of work do you do that you hit that state of flow and that you wanna grow and you wanna keep working? And what don't you like?
107
00:16:28.156 --> 00:16:34.256
And let's get that stuff off your plate. And so we do a lot of that introspective learning together, and, and individually.
108
00:16:34.416 --> 00:16:48.056
For what you're telling us, I mean, it sounds like you're trying to make these commercial teams as self-service as possible, right? Like, so the legal team doesn't need to get involved in all of their contracts, right?
109
00:16:48.196 --> 00:17:00.656
Oh, so- So- So I do wanna do that. We're not doing that yet. So we have... My goal is to have a version of our playbook that's exposed to sales that doesn't include everything.
110
00:17:00.696 --> 00:17:04.016
They don't need to know how far we'll go on limitation of liability, for example.
111
00:17:04.036 --> 00:17:16.376
But it has the, those grounding comments that explain what our business does, and have them be able to do, not customer paper, but have them be able to do a m- simple markup of our paper applying those principles.
112
00:17:17.236 --> 00:17:28.236
The other thing that we're working on is kind of having, um, the cer- like, we have four clauses that we'll always accept certain changes to. Like, we have a default clause that we can use customer logos.
113
00:17:28.296 --> 00:17:37.756
If the customer doesn't wanna use that, we will still sign the contract. It's okay. [laughs] And so allowing them to self-help just on those four that we're always willing to change.
114
00:17:37.856 --> 00:17:50.076
Um, but w- I'm still toying with, like, how to do that so they just don't always give it, so we have to put metrics around, around it so it's, it's not like this salesperson gives all the time on those same four points, because that's not, that's not really healthy.
115
00:17:50.216 --> 00:17:58.566
That won't be good for our business as a whole. Even though it doesn't matter on a single contract, it matters on the volume of contracts. And then on the vendor side, we have done a couple things.
116
00:17:58.646 --> 00:18:10.496
So we've identified a category of contracts that we don't really care that much about. You know, like, the restaurant reservation for 10 people, uh, it's not gonna sink our business in any way, shape, or form.
117
00:18:10.556 --> 00:18:17.156
So we have a checklist for our business stakeholders to just say, "You know, this is, this is okay, this is okay, this is okay, this is okay."
118
00:18:17.166 --> 00:18:27.236
And if it is, then they can go ahead with it to execution without having legal review. And some of that we do with procurement. So procurement's obviously a more sophisticated partner than, than the business stakeholder.
119
00:18:27.286 --> 00:18:35.456
Mm-hmm. And so there's a category of contracts that we've said to procurement, "Okay, these you can follow our playbook and do yourself, and only come to us if there's something that's not addressed by the playbook."
120
00:18:35.496 --> 00:18:37.456
That's great. I mean, it's, it's all part of that journey, right?
121
00:18:37.506 --> 00:18:48.936
And continuing to grow, and it, it's great that you're enabling your team to, to focus on the things that they wanna focus on, and, and breaking that work up into places that, maybe if it's something that somebody, one person doesn't like, it's something that, you know, somebody else enjoys.
122
00:18:48.956 --> 00:18:55.906
That's what I tell them all the time. [laughs] I hate filling in forms. Other people find it very peaceful. Yeah. Well, that's great. Hey, well, thank you, Lori, so much for joining us.
123
00:18:55.976 --> 00:19:03.196
This has been a, a great conversation. We hope you have a blast at the conference. Thank you. And thanks, everybody, for listening to another episode of Contract Heroes. Thank you so much.
124
00:19:03.476 --> 00:19:13.736
This episode of The Contract Heroes is sponsored by COHO Consulting. COHO helps organizations of all shapes and sizes find, implement, and manage their chosen CLM tool.
125
00:19:14.716 --> 00:19:24.116
Whether your project is buy or sell side led, COHO can help you navigate the waters of the CLM space to make sure that you're getting a product that's going to fit like a glove for years to come.
126
00:19:24.756 --> 00:19:32.076
If you'd like to learn more about COHO, visit their website at C-O-H-O consulting dot com. [outro music]
