Legal for SaaS: The dealmaker

An in-house SaaS lawyer has many roles to play. Lookout's legal counsel, Colin Levy, talks about legal being an enabler and helping commercial close deals.

In-house counsel tend to be generalists, by necessity.

Smaller companies including tech startups tend to not have huge legal teams, yet their salesforce will grow, often significantly as the company expands. The challenge for the in-house counsel is to support and enable your sales team as it scales, even as the legal function stays small in comparison.

So while I try to be a generalist, as an in-house lawyer advising a fast-growing SaaS company, it is in some ways inevitable that transactions are my main focus. Being on the front lines with the sales team as they get deals over the line is a really enjoyable part of my role and one of many areas where legal counsel can add genuine value in driving the company forward.

In the negotiation stage, there are many elements where sales colleagues might want or need support from their legal counsel. For example, a sales rep might want to make sure a certain provision is included or need me to draft a certain clause or the counterparty might request a certain provision and my colleagues need me to jump on a call and find a solution that works for both sides.

Generally speaking, salespeople need legal counsel to draw clear and yet flexible boundaries around legal positions the company is willing and not willing to accept and at the same time help navigate those boundaries to ensure that legal helping to facilitate the closing of deals rather than blocking them.

If your SaaS company is successful and growing, then the volume of deals will likely increase month on month and if their average value of such deals increases, so too might the complexity of the contracts associated with those deals. With increasing volumes, ever more complex work, a growing salesforce, and with a legal headcount that stays more or less the same, how can you continue to offer the same level of help and support to your commercial colleagues?

Your goal with encouraging self-service isn’t to turn your sales colleagues into transactional lawyers; but instead to help them be confident in answering commonly asked questions

Self-serve and enablement 🙏

The key to working with sales is to be a partner with them on deals and empower them with knowledge to help them help themselves. Of course, your goal with encouraging self-service isn’t to turn your sales colleagues into transactional lawyers; but instead to help them be confident in answering commonly asked questions by customers, be able to find and use templates and understand when and how to escalate inquiries. This enablement approach is key to being a user-friendly lawyer. So, how do you get started?

The first step is to make sure your own foundation is strong. In order to create processes and resources for self-serve, you need to genuinely and deeply understand the business that you represent and serve: from its commercial strategy, corporate structure, and ongoing business objectives, to the ‘why’ behind these items and the legal positions that the company takes. Unless you’re well-versed and confident in these, your own effectiveness will be hampered and your own processes won’t scale.

Next you need to work out how and where you’ll deliver information on your processes and procedures and legal positions. There are a variety of approaches to take here. Some companies choose to invest and implement sophisticated knowledge management platforms. Others utilize internal wikis or a simple dashboard, portal, or shared drive. What’s right for your company will depend on several factors including your company culture, current processes and procedures, and current stage of growth to name but a few. The key is that your colleagues know what exists and where, how to use it, and are encouraged to use it.

This resource centre should be a central place for answers to FAQs, common queries, and common templates, enabling colleagues to resolve issues quickly without needing to turn to the legal team. With regards to the FAQs, the answers themselves are useful but equally useful is to make sure that colleagues understand why these common questions arise; the better educated the salesforce is when it comes to frequent legal issues, the more easily they can avoid legal queries arising at all. This removes the need for them to wait on legal for every single question that arises, meaning they can move quickly and press ahead with closing deals.

To make self-serve a reality, you’ll also need to supplement this knowledge hub with regular in-person training on how legal works, on what to expect from legal, on existing processes as well as on some critical legal issues like data privacy. Investing time in this training will pay off when it comes to achieving frictionless collaboration on an ongoing basis.

Protect your time ⏰

Enabling self-serve is not just about making sure your colleagues use their time efficiently - it’s also about protecting and making the best use of your own time. The skills, insights and judgement you’re able to offer as an in-house lawyer are a precious resource for the company - particularly, in a SaaS business, when it comes to transactions. You have a responsibility to make sure that you deploy your finite resource in the way that adds the most value and helps the business achieve its growth targets.

Some companies have hard and fast rules about when legal can get involved - usually by deal size - but earlier-stage businesses might not have segmented their transactions in this way. Regardless, make sure you deploy your time to higher-value deals, or complex transactions where legal nuance is needed, rather than getting buried in low-value work.

This is easier said than done, but self-serve is key to making sure salespeople have the resources and support they need to close deals, without needing hand-holding from legal. Without an ability to self-serve what they need, commercial colleagues might feel abandoned or unsupervised, which can lead to salespeople freestyling on processes, or even worse, on legal terms in order to get deals over the line.

It’s imperative to avoid this, which is why so many fast-growing SaaS businesses turn to automation technology for routine contracts, so that legal can retain control without getting swamped by low-value paperwork.

Enabling self-serve in this way helps to mitigate one of the biggest challenges that comes with a fast-growth, sales-led SaaS business: people leave. Sales reps arrive, absorb all your advice, forge impressive careers, and then move onto the next challenge - taking all that accrued knowledge with them. A true self-serve environment means that new reps have everything they need to hit the ground running and start closing deals in accordance with legal best practice - regardless of whether they have had prior training or not.

Law school covers plenty of different topics, but beyond black letter law there are areas where legal education falls short. One of those areas is emotional intelligence.

Get the right mindset 💡

Support from key allies internally is vital to making this a reality. In my experience as the legal advisor of various different SaaS businesses, getting middle management on board is invaluable. If they’re invested in the idea that your role and the insight you offer are crucial resources to enable sales, they’re much more likely to support you in establishing robust processes that are actually followed.

Those processes need to be consistent, but they need to be adaptable - as you and your colleagues learn from your experiences, and the company grows and makes strategic shifts, your legal resources and positions will need to shift too. Legal processes need to be enforceable, but without being seen as an obstacle to closing deals. Salespeople have a healthy and immediate distrust of anything that gets between them and their month-end target, and it’s your job as a supportive in-house lawyer to overcome those perceptions and be an enabler rather than a disabler.

To do that, it’s useful to focus on the mindset you need to have. Legal should not be seen as as a business prevention unit, and it’s not your job to say no at every turn. You’re there to collaborate and support commercial colleagues and guide them, not simply tell them yes or no on things. You’ll need to play bad cop from time to time, but this must be framed constructively: if the proposed course of action isn’t the right one, be prepared to suggest alternatives that will help get the deal moving forward and help your colleague achieve their goal.

Achieving this way of working takes three things:

1. Aligned expectations: Setting expectations clearly at the outset, and being consistent and honest as you progress will help to build trust, so legal and sales teams can work in harmony.
2. Being accountable: If you make a mistake, a bad call, or perform a u-turn, admit it and own it. Being accountable for your own performance helps lawyers to achieve something they often find difficult: being seen as human beings and being responsible for when they make mistakes.
3. Emotional Intelligence: Law school covers plenty of different topics, but beyond black letter law there are areas where legal education falls short. One of those areas is emotional intelligence. Understanding where people come from and allowing yourself to be vulnerable and transparent is hard; it doesn’t come naturally to lawyers, but it can be a powerful force for effectiveness and for building relationships with other teams.

All of this will help you to move beyond the perception of an in-house lawyer as someone who gives legal answers to legal problems. If you can self-serve those fundamentals, you create space for yourself to offer real value to your colleagues; becoming a true business partner, collaborator, and resource.

This is a chapter from our eBook 'Legal for SaaS: how to scale legal work without scaling legal headcount'. Download for free. To find out more about how SaaS companies can manage their contracts, check out this guide to SaaS contract management.