The legal review meeting: the most common point where sales loses control.
As a SaaS sales rep, you watch your deal travel off into the abyss and come back covered in redlines.
We’ve listed some recommendations below to help you successfully host a meeting with your prospect’s legal team and close the deal.
1. Own the process end to end
Maintain your role as the deal owner or project manager throughout the process. While Legal often has strong opinions, you as the SaaS sales rep hold all of the necessary background info relevant for both parties. They should look to you as the point person — present yourself as such in any communication with them.
If they’d like to set up a meeting, prepare in advance by setting an agenda, providing pre-reading with the up-to-date contract or terms, and establishing the meeting goals. Afterward, provide a recap with action items so everyone knows what they owe you.
2. Add a cover letter to your terms document
Where you can, go above and beyond in your preparation. Add a cover letter to any documents you send over prior to the meeting.
You’ll add a layer of professionalism and give the Legal team a sparknotes version of the deal and the meeting itself. Going out of your way to save them time will mean a lot, even if they don’t realize it at first.
3. Take control in the meeting
Going into the meeting might feel like you’re just waiting for Legal to respond. Take a proactive approach and set the stage regarding your product or services to kick off the call.
Providing context upfront means everyone is on the same page. Plus, Legal is always stretched thin and may not have time to read up on your company or solution.
4. Involve your champion
Your champion supports your cause, and you should support them by ensuring they’re there every step of the way — including in a meeting with Legal.
You know the ins and outs of your deal but they know their own company best and want to make your SaaS product a fit. Lean on them, celebrate them, gut-check with them to go into a Legal meeting as a united front.
5. Outline what you’ve already accomplished
Legal cares about protecting their organization — so speak to what you’ve already locked in for them, including an MNDA, security review, and any other compliance-related aspects that meet their needs.
Mentioning requirements that you’ve already met shows your level of knowledge in the process too — you understand not only what it takes to get a deal closed but what they truly care about to make it happen on their end.
6. Open up the latest agreement or contract
Get things done in the meeting and avoid letting it be a simple “check-in.”
Pull up the latest and greatest contract or agreement, redlines and all, and screen share it with the team so you can knock out next steps and edits all in one.
Don’t be afraid to pinpoint specific areas to read through together and demand a next step. You’ve got them in the virtual room with you — make the most of it.
7. Educate yourself on the legal lingo
(This is a long one!) The more you know, the more credible you’ll sound, and the faster you can reach an agreement.
Here are a few terms that SaaS reps should have a high-level understanding of:
NDA: A non-disclosure agreement. A mutual NDA (MNDA) protects both parties from having confidential information disclosed without permission.
Buying and selling cycles start with this step so that SaaS sales reps can disclose confidential info like pricing, product roadmaps, and advanced functionality to the prospect while limiting exposure.
Ownership: Identifying who owns what. SaaS contracts typically state that providers retain ownership in the service while the customer owns any content or data they submit to the service.
Most SaaS companies also maintain a perpetual license to use aggregated and anonymized content and data for a variety of lawful purposes. SaaS providers can then provide benchmarking, improve the service, and report at a macro level.
Indemnity: Protection against a loss. SaaS providers used to only indemnify for IP, but now indemnity often exists for privacy, security, and confidentiality.
Depending on the data the SaaS provider gathers from a customer, the customer may also indemnify infringement related to the data they upload. If the provider is sued by a third party because of the customer data, the customer has to indemnify the provider.
- Limitations of Liability and the Liability Cap: Limits the amount of exposure a company faces. This is often the most confusing provision in a SaaS contract and one typically coupled with "fallback" provisions. This is nuanced but generally:
- The parties will disclaim any indirect damages, which are NOT tied to actual harm but more so the result of being inconvenienced.
- Contracts often have a general cap of twelve months of fees on direct damages. These damages are tied to actual harm — receipts for costs you incurred as a result.
- Legal teams will usually add carve-outs, or certain types of damages that are not subject to either of the direct or indirect damages clauses. Carve-outs are typically for IP infringement indemnity and either party's gross negligence or willful misconduct.
- "Super caps", "extraordinary caps", or "heightened caps" exist on certain damages. Instead of twelve months of fees for a breach of security, you might have 3x twelve months of fees, a fixed dollar amount like $2M, or the greater of a multiple of annual fees and a fixed dollar amount.
SLA: Service level agreement. Vendors often commit to an uptime between 99.5-99.9%. This depends on two things:
(1) The uptime commitment from the SaaS hosting provider. If the SaaS runs on Google Cloud, their uptime commitment is 99.5, so the SaaS provider shouldn’t contractually commit to something higher than that
(2) How critical the platform is to the customer's business.
Uptime Commitment: the number of minutes in a calendar month that the SaaS will be available as a percentage of the total number of minutes in a calendar month.
January has 31 days, or 44,640 minutes. If the SaaS company’s uptime commitment is 99.5%, then the service can be unavailable for up to 223 minutes without the SaaS provider being in violation of the SLA.
Service Credits: Most SaaS providers try to avoid these altogether if the service is not mission critical.
In some instances, a customer may require them or another compelling business reason comes along.
A generally accepted industry standard credit system is 1% of the monthly platform fees (not professional services) for each 1% miss of the uptime commitment in a given calendar month.
If in January the service is down 2,232 minutes, the uptime commitment is 99%, and the total annual platform fees are $120,000, then the services were unavailable for 5% of the month. The credit would be calculated as follows: [($120,000/12) X 5%] = $500
8. Defer to legal to discuss outstanding items
Let the experts step in at this point to identify what outstanding items they need to address in the contract. As the SaaS sales rep, you can emcee the conversation if needed, but give them the space to handle what they need to change or redline further.
9. Recap and identify any action items in a follow up email
Hopefully you don’t need to follow up — but in the event that you do — take charge of the recap and list out action items as necessary.
You may need to regroup with your own legal team or sales leadership. They may need to verify something with security.
Deals slow down but taking a proactive approach to them, even when they include complicated pieces like legal contracts, will help move them along.
10. Close the deal
Congratulations — you made it. Signatures are in and Slack has been notified. Enjoy the congratulatory GIF and emojis from the team.
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