Crucial Phases of Contract Management Process
The Legal Base – Analysis
Contract Management is a continuous process wherein the contract managers are responsible to streamline the lifecycle of a contract from beginning till the cessation of the contracts. Their core responsibility is to ensure that the contract is just not created but every step in between is adhered to till the contract ends. These steps include creation of a contract, negotiation, execution, compliance, storage, amendments, timely renewals, and dispute free cessation. These steps can include many minor steps in between which entails, initial requests, getting approvals, obligation management, auditing, revisions, which go unobserved while managing large scale contracts. Therefore, understanding the different phases of a contract can help in optimising and managing the extensive and wide range of contracts that can make your contract maintenance stronger.
The Legal Base (“TLB”) is a contemporary Legal Process Outsourcing firm that creates solutions while managing through these phases rather than just following the dyed-in-the-wool methods. Since contracts play an extremely crucial role in businesses, TLB focuses on opportunities, vital points and maximum gains while assisting law firms or corporates in managing their contracts. These help in putting your law firm or company to be at the top of the competition in your industry. Therefore, TLB’s contract management team work on the various stages of a contract and finds out the most important aspects of it to give you an edge in multiple areas.
Insight : Phases of the Contract Management Process
TLB’s contract management team leverages from their vast experience of drafting hundreds of contracts encapsulating the vital phases involved in a contract management process. Careful due-diligence during these stages helps their clients to achieve maximum efficiency. In fact, it has been noticed that many companies are left behind because they do not know how to efficiently manage their contracts. Therefore, it is essential to understand and carefully manage each of these phases to strengthen and increase the value of your agreement portfolio.
Phase 1 – Due Diligence Stage
The first crucial phase in a contract management is knowing the different parties to the contract and their relationships. This understanding helps in handling the negotiation of a contract better. Once you establish the relationship, you can then decide on how to create the terms of a contract. Also, this understanding helps you in knowing the potential risks of having a contractual relationship with the party or parties. Therefore, a thorough due diligence is the first step that would benefit you in developing the winning strategy in a contract. While negotiating with the other party, it will also pose a sense of fulfilment that small details were not overlooked and the scope of the other party to devise any strategy that would put them in the stronger position in the contract reduces drastically. The complexities of the terms reduce as the negotiation becomes straightforward and uncomplicated.
Phase 1 – TLB Value Add
TLB’s team while assisting at this stage make sure that a thorough due diligence is done for the parties before entering the negotiation stage. The team can perform their tasks on software tools or even vet the available relevant documents including doing a web-based analysis. As a first step, the team evaluates the terms, risks and benefits of the contractual agreements. Then they investigate the pricing part to ensure maximum profits. Any level of complexity is not a problem for TLB’s team because the team has real time experience of managing contracts for Indian, US and European law firms and corporates.
Phase 2 – Drafting Stage
While drafting a contract, it becomes extremely relevant to know the purpose and the type of the contract. Once this part is clear, creating a contract that is most suitable to your requirements ensures the structure of your contracts look exactly what they were meant to look like. At this stage, one needs to dig deeper into each question before finalising the draft. Once each side has their final proposal in hand, these needs to be re-evaluated and then the most advantageous ones are chosen to go into the contracts. Here it is also important to know the useful as well as the non-effective approaches to augment the future strategies. Giving and knowing accurate information should be the target regardless of the time frame of the contract to make you less prone to any future disasters or economic uncertainties. Compliance management improves the efficiency of the contracts therefore, businesses should be as transparent as possible while supplying the requisite information.
Phase 2 – TLB Value Add
TLB’s robust Contract Management Team have specialised skills in drafting lease agreements, partnership agreements, employer-employee agreements, and have expertise in managing contracts in various Contract Management Tools. The team can even assist with complex contracts that are related to the finance industry, cross border agreements and mergers and acquisitions deals too. The pre-existing checklists available with the team helps in moving forward in this step quickly.
Phase 3 – Execution Stage
In the final stage, the contracts are signed, and a legal relationship is established making each party bound by the terms and conditions established in the contract. Many companies do not have the bandwidth post this stage to manage the contracts. However, post signing a contract it becomes even important to monitor the contracts be it manually or in the software. The fact that a contract management tool is automated doesn’t mean it will do all the tasks to ensure you are not at risk.
Phase 3 – TLB Value Add
Aside from the regular tracking, TLB’s team keeps a track of the changes in the laws to ensure that necessary amendments are done in the contracts. While most contract management tools these days are user friendly, one still needs to keep a track of the important timelines, the deadlines, the specific performances in the contracts and the financials. The most vital is the data security for which you need a team with strong values to operate these.