“It’s important to know that contract management covers the entire contract life cycle from start to finish,” she told Lawyers Weekly.

“It’s not just about managing the paperwork itself.”

As such, she explained, robust contract management could boost performance, while poor management could expose organisations to risks and operational inefficiencies.

“It could help empower legal teams to navigate complex tasks with ease. At the same time, it allows legal teams to best support their internal clients,” Tsipidis said.

Legal teams could reap commercial benefits for their organisation, she continued, such as transparency in budget and spending, visibility of suppliers, and fewer workflow duplications.

“It doesn’t make sense if teams are conducting similar workflows but sending it to different suppliers if you’ve already got an existing relationship with someone,” Tsipidis pointed out.

At the summit, she and a panel of speakers will offer tips on how to navigate complex contracts with confidence and detect and address fairness in contracts.

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What good contract management looks like

Implementing an internal system and a process to interact with key stakeholders could help legal teams master contract management, according to Tsipidis.

She suggested that they determine the key stakeholders who are involved in the entire contract life cycle.

Other than the business owners or C-suite and board members who own the relationship, legal teams must identify relevant representatives across different teams (for example, in the finance or procurement departments).

“Get them all together, and make sure there’s a clear system in place that details how approvals could be obtained,” Tsipidis said.

“Find out if you need to get a pre-approval on things before you begin the conversation. Ask if they have a budget and scope in mind. Make sure you know all of that before commencing the work.”

Tsipidis recommended that contract ownership should sit with everyone involved in the matter rather than only the legal department.

“Everyone needs to understand what the risks are. It’s not just something for legal to sign off,” she said.

“We can give advice on it, but I think it’s important that the commercial partners understand what the risks are, and they own those risks as well.”

The next step is to establish clear goals and objectives, outline the scope of the project, and determine whether the legal department could leverage it in the future or only use it for the project at hand.

In-house counsel must clearly explain everything in the contract (including obligations, risks, and opportunities) and collaborate with stakeholders to ensure the draft reflects what is occurring in practice, Tsipidis advised.

“It’s important to identify all of this from the start, and then work through the risks and contingencies,” she said.

“Then, you can help the owners understand the commercial and legal implications, as well as the processes and systems required to manage any issues that arise.”

What to do when all is done and dusted

Once a deal is settled, legal teams must create summaries that are readily accessible to relevant parties in the business so that they can refer to it at any time for clarifications rather than asking the lawyers.

“This helps with transferability of knowledge, too, especially if key personnel leave the business or go on leave. It helps pass on that knowledge from the person who initially dealt with the matter to those who replace them,” Tsipidis said.

Creating a repository system that houses the contract and summaries would help for accountability, she added, along with documentation that highlights the key risks taken in the deal.

“This is so that if someone asks down the track why you signed off on a risk or who made a decision in relation to a deal and why, anyone in the company can access the summary and answer those questions,” she said.

Keep it simple

Managing contracts can be complex, but Tsipidis urged in-house counsel to simplify the process and increase accessibility for everyone.

She concluded: “Whether it’s introducing new policies and processes, drafting contracts, or negotiating clauses, keep it simple. Overcomplicating things will just lead to confusion.”

To hear more from Calli Tsipidis about how in-house counsel can help their business master contract management by embedding a robust process, come along to the Corporate Counsel Summit 2024.

It will be held on Thursday, 2 May, at The Star, Sydney.

Click here to book tickets and don’t miss out!

For more information, including speakers and agenda, click here.