If you have a child under 10, you almost certainly know all about balance bikes. If you’re unfamiliar, a balance bike is stripped of pedals, brakes, gears, streamers, baskets, etc. We used to teach kids to ride by taking a regular bike and adding training wheels—which is how I learned. It turns out that the key to teaching a child how to ride a bike is streamlined focus.
By focusing on the core skill—balance— and removing everything else, kids learn to ride at a younger age and with greater confidence. In fact, my oldest learned how to ride a bike at just three years old thanks to this approach.
But this is Part 2 of Making Legal Your Superpower, so we’re not here to talk about bikes. We’re talking about contracts—and the principle of balance applies just as well. By focusing on balance and removing the unnecessary, deals can progress faster and with less friction.
The inclination to create a bespoke agreement that puts all risk on the other side and is tailored for every possible scenario is understandable. That, however, is like the gears, streamers, and training wheels—it may seem helpful initially, but it often adds complexity and delays the ultimate goal. Standard contracts, on the other hand, are like the balance bike, keeping things streamlined and straightforward, allowing both parties to reach the finish line confidently and efficiently.
Starting in the Middle
Negotiating contracts doesn’t have to be a time-consuming back-and-forth. A key tactic for streamlining is to start in the middle, with balance.
Rather than starting with a one-sided agreement—which almost always leads to lengthy redline battles and unnecessary tension—use a fair and neutral contract that’s designed to start in the middle. This not only cuts down on time spent negotiating, but also builds credibility with your counterpart, making them more receptive to the terms you truly care about.
In fact, many in-house attorneys naturally move toward middle-of-the-road templates as their company grows. Consider the practice of tracking the most frequently negotiated terms, analyzing where those terms end up in the final version, and updating the template accordingly. If you start in the middle, where you often end up, you save a lot of time on unnecessary back and forth.
Standard Contracts
Now imagine you’ve removed the unnecessary complexity from your contract, and the other side is already familiar with it. They’ve reviewed it before, recognize that it’s fair and balanced, and only have a small handful of points to discuss. This can be your reality with standard contracts.
I understand the skepticism around using a contract someone else drafted. While not all deals can be standardized, many, many deals in the B2B SaaS world certainly can. And I have seen the benefits of standardization across the legal world.
Some benefits of using a standard contract include:
- Reduced Legal Costs: Bespoke contracts require careful review and revision from both sides. Each deal means at least one side is reading the contract for the first time and every clause is open for negotiation. The process is time consuming and can involve seemingly endless delays, which means higher legal fees and more time spent in back-and-forth discussions. Standard contracts minimize this by providing widely used terms that both sides already understand.
- Consistency and Scalability: Using a standard contract ensures that your team is working from a consistent set of terms across deals. It also helps your customers negotiate better. Standards speeds up the overall process by reducing the frequency of having to use your customer’s contract.
- Industry Acceptance: Many standard contracts are widely accepted in their industries. Consider the IAB Terms for internet advertising or SAFE for early-stage financing. This familiarity eases concerns and reduces time spent on negotiation. It creates a common language that both sides understand.
Standard agreements give both parties a clear, widely-agreed-upon starting point, reducing friction and shortening negotiation timelines.
The Power of Balanced, Clear Contracts
The key to reducing friction in negotiating is simple: have balanced, easy-to-read contracts. Common Paper standard contracts provide an efficient alternative to bespoke contracting that accelerates deal velocity without sacrificing legal protection.
By focusing on substance over semantics, and using tactics like starting in the middle and leveraging standard agreements, you’ll cut through the clutter, close deals faster, and reduce the number of issues that land on your lawyer’s desk. You’ll be zooming through negotiations like my three year old on a pedal bike in no time.