A GC’s Guide to Contract Execution, Storage, and Renewal
As General Counsel, you have dozens of things on your plate every day. Whether you’re fielding legal inquiries, negotiating contracts, advising company leadership on strategic business matters, or monitoring compliance with industry regulations, it’s likely that your schedule is filled with tasks crucial to the company’s legal health.
Given your busy calendar, it may be difficult to keep tabs on your company’s contracts, particularly since large organizations manage an average of 350 contracts a week, according to the professional services company EY. Not properly managing your contracts, however, can come with serious legal and financial risks.
The risks of not properly managing your contracts include:
Failing to notice if a contract has auto-renewed, which can cost the company money.
Being in breach of contract without realizing it, which can damage a company’s reputation and lead to lawsuits.
Being unable to locate a contract quickly, which can impact the company’s ability to make informed business decisions.
Losing a deal due to slow contract execution.
Overall, inadequate contact management costs organizations 9% of their bottom line, according to World Commerce and Contracting. And disorganized contracts can be a time drain, as well. A typical in-house attorney already spends 25% to 40% of their time on things that don’t need to be performed by a lawyer — you don’t need to waste additional time searching for a misplaced contract.
In this white paper - A General Counsel’s Guide to Contract Execution, Storage, and Renewal - we examine the many legal and financial risks associated with poor contract management, and discuss simple, effective strategies for managing your contracts better. These strategies will ensure that your contracts are always readily available, and that you don’t make costly — and avoidable — contract management mistakes. By identifying and addressing your contract issues now, you’ll be able to ensure they don’t become bigger headaches down the road.
Here’s a preview of what’s covered in this guide:
What Does Poor Contract Management Look Like?
Storing contracts in scattered locations
Retaining multiple versions of contracts
Not having a standard protocol for naming contracts
Only using paper contracts
Having an inefficient contract execution process
“Without clarity, you don’t know what’s been agreed to or why it was agreed to. If it all blows up two years later, Legal has to try and unpick it all. Better systems and information might prevent some of that.” - Faye Moran, former Head of Legal Operations (interim) at Booking.com
What Happens When Your Contract Management Process Falls Short?
Missing crucial milestones
Losing contracts - regulatory and deal trouble
Regulatory non-compliant contracts
Breaching a contract
Frustration with the legal department
Not paying attention to contract expiration dates can impact a company’s bottom line, as failing to renew a contract can result in lost business. What’s more, if a company doesn’t realize that a contract has expired and continues to produce goods according to the agreement, it could find itself with a costly surplus on its hands.
Strategies for Better Contract Management
Centralize your contracts
Set milestone reminders
Digitize paper contracts
Keep up-to-date templates
Control who can access contracts
Track contracts during the signing process
Summarize your contract achievements
Perhaps one of the most simple but effective things you can do to improve your contract management is to centralize your contracts in a single, secure online location. This will help you avoid having to search for misplaced contracts and will protect your contracts from being hacked.