When it comes to buying and selling, the heart of every deal lies in the contracting process, when sales and legal teams work together to be on the same page to close business deals quickly. 

Unfortunately, the traditional method of contract negotiation is a convoluted and time-consuming process, with an average sales cycle length of 102 days. This lengthy process is not only inefficient — it also slows down business and can even result in lost sales opportunities

But why does it take so long? Here’s an example: the typical negotiation process for a sales contract has a minimum of eight manual steps necessary to close the deal, which makes for a long cycle time, slowing the speed of business. Manual contract negotiation involves not just the actual buyer and seller, but the legal teams on both sides of the deal. And more often than not, many of those steps are repeated multiple times until both parties actually agree to the terms. 

With as many as 85% of sales contracts still executed manually, and with around 40,000 contracts in a typical enterprise, sales and legal typically spend more time than necessary negotiating contracts that can easily be automated. Here’s what the process looks like:

Typical Process of Negotiating a Sales Contract

  1. Buyer agrees to the sale and sends along with their contract
  2. The contract is passed to the legal team
  3. General counsel passes work onto a junior associate
  4. Associate redlines contract, sends back to the partner. (2+ hours of review time)
  5. Partner reviews associate’s draft and makes changes
  6. Legal team meets with sales team to go over objections
  7. Sales team meets with the buyer to bring up objections
  8. Buyer meets with their legal team to consider responses. A new contract is drafted.
  9. Occasionally, steps 2-8 are repeated until all objections are addressed and both parties sign. 
Manual contract review is slower, use AI instead

Speeding Up the Process

For companies to close deals faster, they need to increase efficiency somewhere in the process to speed up the cycle. The place best suited for this is during the contract review process or steps 4-8. 

Now, let’s look at the difference in the process using BlackBoiler’s AI-powered automated contract review: 

Sales Contract Negotiation Process Using BlackBoiler

  1. Buyer agrees to the sale and sends along with their contract
  2. The contract is sent to BlackBoiler. The redlined contract is sent back in 5 minutes. 
  3. Partner reviews BlackBoiler’s redline and makes any changes
  4. Legal team meets with sales team to go over objections
  5. Sales team meets with the buyer to bring up objections
  6. Buyer meets with their legal team to consider responses. A new contract is drafted.
AI contract review process is quicker

In this case, the steps have been reduced by three, but more importantly, the two-plus hours of time it took an associate to edit the contract took BlackBoiler just five minutes. BlackBoiler’s fully AI-powered (no human involved) platform can reduce the contract review time by more than 70% — allowing companies to close business more quickly, which is a clear win for both the buyer and seller. 

By leveraging automated contract review tools like BlackBoiler, legal departments, law firms, and other organizations can clean and accelerate the contracting process, speeding the close of business while saving large organizations hundreds of thousands each year. We do this through the use of AI technology that learns how an organization previously reviewed contracts and from an organization’s legal playbook. The machine-learning technology gets “smarter” with every use.

The most exciting part of all of this is helping businesses close deals more quickly while freeing up lawyers to work on more complex matters – a win-win for legal departments and law firms.