Managing Legal Contracts in the Modern Enterprise

Legal Contract Management
Last updated: 02 Aug, 2023By

Today, there is a rising need for corporations to implement rigorous legal contract management doctrines, especially contracts with third parties, to make sure that legal and regulatory requirements are carried out efficiently within the scope and constraints of the agreement.

The ‘sign and forget’ attitude that is growing in today’s firms is causing corruption and severely affecting the bottom line of many corporations.

Businesses must store and preserve signed paper copies of contracts that detail clauses, commitments, and obligations. The management of a contract needs to happen over its complete life cycle, which is creating, negotiating, storing, scheduling contractual events, enforcing and terminating or renewing the contract.

Until now the process has been physical and painstaking, with large margins for error. Due to this companies have begun using software solutions which have enabled them to handle data and resource planning systems. Software solutions also help to convert ‘rudimentary’ contracts into foundations for revenue and at the same time reduce corporate risks and costs.

Coordinating Contracts within the Enterprise

Communication is essential for companies with multiple subunits in different locations to negotiate contracts efficiently.

Lack of communication between sub-units of the same company collaborating with another company can lead to incorrect decision-making due to lack of information sharing. The incorrect decisions will then have dire consequences for each of the corporations directly or indirectly.

Dolphin Software states that individualist relations of sales and supplies lead to increased risks and costs. Also, an informational vacuum in state and federal agencies is unforgivable.

Milestone and other Metric Monitoring

Trust between two companies is the best way to ensure positive outcomes. Renewals can happen if a contract is terminated or if partners need to manage their service to existing customers.

According to Garner Group, amazingly, 60% of supplier contracts are renewed automatically because buyers don’t give notice of termination.

Corporate Compliance and Governance

Managing contracts till the end of their term is good business ethics and legally necessary for all enterprises. To reveal accurate information to stakeholders, the Chief Finance Officer must be well-informed about the enterprise’s contracts.

Also, state and federal regulations entail public companies to provide information regarding processes and mechanisms that manage the information.

Sponsoring Contract Management

Executives and directors need to sponsor the application process for important aspects of corporate management, such as strategy, regulatory and legal compliance, and bottom line foundations.

Traditional methods are no longer enough to deal with the process of a corporation. Contracts must be monitored closely using software systems that can integrate information from CRM, ERP legacy systems, and financial systems.

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