Yes! No matter what scale you are, if you are selling a SaaS product to the enterprise, you should hire a contracts & compliance manager as soon as you can. This role can accelerate your sales cycle, and help you meet the demands of the enterprise buyer.
Here’s what you need to know about hiring for this critical operational role. Note, I like the title “Contracts & Compliance Manager” (for reasons that will become evident as you read on), but for brevity sake, I shortened the title in this article!
Why you need a contracts manager
If you are selling to the enterprise, you probably already know why you need one.
You are excited to land that big Fortune 100 customer, they are ready to start procurement, and then BAM, they send you their 80-page master service agreement (MSA), their 600-question security assessment, their data processor agreement (hey, GDPR!), and buried in all of those documents are about 40 separate policies they want you to affirm that you have in place for your company.
It takes you three weeks to turn those documents back around, you and your team had to drop everything to answer the questions, your salesperson is pestering you every day fretting that the deal may evaporate, you aren’t quite sure you answered everything completely truthfully and on top of it all you spent $1,000 in legal fees to review that MSA. Nothing about this is good.
The realities & requirements of the enterprise buying process touch many facets of your SaaS organization including HR, operations, engineering and leadership. Not to mention the whole legal angle. Someone has to coordinate resources, keep track of things, assess overall risk, make business decisions and stay on point.
What a contracts manager does
I put a contract manager’s responsibility into three distinct buckets
- Customer contract management. Reviewing contracts (usually in the form of MSAs), redlining and providing commentary where needed. This aspect of the job takes priority over everything else because the name of the game is to turn those documents around quickly. Time kills deals. As part of this, they will jump on calls with your customer to negotiate terms when needed, and also loop in your legal firm if aspects of the deal or the contract language is unfamiliar to them. Ideally, they also monitor and assess overall risk, considering the totality of the customer terms you have agreed to across the customer base. They help you determine which concessions are “worth it” based on deal value and potential risk.
- Creating policies & and monitoring compliance. In a large organization, this can be an entirely separate role or even a team of people. But in the startup days, a competent contracts manager can handle these responsibilities. Most contracts and security assessments at the enterprise level require various internal policies regarding security, code of conduct, etc. Your contracts manager can create these policies (or consult with an external resource to do so) and work with HR to have them disseminated and communicated to your staff. This makes answering “yes” to the gazillions of policy requests so much easier. This aspect of the role can extend to collaborating with your internal engineering and product resources to create a business continuity/disaster recovery (BC/DR) policy as well.
- Running point on security assessments. When an enterprise customer sends you a security assessment, it lands with a virtual thud on your desk. These documents can be hundreds of questions, requiring input from many aspects of the business and no single assessment is the same as the last one. The way these questions are asked is unique to each assessment. It’s complicated stuff! I’ve seen SaaS companies take weeks to turn these back around, and while that’s ‘fine’, it slows down your sales velocity or puts the existing customer relationship at risk of churning. While a contracts manager will probably never be able to answer an entire security assessment on their own, they can be on point to corral resources and get these documents done. I like to have the contracts manager keep a database of past answers so that we don’t keep asking our internal resources to answer the same questions over and over again. With an accurate database of past responses, as much as 90% of an assessment can be completed by the contracts manager independently.
There’s lots more to this important role. In my next post I’ll share my contract manager interview process, sample job description and how to get them up to speed once you hire one! And, by the way, I have to point out that I am not a lawyer and don’t give legal advice, so always consult with your legal counsel about hiring a contracts manager.