A contract manager is responsible for the administration and management of contracts and for overseeing the process of consolidating, creating, and executing contracts.
What is a contract manager?
Contract managers are responsible for the administration and management of contracts and are at the forefront of the process by which contracts are consolidated and created. They also work with the rest of the organization to ensure that contracts move quickly and smoothly from creation to negotiation to execution.
A contract manager’s job is to ensure that contracts are processed expeditiously from creation to execution. He or she is also responsible for ensuring compliance, preventing loss of revenue due to disorganized contracts, and minimizing risk.
Once the contract is executed, the contract manager ensures that the contract is safely stored. He must also ensure that the contract is stored in a format that makes it easy for stakeholders to retrieve in the future.
Contract managers are also often responsible for the following:
- Creating and reviewing automated templates that will be used to create future contracts.
- Analyzing data about the contract process and determining which parts of the process might slow down the execution process.
- Manage relationships with suppliers and subcontractors.
- Support the legal team in contract negotiations
- Analyze new and old contracts with stakeholders, business partners, suppliers and customers to ensure content is legally sound and executable.
Contract Managers respond to offers, proposals, and contract negotiations. Create a bid for forwarding to the supplier. Analyze all requirements and provisions of contracts, including terms and conditions, to ensure compliance with all laws and regulations, as well as company policies and procedures. Research new contracts, review existing contracts, and monitor contract changes. They also train and supervise other contract professionals. They educate their subordinates on the implementation of contracts and maintain a data for the company’s contract management system. Contract managers, therefore, must have extensive skills and knowledge to successfully perform these duties.
The skills of a contract manager include:
- Effective communication, negotiation and interpersonal skills.
- Exceptional attention to detail and talent for accuracy and precision
- Deep understanding of contracts, contract management, contract language, and the contract life cycle
- Critical thinking and ability to research and understand legal and financial issues
- Excellent reading, writing and language skills
- Excellent understanding of the company or industry, its services, customers, and vendors
- Possess a high level of focus, creativity, leadership, and good problem solving skills.
- They must also have extensive knowledge of computers and software.
Contract managers are the backbone of any organization. Their role is one of the most important for all sizes of businesses. They help manage obligations effectively. Their daily work directly impacts the company’s financial performance, third party relationships, and reputation.
Do contract managers have to be lawyers?
No, they don’t have to be lawyers or have a law degree.
In many companies, especially sales-oriented companies, contract managers are basically in charge of sales. Their goal is to ensure that the sales team can create and execute contracts effectively and efficiently. This means they need to know key legal terms, but not case law or legal arguments.
However, some roles require a law degree. Some companies require a contract manager to work with attorneys and other legal staff on the legal side of contracts. The contracts manager may also act as a liaison between the legal department and the rest of the company. In this role, he or she is also responsible for interpreting legal clauses for non-legal team members who do not have sufficient legal knowledge.
The position of contract manager requires extensive education and training. A master’s degree in business administration is beneficial, but a bachelor’s degree in business administration is practically a necessity. Depending on the type of contracts the manager is dealing with, various certifications may also be required.
Most positions require several years of experience actively negotiating contracts, although experience in related positions may suffice. However, for entry-level positions, you can become a contract manager if you have general management or administrative experience and the requisite business education with a focus on contract management.
Why should you hire a contracts manager?
Contracts are sometimes simplistically viewed as a matter for the legal department. But in reality, in a typical company, employees from legal, finance, procurement, sales, and human resources all deal with contracts, often on a daily basis. Finance cannot properly forecast without sound contract management, and risk and compliance teams would struggle to assess enterprise risk without a well-organized and searchable contract archive. This often forces companies to hire a specialist, in addition to in-house counsel, to take responsibility for contracts before and especially after they are signed.
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