This is the first blog post in Paqt’s series of letters to diligent entrepreneurs, busy dealmakers and those who make things happen. Our goal is to make your dealmaking enjoyable without compromising the speed and legal security.
Welcome to Paqt’s blog! Although key questions for 2020 are how to stay on float, possible pivots and sourcing enough customers to keep the business running, I’d like to start with the foundation, because even strong businesses struggle during uncertain times. In this post we will cover legal technology, digitizing business processes and this non-stop, iterative mindset of improving your operational efficiency through process improvements and using the right technology.
Legal technology for contracts and digital agreements might not be as boring as it first sounds. Typically, one would think that legal is all about bureaucracy, complex regulations and large 30-page fine print documents. I will try to change your mind pertaining to legal-tech and provide some learnings that worked for me and other more established entrepreneurs. First of all, commercial law and related legal institutes are the backbone of agreements we all enter into. Why would a car need brakes? You might answer: “To stop.” but that’s only partially true. A car would also need brakes to be able to accelerate faster. The same analogy works with law and legal technology. You would desperately need it to be able to do a lot of fun things. s an example – signing contracts and formalizing how much and when would you get paid.
It is that oil that preserves every moving part of your business. New customers and deals, offices and commercial spaces, and the people you hire. Having a solid legal basis today during the wave of digitalization is especially important and results in having more flexibility, speed and opportunities to grow. The world of exciting and interesting things unveils if you are looking on these matters from the right angle. Here, secure deals, backup warranties, guaranteed payments, faster agreement cycles, final signatures and approvals that are enforceable actually help your business flourish and put on a big smile on your face in the end of the fiscal year. There are also some less exciting aspects like manually forming invoices, reviewing large contracts, going back and forth on a specific clause. You can’t get rid of them totally but if you take a holistic approach to dealmaking and contracts you’ll be able to optimize or automate some task and make the process less painful.
We tend to forget that all of these steps are actually part of the same big agreement process. Because of COVID-19 and remote work environments, most dealmaking sub-processes are being digitized and rushed Not without problems and pains for the frequent dealmakers. What are the problems? The good old processes are literally copied and pasted into the digital world without proper design thinking, usability and proper user experience. One might realise that the hand-drawn digital signature is not the most visually appealing drawing you’ve seen, especially for an important contract; that you really don’t know who is on the other side of the email address; that digital contracts are still text based, have no video, audio or images as part of them and are formatted to fit standard paper layouts to fit in an envelope; that you have to move from tool to tool to properly process each step and pay all of those subscriptions which add up quite fast; that for the red-line (document comparison) process you have to go back-and-forth via an electronic letter system (email) sending multiple letters to multiple parties and then trying to glue all of the inputs yourself somehow; that when forwarding emails attached documents would get lost; that for international deals you feel legally insecure as you are not very sure how the agreement would be enforced in the first place; that… (drop your key pain points in the comments below – you are not alone!).
The world has evolved, so did agreement-related needs:
– Years ago, you would have used a wax seal, quill a hand-written guarantee letter or a contract and the power of your word to manage the complexities of the business world (don’t forget about the pigeon mail).
– Today, we’re using our computers with PDF and Word document editors, e-signatures, contract templates, invoice generators, some workflow automations and a bunch of other solutions. It’s a mess and we have to be able to navigate this complexity to keep the business growing. Today, our processes have inherited the old views on how deals should be operating based on old tools that are no longer existent like seals, stamps, quills, etc.
– What awaits us tomorrow? Virtual deals flowing in virtual and augmented realities, neuro-linked deals, something ever more futuristic? That might be too far into the future but there is a vision that deals have to be seamlessly flowing on a platform capable of ensuring efficient, safe and painless agreement experience, bold enough to be disrupting the way things were done yesterday, without compromising the legal requirements set by legislators.
Any agreement has 5 key stages:
– Finding the business partner to deal with and building up trust.
– Negotiating the main terms and conditions of the deal until settled on an agreeable option for all sides
– Formalizing the agreement, putting it “on paper” (today on digital screens rather than on paper), signing it and shaking hands
– Managing the on-going relationship, exchanging value, funds, related documents and reports, etc
– Closer to the end of the relationship, archiving the flow with all evidence for record retention purposes (regulators, stakeholders and dispute management)
There are lots of sub-processes under each stage with a variety of tools linked to those. Communication tools, contract template libraries, contract generators, signature tools, invoicing tools, payment solutions, budgeting, task and time planning tools. All becomes this big soup of your digital dealmaking and contracting online. For each you would have to test and pick the best tools and assemble a cohesive system. If you don’t spend enough time, money and don’t advise with legal consultants you might not get paid, miss deadlines or expose yourself to unnecessary & avoidable legal risks.
