Four keys to developing and implementing a new contract management system
1. Assess the current state of contract management
Before you can implement a new contract management system you first need to accurately assess the current state of your system, identify its shortcomings, and propose a solution. And you need to enlist the help and support of other users of the current system outside the legal department, such as the sales team, human resources, and research and development.
Here are some questions to ask during your assessment:
- Are contract activities conducted in a fragmented or ad hoc manner? That is, are contracts drafted from templates created by individual counsel or managed simply by aggregating them in filing cabinets?
- Is there a commonly-held consensus that contracts take too much time? Involve too many steps? Are difficult/time-consuming to get approved? Are disorganized, especially when it comes to tracking due dates? Are supported by too few personnel, causing bottlenecks in the system?
If the answer to any of the above questions is yes, further consider:
- Are any of or all the current tools (filing systems, policies, procedures, spreadsheets, databases, information technology) inadequate for the task?
- Where within the process can automation help?
- What other systems, technologies or best practices in use elsewhere could help improve the current situation?
Once you’ve conducted your assessment and assembled the information, document your findings and solutions in a report. This report will help you make the case for change, to your senior leadership or any company budgetary authorities.
2. Get sponsorship from senior leadership
Because implementing a contract management process affects many different people across the enterprise and can involve a change in employees’ roles, corporate processes, and/or culture, it’s vital that you obtain sponsorship from company senior leadership outside of the law department.
Senior leadership can help:
- Articulate the importance of a contract management process to all stakeholders involved
- Set clear objectives and expectations regarding strategy, financial performance, and legal and regulatory compliance
- Drive the organizational changes needed to build a contract management process
- Direct stakeholders to implement the contract management process
- Allocate resources (such as funding, personnel, and technology) to implement the system
- Improve corporate strategies, policies, and practices
3. Engage internal business partners
For the success of both the development and implementation of the new contract management system, it’s vital to engage your internal business partners upfront. That way they can help offer their perspective, helping you develop the best contract management system for all. Involving them upfront also helps gain their buy-in, which is essential for both the successful development and implementation of your contract management system.
These business partners include members from:
- Marketing and sales
- Research and development
- Quality control
- Risk management
- Human resources
- Other relevant departments
4. Strategically manage the process by engaging the people
You’ve done your careful analysis, received sponsorship from senior leadership and obtained buy-in from colleagues in other key departments. Congratulations! You now have successfully developed an improved contract management system. But the real work has just begun, as you must now implement and maintain this system. The continued involvement of your legal department is key to doing so.
Specifically, the legal department:
- Helps ensure all key stakeholders are trained on the new contract management process
- Engages the right business personnel at appropriate stages throughout the contract management process
- Maintains and update the templates, policies, and procedures that underpin the contract management process
Keeping these four keys in mind when developing and implementing a new contract management system will help ensure the success of your efforts.
For additional best practices of contract management, explore Thomson Reuters Practical Law Connect.