Scalable Contract Software Facilitates "Going Green"

Monday, May 2, 2011 - 10:55

Editor: Please tell our readers about SolarCity's business and your responsibilities at SolarCity.

Weissman: SolarCity is a vertically integrated company in the solar space. We finance, design, install and operate solar power systems for both residential and commercial customers.

I am its General Counsel, having been here since September 2008. We have roughly three different areas or departments within legal. We have a project finance department which does the complicated special purpose vehicles and entities from which we derive capital to put our systems in place. There is a group that deals with the sales team to support revenue generation. There is also a corporate person who does our corporate equity financings, our corporate compliance work, and, if we're lucky enough to become a public company someday, to support that function as well.

Editor: Why did SolarCity choose to automate its sales agreements?

Weissman: Law and lawyers are still stuck a couple of decades behind business. We still rely on strange incantations left over from medieval times like suits of armor.

The rest of America and the rest of the business world run business software. They run CRM, Salesforce, Oracle and SAP and other applications to scale their businesses. What you mostly find in-house is a lot of lawyers who come from law firms where they are used to billing themselves out by the hour. When you bill yourself out by the hour, the commodity you are selling is time, not efficiency or value.

When you come in-house the equation changes; your time is irrelevant. Your production and efficiency are all that matter. At my first GC gig in 2004, I did the same thing that every lawyer does. I started with my templates, and then typed out the things needed to change my template each time. So, every single salesperson had to come to me each time he or she wanted to get a deal done.

Six or seven years ago, I realized that the way to scale infinitely is through technology. And, I decided to use technology as a force multiplier to make the business more efficient.

Editor: What are the benefits to SolarCity's salespeople of using an automated sales contract creation system?

Weissman: It used to be that every salesperson out there would joke that the legal department is the "sales prevention department." The biggest sell for automation is that it cuts me out of the loop. It permitted me to tell our salespeople: "If you answer the 20 or 30 questions in the questionnaire and you haven't varied from the standard process and the standard contract we provide to our customers, you're going to get a contract, and you're not going to have to talk to me or anyone on my team - you're going to be good to go."

"You can create a contract at one in the morning, one in the afternoon or on a weekend, whenever you want. You don't have to go through my department, and we'll never slow you down."

That is a beautiful thing for them because they know they can go directly to the customer without being slowed down. For me, it lets me scale infinitely whether I have 100 salespeople or 1,000 salespeople.

Editor: How has automation impacted your law department?

Weissman: It has made our job as lawyers more exciting. We no longer pore over individual clauses of essentially the same contracts. This frees up our lawyers to use their talents more productively.

Editor: Why did SolarCity select ContractExpress?

Weissman: This is the second time I've purchased this kind of system, so, I've had literally years to look at different systems. I did a review of about a dozen different companies, but only ContractExpress had a user interface that was highly intuitive and offered a system that was perfectly and infinitely customizable for our business.

ContractExpress provided our salespeople with exactly the interface they needed so that they could use the product effectively. It also offered massive flexibility and the ability to let me customize it for my salespeople so that they would be happy with it.

Another extremely valuable feature is that it is nearly impossible to make a mistake. A salesperson could misspell the client's name - but even that is correctable later in the process.

Editor: How does ContractExpress integrate into the rest of SolarCity's business process?

Weissman: Right now, and it's still early days, we're going to use ContractExpress to automatically alert people about contracts being created or signed.

ContractExpress is built so that all of the variable fields can be metadata. We're purposely inserting metadata so that we can create a database with the detail of all signed contracts. Someone can come to me and say, "I want to know all of the contracts for a midsize system in the state of Arizona in such and such a date range," and I can provide that information without having to look at an Excel spreadsheet or pull separate things together to find the answer.

Editor: Have you been able to assess the dollar impact on the bottom line, and if so, what is it?

Weissman: I haven't tried to do that yet. Off the cuff, I'd say that if we were not using ContractExpress, the legal department would need to hire at least one more paralegal. As to the sales department, there are even more substantial benefits. The delay occasioned by the need for legal to review each contract would undoubtedly lead to lost contracts since concluding a sale quickly is the essence of successful selling.

Undoubtedly, ContractExpress has enabled our salespeople to close some sales before buyers' remorse sets in. It undoubtedly has played a big role in enabling our sales force to keep up with the growing demands for our product as reflected in our revenue growth. Just to give you a sense of scale, we've doubled revenue in each of the last four years and doubled head count as well in the last two years. We were founded in July 2006, and we've gone from zero to 1,100 employees and a very, very significant revenue gain in just four and a half years. If ContractExpress brings in one more deal or saves one deal from going badly, then the whole system has paid for itself, and we do hundreds of deals a year, so that is the value proposition.

Editor: Please explain how you implemented ContractExpress and the timescale?

Weissman: I was really fortunate to have a phenomenal legal team when we rolled ContractExpress out. I can't stress enough how great the people in this department are. I have a paralegal with a background in computer programming. I have another lawyer on my team, UCLA undergrad, Yale Law School, who has an amazing computational mind.

We had it out in beta within 90 to 100 days. At the heart of ContractExpress is a legal Word document. Adding text and business rules to a Word document is fairly intuitive, and it certainly wasn't like we were programming in a foreign language. We got tremendous support from the team at ContractExpress.

Editor: What's next? Are you planning to expand the scope of the system, and if so, in what way?

Weissman: We are still in the early stages of deploying ContractExpress more broadly in the business. We have already deployed it for a couple of the commercial products that we use. We used it first with our mainstay power purchase agreement for commercial clients. This is where we install a solar power system on their premises and then sell the power that it generates to them, which offers companies the opportunity to go green and to save money at the same time. That is the beauty of the solar power industry.

But the savings in legal time that have already resulted will greatly increase as we automate agreements in other areas - for things like NDAs and subcontractor agreements, for example. Yes, automation is impacting the department, but it will impact it much more as we apply it more broadly.

I'm now working with the ContractExpress team to utilize some of their resources to help me scale out more rapidly. My one paralegal who handles ContractExpress already has a lot on her plate since she's also handling the day-to-day sales work under the supervision of an attorney. Therefore, I'm using the ContractExpress team to help me build out more templates to leverage the global dictionary.

To get new applications of ContractExpress up and running as fast as I can, I am driving my team really hard. I am very appreciative of the help of the ContractExpress team since you don't make a lot of money as a software vendor by providing hourly support.

I would also like to see ContractExpress used in the residential side of our business. There we are currently using an existing homegrown solution that doesn't have the same kind of fluidity to it or natural ease of use.

I'm going to advocate for the ContractExpress solution because I think it is more elegant. The ContractExpress system itself is initially more costly than the homegrown solution, but the homegrown solution doesn't scale and requires more man hours and personal attention, so it has a cost to it too.

Editor: Do you have anything else to add that you think will be of interest to our readers?

Weissman: I'll sign off with a plug for going solar. It's not too expensive or difficult. It's easy to do. You save money from day one, and it feels great to tell your kids that you're helping to save the environment.

Please email the interviewee at sweissman@solarcity.com with questions about this interview.