How proactive is your legal department in the management of your business’ contracts? As corporate law departments adjust their orientation and become an increasingly strategic business partner focused on creating value for the business, taking a more active role in the contract lifecycle management process is one way to accomplish this goal.
Rather than simply responding to requests for review of a draft agreement or clarification of an existing contract’s terms, legal can add value by proactively instituting processes that speed up the contract creation, review and approval process. In fact, accelerating this process can actually create a competitive advantage for the organization.
In addition, legal can facilitate the storing and tracking of contract terms to ensure that existing obligations are being met and to minimize the risk that key contract dates pass unnoticed. And, if adding value isn’t enough motivation, Prashant Dubey in Corporate Counsel states that the increased scrutiny by companies’ auditing committees of their company’s contract management process makes it of utmost importance that the law department step up its involvement.
If you’re looking to kick-start your contract management process, start by taking an inventory of your existing agreements, identify the current process for each step in the contract life cycle for the various types of contracts, and identify areas of risk and inefficiency in the process. From there you can propose potential processes, and perhaps technical solutions, to stakeholders that will address the problem areas. By speeding up the time it takes to respond to contract requests and by creating processes to ensure compliance with contractual obligations, your legal department will be making a positive contribution to your company’s bottom line.