Many departments within a company can benefit from contract management software, but corporate legal is a natural.
Every company needs a corporate counsel to vet contracts at some point. All too often, however, during a contracts lifecycle, key information about a contract tends to get dispersed – and lost to legal’s view.
For instance, what if a client’s contract calls for X number of products to be delivered within a certain time period. However, during the agreed upon period, your company cannot take delivery of that contracted number of products due to warehouse problems. So, numbers are altered and an agreement reached. But this “agreement” happened between a product administrator, warehouse, and the contracted vendor, leaving legal out of the loop. At the end of the contract period, the billing department may be looking for a “make good” and ask the legal department to write a letter regarding a possible breach of contract.
This can be a touchy situation, leading to confusion and maybe even a bruised business relationship – maybe even lost business with a key partner.
With a centralized repository of contract records, information on deliverables, met obligations and key deadlines can be entered in notes or linked to relevant documents or document excerpts. Consider the time and trouble that saves when internal departments ask for legal to either weigh in or take action on a contract. Without all that information in one accessible place, tracking down something as simple as a mid-contract amendment can be tiresome and labor-intensive.
With a single contract database corporate counsel departments can ensure:
- a holistic view and approach to managing a corporation’s legal obligations through the contract lifecycle
- consistency of contract execution
- reduction of duplicated services and efforts
- limited errors and unapproved changes to contracts
Mitigating organizational risk and maintaining compliance with federal, state and local law can also be more effectively managed with contract management software. Read some of our previous posts on how proper contract administration and use of document retention policies can reduce the business risk of your organization while helping you meet the demands of laws such as the Sarbanes-Oxley Act of 2002.
Reputable legal associations suggest contract management software as a reliable resource for in-house legal departments as well. Check out what the American Bar Association (ABA) and Association of Corporate Counsel (ACC) say about contract management software.