No legal, business or professional relationship has any value in the eyes of law without a proper contract. Further, it is advisable to execute contracts in a written form by competent parties and signed by properly authorized signatories.
Contracts are the key legal documents that drive legal, professional and business relationships of a company. Companies require execution of a wide variety of contracts with their business partners, customers, employees, third party advisors and service providers depending on the legal and business requirements of the Company.
Managing and administering flow of contracts related work is no easy thing, it requires a dedicated team of experts in contract management services, who can handle the entire contract lifecycle management (contract creation, contract negotiation, contract execution, contract maintenance and storage).
Every company with considerable volume of contracts should have a dedicated contract manager to manage and administer flow of contracts work day in and day out. Contract manager is the key position with a big job at hand to create, evaluate, negotiate, and execute contracts with ultimate target of mitigating contractual and legal risks and liabilities associated with the contracts.
The primary jobs of a contract manager are to:
(i) create standard and customized contract templates as per the legal, business and compliance needs of the Company and
(ii) negotiating on other party contract template to ensure Company’s legal, compliance and business risks are properly secured and contractual risks and liabilities are appropriately mitigated.
A Contract manager has to perform different duties and responsibilities in course of managing and administering contract lifecycle management of the Company. Such duties and responsibilities may include:
a) Creating different types of contracts templates as per legal and business requirements of the Company
b) Negotiating the contracts after a thorough review and analysis of contracts to identify risks and liabilities on one side and rights and advantages to the Company on other side with the execution of contracts.
c) Execution of contracts with legally valid execution process by authorized and competent representatives.
d) Facilitate, build and develop cordial relationships with Company’s employees, clients, business partners, business advisors, etc. Such cordial relationships will play a crucial role in building and establishing longstanding business relationships which are critical for success of Company’s business in long run.
e) Educating the internal stakeholders about the contracts risks and liabilities from time to time and make them understand implications of poor drafting of contracts and the monetary implications the Company could be exposed to.
f) Maintaining all contracts and related documents in a systematic manner for easy access to appropriate and authorized personnel of the Company with assistance of innovative and emerging technologies.
g) Ready to address concerns of internal and external stakeholders in course of executing contracts and their implications on the business and stakeholders involved in the contracts or associated business transactions.
h) Keeping a track of highly risky obligations agreed by the Company and ensuring compliance by the Company– any breach of such highly risky obligations could cost the Company a fortune and Company could have to pay millions in damages.
i) Keeping a track of liability triggering points based on specific timelines (such as payment terms, maintenance services, renewal or extension of contracts) etc.,
j) Updating existing contract templates and related policies and procedures to meet everchanging legal, business and compliance requirements of the Company.
Contract Manager and other departments
Different departments in a company have requirements for different agreements.
Procurement team – Service Agreements
HR team – Employment and consultant Agreements
Finance team – Loan and Credit related Agreements
Thus, a Contract manager’s duty is not just limited to managing contract lifecycle management of contracts, but also to coordinate with different departments (deal, business, revenue teams etc.,) within the organization to know concerns of respective department about specific contractual provisions applicable to such department and to work out with them to address such concerns.
Further a contract manager needs inputs from different people within the organization on varied legal, business and economic aspects covered in the contracts based on type of transaction from time to time.
In order to create and execute a contract catering the needs of different departments involved in the transaction, a contracts manager should have exceptional communication and interpersonal skills and knack to under legal and business requirements of not only organization but also of each department individual. Failure to understand such has severe complications in terms of legal and business at organizational level and departmental level as well.
It is always useful to develop a standard questionnaire balancing legal and contractual aspects handled by different departments and circulate it with respective departments for their inputs – following the receipt of such questionnaire back, based on inputs and concerns appropriate discussions can be conducted with concerned people, it could help to ensure all stakeholders involved in a transaction are on the same page.
Ultimately, to be a successful contracts manager one should know nuances of contract life cycle management in conjunction with good communication and interpersonal skills and legal and business acumen to serve contract management requirements of organization and different departments.
Qualification and Experience
Typically, lawyers serve as contract managers in different organizations. However, there is no blanket rule, that candidates with legal educational qualification are the only ones competent to do well as a contract manager.
Depending on the line of business, people with no legal back ground can also work as contract managers. For example, in construction industry, companies prefer to recruit candidates with civil engineering degree or diploma as contract managers. Similarly, in some businesses, candidates with degree in business administration may get the job of contract manager.
A lawyer with zero experience may not be able to get a contract manager job, yet a person with degree in business administration and two years of experience in contract lifecycle management could get a contract manager role.
It is evident that rather than education, profile of relevant work experience and interest of the candidates that could play crucial role in getting a job of contract manager.
Certain skills that are desirable for a contract manager
Drafting : Legal drafting skills is the most crucial skill a contract manager should have. Mastering the art of drafting of contracts and legal documents is crucial in deciding the success of contract manager in long run.
Understanding : Ability to understand legal and business implications of any action / inaction on a company’s business is key in developing and customizing contract templates to match with legal, business and compliance requirements of the Company.
Communication : Communication skills (written or oral) must for contract manager to establish clean and clear communications with internal and external stakeholders.
Interpersonal skills: Interpersonal skills are quite crucial for a contract manager helping them in establishing long-term business and professional relationships on a cordial note.
Technical skills: Contract manager should have technical skills in handling Microsoft documents (word, excel, PPT etc.,) as most of work in contract lifecycle management revolved around use of such documents day in and day out. A Contract manager should have keen interest in learning use of new and emerging technologies as most of the organizations are automating their contract life cycle management process.
Attention to detail: Attention to detail is an essential trait for a contract manager as he has to be sharp and always look out for each piece of crucial and important information in the contract as there is no place for any margin for error as any slight error could cost company millions.
Risk identification and mitigation: This too is an important trait a contract manager must develop and master – the art of Identifying legal, compliance and business risks in a contract and sorting out a plan of action to mitigate such risks to safeguard legal, economic and business interests of the Company. This can be mastered in course of time and only with relentless practice.
Industry specific knowledge: To have a diversified career as a contract manager in different fields, contract managers need to develop and work on learning different industry specific requirements of different industries. This helps in building a long lasting career in contract management field irrespective of the line of business you are working.
For example, to work in Software industry, contract managers should have specific expertise in handling licensing agreements and SaaS agreements. To work in procurement industry, contract manager should have specific expertise in working on different variety of service and consulting agreements. To work in capital market industry, contract manager should have specific hand on expertise in drafting shareholders agreements, share subscription agreements, partnership agreements etc.
Conclusion: To sum up, contract manager job is to not only administer the contract lifecycle management but also need to safeguard legal, economic and business interests of all stakeholders within the organization and to align organizations legal and economic interests with counterparties legal and economic interests by rightly balancing the legal risks, liabilities, rights and obligations of the parties to a contract. Further, to develop and establish cordial personal and professional relationships with all colleagues, business counterparts and professional counterparts to have a successful and long lasting career.