Before you actually jump into the world of agreement tools and the continuous improvement cycle, here are some practical tips to stay on top of the cyber wave and address the dynamic changes in agreements:
– Change management – focus on problems you have, research how they are managed today, create a plan and implement them. Ego and lazy implementation must go if you want to strive. Don’t say, “we are doing it because I said so,” rather listen to what makes sense, what serves the end-customer well and what would help you stay on float and succeed. Analyze your own progression and development and those key moments in your life and the life of your business. Extract the essence out of those moments and codify the steps that worked for you in the past to use a similar approach in the future. This pertains only to the methodology, not the actual changes you’ve made as how things were done in the past may not be the best solutions in the future.
– Adapting quick – tightly related to the previous point. If you know something is inevitable, stop postponing and implement the change identified with speed, hire/fire/cut/add, just accept it and do it. The one who adapts fastest wins (similar to the evolution of species).
– Assess your current processes and compare them with others – look on what the top companies do in your sphere, look on the fastest developing niches, more tech focused, antifragile and quick. Divide your business and sales processes into smallest measurable chunks and evaluate if you have redundancies, time wasting manual task and other mechanical, routine activities. Work on those. Create a script or use a tool or better use a platform, which has all of those tools in one place.
– Quantify – test, measure and evaluate your output quality and efficiency metrics. This will provide you a holistic understanding pertaining to your processes and the produce/service delivery. It would serve as a comparison basis for future tests and improvements and will help you better understand what’s actually happening in your business.
– First research then take action – measure seven times and cut once. on’t rush without knowing what you’re doing. Do your research first, understand the first principles, make an intelligent determination and only then rush it as quickly as you can and make things happen or change a specific element of your business
– Process automation and workflow optimization – how could we do what we have done before efficiently, in an automated fashion, lean and smart. Utilize existing digital tools, service providers and lifehacks to boost your bottom line and get the best ROIs. Think about your business tech stack (or the cloud of tools you use) as a separate entity or even as a digital twin of your business processes, which have to evolve with time and deliver the best outputs. Just as you would change the car or an iPhone, you have to keep looking for the best tools for your business, because it’s actually worth it and it would deliver better results, faster operations, less routine and more time to focus on the substantive, strategic business tasks.
State of future and where we are heading with Paqt.
We call all of those processes and tools involved in your digital agreements – the dealmaking infrastructure, and Paqt’s goal is to lay the foundation for it.
To help those who care about the efficiency and who want to enjoy entering into agreements online we aim to offer an alternative – an agreement platform where you can negotiate, formalize agreements, sign, pay and manage on-going relationships all in one place. It’s easy, efficient and ready-to-use. By layering legal tools on top of communication you get a flexible solution without compromising the legal security, which is enforceable in court. We believe that a professional chat with well-designed flows is the most efficient form of digital communication, which is compliant with most legal systems.
Of course, transmitting your neural patterns and video/audio communication might be more efficient. Those types of information exchange are not structured enough both due to the recognition quality and meaning decoding – there is room for errors while trying to convert unstructured data to structured snippets of information, for which contracts are very rich. There is a separate class of software that solely evaluates written text contracts and still some of them make errors in understanding what was written and agreed upon due to vague or complex formulations. Nonetheless, we still believe that this is where it is all heading. Most of the contracting would move to VR/AR spaces and the legal infrastructure would just serve as a back-end structure for virtual deals.
Think about what you have today, focus on the key challenges, face the reality and try avoid the bad habit of postponing serious changes in your business processes, sales cycles and dealmaking tools. Keep your key priorities in mind. The desire to serve your target customers and never stop adapting to changing realities. Do your research, look on the direct and indirect top performing competition. Learn from other spheres like physics, phycology and philosophy and then act on the first principles and key findings fast and without hesitation. Stay on top of what’s available on the market for business tools as you would with the latest phone/computer/pair of sneakers. Evaluate if the ROI in time or money makes sense, try things out and if they work, keep breaking your existing structures and keep building new ones.
I’d like to end this letter acknowledging your time – thank you for spending the most valuable asset on this piece, I hope that in exchange, I have provided some fuel for thoughts and actions that might save exponentially more time and efforts for your future business affairs.