6 Best Practices for Managing Contracts When You’re Working Remote
By David Parks
We’ve been fielding a lot of questions from prospects on how they can more effectively manage their contracts when all employees are working from home. This blog looks at 6 best practices for managing contracts you can implement to make it easy and effective when your team is working remotely. We also wrote an article on the challenges and considerations with contract management when working remotely that you can read here.
The good news is that regardless of how you are managing contracts today, you can implement these best practices for managing contracts. While we strongly advocate the use of contract management software, we understand that you may not be able to adopt it right now given other business priorities and resource requirements. If that is the case for your organization, please know that these best practices will still be helpful, relevant, and applicable to anyone using traditional and manual approaches to contract management.
Best Practice #1: Centralize Storage of All Contracts in a Single & Cloud-Based Repository
If you haven’t already, now is the time to consolidate all your contracts from different hard drives and folders into a single place where the team can access them remotely. Put out a request to the relevant people in your company to start gathering all your company’s legal agreements. Centralizing your agreements is one of if not THE most important best practices for managing contracts.
Contract management software is the ideal type of contract repository because it’s dynamic, secure, and searchable. However, if you don’t currently have a system then online shared folder solutions can be a viable alternative for the short-term.
If you are using shared folders, make sure to secure access to the repository and that everything is password protected. It’s also important to outline the structure of how you will organize the contracts and documents before you upload them. For example, folders can be structured by vendor, contract type, customer, date, or some other datapoint.
Tip: You’ll also want to take into consideration and make sure you capture supporting documents like COIs, SOWs, etc. Again, if you do decide to leverage contract management software then you don’t have to worry about those organizational hierarchies. The system lets you view, sort, and filter the contract information however you want such as by role, contract type, organization, contact, document, etc.
Best Practice #2: Implement Electronic Signatures
Now more than ever, you need to move away from paper-based contracting and wet signatures for both buy-side and sell-side agreements. Sure, people can email, print, sign, scan, and email agreements back and forth but it’s unsecure and a lot of work.
We strongly recommend the use of electronic signatures as one of the most important best practices for managing contracts when working remotely. They have been legally-binding since the ESIGN Act of 2000 and are fast, highly secure, and very user and mobile friendly. You can sign from virtually anywhere on any device.
Tip: There are several good e-signature solutions on the market that are reliable and easy to use. In fact, we’ve integrated the market leaders such as e-signature provider Sertifi directly into our contract management software so that you can execute agreements without ever leaving the system.
Best Practices #3: Establish a Baseline of All Contracts in Your Process
When you reach out to the broader team about centralizing your executed agreements, you’ll also want to find out about all contracts still moving through the process in addition to those coming up for renewal or termination.
To do this, you need to start tracking the stage and status of your outstanding contracts. Who is working on what, what are the roadblocks, what step are they in the process, and other important items about your agreements. All too often the stage and status of contracts is only captured in someone’s head.
Tip: Systems such as Contract Logix automatically track the progress of contracts in your process. If you don’t currently have a system, you can use Excel or Google Sheets to get that information captured & organized quickly.
Best Practice #4: Create a Cross-Functional, Virtual Contract Team
Since you can’t meet face-to-face or have impromptu hallway or office conversations, you can organize a virtual team that includes a representative from each department involved in the contracting process. The frequency for how often and when this teams meets will all depend on your specific business requirements.
Tip: The roster should involve someone from any department that touches a contract. For most organizations, this includes in-house legal, procurement, finance, IT, sales, and potentially marketing and human resources. By getting this group together on a recurring basis, you can keep your processes on track. It will also make sure people are on the same page and communicating any progress or other challenges back to their teams and leaders.
Best Practice #5: Clearly Outline Workflows for Contract Types and Your Business Process
In remote work environments, it is especially important to identify everyone’s role in the contract lifecycle process. By understanding and documenting roles and responsibilities, you will keep contracts flowing through the process and ensure compliance with your business rules.
Start building the most important and frequently used contract workflows first such as Contract Request, Contract Review, Contract Approval, and Contract Execution. Keep in mind that these workflows may and often should vary by contract type. For example, NDAs likely use different review workflows than MSAs. You should also take into consideration workflow variations for certain items like contract value where you may want a different level of approval involved.
Tip: Contract management software lets you build and automate visual workflows. As an alternative, you can use applications such as PowerPoint, Visio, or Keynote to outline all the steps your process.
Best Practice #6: Create Standardized Forms for Contract Requests and Submissions
Maintaining accuracy and efficiency of contract requests and submissions is important. It’s also harder to ensure when contracts are being initiated remotely. You can’t just walk down the hall and ask someone a question about a piece of missing information. Sure email, phone, text, and instant messaging will work but they can be error-prone and take time.
The key is to create standard contract request forms that colleagues need to complete in order to request a new contract or submit one on third-party paper. These forms should include required fields that users must complete for the request to be processed such as organization name, dates, contacts, values, and other important terms and information. This eliminates back and forth over email or other forms of communication.
Tip: You can create the forms in your contract management software where the data is automatically captured and routed via workflows. It makes it very easy to convert this data to actual contracts. Another option is to build them using Microsoft, Google, or other common business applications.
There are a number of business challenges associated with everyone working from home or in remote environments. The good news is that contract management doesn’t have to be one of them. Implement these six best practices for managing contracts and you will be on your way to success regardless of where you’re working.
Want to learn more? Schedule a call to discuss your needs.