Master services agreements (MSAs) are meant to make life simpler for sales teams. But clunky manual processes can have the opposite effect. How do we fix it?
This deep dive explores who is affected by MSAs, why they might benefit from simplifying their process and content, and how to do it. Use the navigation below to find out more, or explore our deep dives on other contracts, like NDAs and employment offer letters.
What’s an MSA?
A master services agreement (MSA) is where a business and its customer agree most of the terms that will govern their commercial relationship. This contract is common in high-velocity sales organizations, especially SaaS businesses, because it means sales reps can to send out order forms that include key commercial terms that need quick decisions from the buyer, with the much longer legal terms appended in an MSA for their legal team to review.
Who do MSAs affect?
Who's affected by an MSA will depend on the particular business. For example, the MSAs we typically see in Juro concern different teams at different points in the process:
Salespeople. Account executives and sales managers append MSAs to the order forms they send out to prospective customers - such as other businesses buying SaaS. Salespeople are incentivized to get deals over the line, which can result in unsanctioned changes to terms in the MSA, particularly if contracts are not created and controlled from templates.
Legal counsel. A company’s in-house legal team would typically ‘own’ the commercial terms, defining and approving any changes to standard positions.
Approvers. Various teams in the business might need approval oversight of MSAs – sales leadership, finance and perhaps even C-suite, depending on the impact of the contract.
Authorized signatories. Who these people are will vary from company to company.
Customers. Potential customers signing up to the terms within the MSA are, of course, key stakeholders in the process.
MSAs are a key touchpoint during the sales process - particularly in a B2B environment. In a B2C environment, terms are seldom negotiated and are often not even read; think about how many times you've opted into the Ts and Cs of apps like Instagram, WhatsApp, Houseparty and Twitter without digging into the privacy concessions you’re making.
But in a B2B environment, the commercial relationships parties agree to could last years - decades, even - and be worth hundreds of thousands or millions of dollars over that period. The MSAs that establish these relationships could define any number of business-critical factors, like data privacy obligations, reporting obligations, indemnity caps, breaches and, of course, headline commercials like renewal dates and financials.
At Juro we often say that contracts are necessary, but they don’t have to be evil (honestly). The MSA really embodies this idea. Yes, it’s long, detailed, serious, important and all the rest of it, but it should also be accessible and persuasive.
At the risk of stating the obvious, a contract that’s off-putting will put people off. This means signatures taking longer to secure and increased friction for the business. On the other hand, a contract that’s simple, clear and accessible will lead to faster signing, and faster recognition of revenue. With this in mind, how do you simplify your MSA?
How to simplify the MSA process
Before you worry about the content itself, make sure that your contract process as simple as possible for both parties. In our experience, two things make MSA processes complicated: multiple tools and file-based workflows.
1. Find one platform that can do it all
MSA process usually means finding the right version of a Word document (at best - sometimes the MSA is a scanned version of something printed); trying to get it in a fit state over email, phone and meetings; negotiating in tracked changes and via email; getting this version into a PDF; getting this into DocuSign; and then saving it somewhere sensible, whilst sending it to all parties concerned.
Just find one platform that can handle templating, contract creation, negotiation, signature and management. This will also save you money.
2. Make your contracts dynamic and digital
Lots of tools means lots of files. This means lots of room for error and data loss, and a messy experience for your counterparty. Instead, choose a contract collaboration platform that works with contracts as dynamic, digital data models, so your data is structured and searchable from day one, and version control isn’t ever a problem again.
How to simplify your MSA content
This is really about legal design, and of course the specifics of which commercial terms you can include or remove in an MSA are decisions for your legal team. But there are some quick and easy things you can do to make your MSAs friendlier:
Brand it. Including the logos of both companies at the top of the document is a great way to add colour, visualize your new commercial relationship and make the contract more engaging.
Foreground the key terms. Look at your negotiation data to work out what needs to be front and centre to move the deal forward and get closer to signature. There’s no point hiding contentious terms in jargon-laden subclauses – people will find them. And why are you trying to hoodwink your new commercial partner anyway? We’re big fans of Verity White’s reverse sandwich approach to contract design.
Useful features for simplifying an MSA
If you’re looking to use software to simplify your MSAs, then these features will come in handy:
Internal and external commenting. Brevity in your MSA is likely to keep negotiations light, but make sure that your contracting platform allows internal and external commenting so you can give additional detail quickly and transparently.
Mobile-responsive eSigning. You've simplified your MSA to help you get a quick signature, so make sure you’ve got the technology that allows secure signing on any device.
Mass actions. If you've managed to get your simplified MSA through the collaboration and negotiation process quickly, the last thing you want is for it to sit in someone's unruly inbox, waiting for an authorized signatory to work through hundreds of signatures. Find a platform that lets you carry out mass actions to keep things moving.
Dynamic editor. To add features like logos using JPEGs or even GIFs, you’ll need a rich text editor that can handle visual content in your contracts.
If your contract workflow is supercharged with all these features, your simplified MSAs will enable commercial and business teams to achieve a faster time-to-close and - hopefully - happiness on both sides of the contract.
Is simplifying MSAs a pain point for your business? Is your SaaS company or marketplace growing so fast that the contract process is out of control, with friction pre-signature and a lack of visibility post-signature?
If so, get in touch and see if you could benefit from a contract collaboration platform that enables businesses to agree and manage contracts all in one unified workspace.