CONTRACT MANAGEMENT IS AN ENTERPRISE TASK

Corporate legal department administers a company’s activities to achieve its objectives while protecting the company’s rights in the process of discharging its obligations. In-house counsels are looked upon as experts in various areas of law such as contracts, compliance and due diligence. However, the corporate legal team’s work spans over a much wider range and needs to include cross-functional activities.

Companies enter into agreements which happen at departmental level such as Human Resource, Procurement, Information Technology and Marketing and Sales. Legal department stands at the core of these operations in relation to contracts wherein it is necessary to collaborate across various other teams as the in-house expert in the subject matter. Given the various activities involved, it would be beneficial to involve practitioners from outside the legal team and subject matter experts in managing contracts rather than leaving it to the legal team. Such a delegation of responsibility needs to be carefully planned and executed strategically.

Interdepartmental collaboration

Teamwork is an inevitable element of successful business. Collaborating with teams across the relevant departments within a company enables improving productivity and finding new ideas and solutions. This requires a shared vision, responsibilities and a common goal to work in the best interest of the company. Installing such systems in organisations is critical in managing contracts to break silos and allow execution of functions and data flow smoothly. Where there are people from different departments involved in drawing and executing the contract, collaboration with such teams improves efficiency while reducing time required for reviewing the agreements and evaluating the risks more realistically.

Let us now consider an example of how interdepartmental collaboration works:

Legal team provides pre-approved standard contract templates. Other departments such as Finance, Sales consider the terms relevant to financial transactions, time period and such other specific provisions. The document is then sent to the legal department for review and approval.

It is necessary to establish certain guidelines while collaborating across various departments to avoid risks. With the use of pre-approved standard templates, the Finance or other teams will have the necessary material for an initial contract review. Nevertheless, this needs to be a continuous process wherein the drafts are updated regularly considering the legal position and the changes to applicable statutes. Therefore, having technological solutions installed ensures that the relevant participants contain access to the updated and accurate information.

Adopting technology to streamline contracts management across the organization

Having a dedicated software for managing contracts in place simplifies interdepartmental collaboration and ensures that the process takes place in a secured environment. It is as follows:

Centralized repository

For the purpose of interdepartmental collaboration within a company, it is essential to organize and store data in one location. With this anyone involved in the process would be aware of where to find the relevant information. Moreover having centrally stored data serves as a single source of truth which enables consistency in reporting and monitoring the process while reducing dependence on the legal team.

Assigning roles with access controls

Given the various participants from across the organization in the process of contracts management, it is imperative to ensure safe and secure access to relevant information with the respective person. Where multiple people, access a centralized repository, care should be exercised in controlling access to sensitive and privileged data. Contracts management software ensures access controls while assigning roles to particular individuals.

Pre-approved templates

While including participants from several departments in an organization to review and manage contracts, it would be useful to standardize the process. Various solutions for contracts management provide features to tag important information such as milestones and contract value. By having pre-approved templates in place and incorporating appropriate guidelines, the legal team can ensure that any person reviewing contracts is aware of the key details. Hence, the legal department can drive consistency and accuracy in reporting.

Contract reporting

Where there is interdepartmental collaboration and several teams share responsibilities, reporting is crucial to keep everyone on the same page. Participants across the organization can set up alerts and notifications and automatically schedule and share reports to respective stakeholders to keep them informed while reducing manual work.