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What is your company’s policy on legal red lines?

Does your company allow for red lines for deals of any size? (I imagine this depends on how big your deals are to start with)


for my company, say there are 3 tiers of plans, for the largest tier we’d always expect some kind of red lines - deal size is around 100k annually


mid-range deal size is 42k or so and we really try to discourage red lines but if pressed we will give them a word document but say not to carve it up.


small tier is around 27K and we say we don’t accept any red lines at all. They need to accept our standard terms as is.


I find this always a super annoying part of negotiation because I find at the mid tier people would expect to negotiate on terms and my boss tries to tell me no.


even if I am extremely up front with our policy it never matters and people still do it. I am wondering if this is normal or is my company weird about red lines?

👑 Sales Strategy
☁️ Software Tech
3
1nbatopshotfan
Politicker
+5
Senior Director, Enterprise Technology
Nothing under 50k first year value gets a redline, unless it’s a strategic account. 
ja
jackodiamonds
Opinionated
+4
Account Executive
Wow this is news to me. We agree to redline all size agreements from like $5-100K+. I always thought it was insane to do it for the smaller ones but hadn't thought of... just telling them no. 
StringerBell
Politicker
+7
Account Executive
Interesting. Our perspective is always that below a certain amount of money we shouldn’t have to concede any risk and adjust our terms for them. Creates a big pain in the ass though.
JDialz
Politicker
+5
COO
I'm familiar with red tape, but what is a legal red line?
StringerBell
Politicker
+7
Account Executive
Refers to when you send your terms of service to the company your trying to signs legal team in a word document with track changes enabled. They will add comments or try to change words / add stuff and it will create literally red lines in the document so I assume that’s where the term comes from.
JDialz
Politicker
+5
COO
Ah okay, gotcha. There is generally no negotiating in my industry so I was unfamiliar with that process. 
npm55434
Catalyst
+3
Associate Sales Representative
Average transaction size on deals at my company are $500,000 to $40 million (financing, this is not profit or revenue). So nearly every contract negotiation involves red lines from the potential client's legal team and this process can be long and painful on any deal. 

As a salesperson, we typically bake in 2-4 weeks of contract negotiations on the smaller U.S. only deals. The larger the deal and more countries involved means the negotiations can go from weeks to months long. 
CuriousFox
WR Officer
+11
Senior Account Executive
The legal team will negotiate with their legal team depending on the value of the contract. 
Coffeesforclosers
Notable Contributor
+11
Director Sales and Market Development
We allow red lines on all deals. But we are more hard-nosed in mid market and extremely bendable to big logos and enterprise. Hell we even put it on big logos paper vs ours sometimes 
StringerBell
Politicker
+7
Account Executive
What is the range of your deal size
Coffeesforclosers
Notable Contributor
+11
Director Sales and Market Development
MM 50-125k, ENT $125k-MM

Smb/base- $6k-$100k. 
MMMGood
Celebrated Contributor
+10
Senior Account Executive
The guideline is only for deals over $100k but they will usually bend if it’s close, like over $90k. 
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