March 27, 2021
March 2021- Pre-contracting tips for better contract management
Many of the tools that garner the attention for improving contract management address the later stages of the contract lifecycle or post-contract obligation and relationship management. These technologies are designed to assure an organization is getting the full benefits of what has been agreed on. But there are also tools and best practices that can be applied earlier in the process to set you up for success.
Pave the way for better contract management with these pre-contracting best practices:
- A simple, user-friendly request and intake process is the best place to start. An online tool or application available from any device should allow users to provide key information, upload relevant documents and hit submit. The request is routed to a triage team and a record is created.
- Confirm that a contract is needed, and if so, that you have the best starting template. Checking the database to see if an existing contract already covers the new transaction may save a lot of time. Rather than an entirely new agreement, perhaps what is needed is a new statement of work or a contract extension, both of which are easier than negotiating something new.
- Capture data at the start and throughout the contract life cycle. Your intake process should include capturing data from the outset, including the request date, counterparty entity, agreement type, requesting organization and other elements that will be used to measure your contracting efficiency.
- Establish a process to route each request to the right resource. Triage methods should include a review of relevant criteria such as deal complexity, urgency, geography, availability, risk and other factors. A prudent “smart” triage system will ensure that competing requests are prioritized to ensure alignment across the company, rather than the squeaky wheel getting attention. Also, recognize that the right resource to support a contract may not be a person; it could be an automation tool that creates an instant contract and sends it to the other side for signature or an AI tool that reviews third-party paper and provides an initial markup that aligns with your company’s policies and risk standards.
- Integrate new requests with your contract database to provide the assigned resource pertinent information. Your negotiation team will benefit if it has relevant information at its fingertips, including existing or similar contracts with the other party, including contract summaries, and risk assessments based on previously accepted provisions.
- Leverage AI tools but always quality check results. AI tools have come a long way, but they cannot replace legal personnel. Reviewing results not only ensures you catch any issues and provide a complete response to the other side, but also serves as a mechanism to better train the tool.
In addition to these best practices, engaging with a legal service provider may also lend support in building up a legal department’s pre-contract readiness. QuisLex helps clients with developing workflow processes, intake forms, triage and assignment criteria; assess the functionality of the tools currently in place; cleanse and update contracts repositories and templates; and much more.