Considering that modern enterprises handle between 20,000 to 40,000 active contracts at any given time, it is easy to see how incredibly important skilled contract managers are to the survival of businesses across the world.
Top-performing contract managers are able to achieve success by possessing a mix of technical and non-technical skills, encompassing legal, finance, tech, and risk management skills, among others.
In this guide, we'll explore 10 of the most important contract management skills you must master to join the league of top performers.
The Role of Contract Managers
A contract manager plays a mission-critical role in the survival of their organization by ensuring that business transactions are run within the confines of established policies while maintaining profitability.
To this effect, a contract manager must have a deep understanding of their organization's business infrastructure, offering legal assistance to various departments and merging their expertise with the company's business objectives.
Your role as a contract manager is fairly broad, cutting across departments and hierarchies. However, there are specific duties that are more common today:
- Oversee the initiation, negotiation, and execution of contracts
- Monitor compliance
- Keep financial and reputational risks minimal
- Develop good relationships with strategic partners, suppliers, and other relevant third parties
- Resolve any issues that arise between internal teams and business partners during the contract lifecycle
- Maintain a secure and readily accessible repository of all contracts—past and present
Technical contract management skills
These refer to role-specific contract management skills that every contract manager must master to perform their duties optimally. These include deep and practical knowledge of legal, financial, and business strategies needed to make contracts safe and profitable for their organizations.
1. Legal expertise
Whether you’re considering a career in contract management or transitioning into in-house legal from a commercial law background, you need an in-depth, practical, and demonstrable knowledge of the laws that impact your organization as well as best practices for keeping your company safe.
This encompasses knowledge of industry-specific contract laws, including policies around buy-side and sell-side contracts, lending and borrowing, leases and rental agreements, or partnership contracts.
You'll also need to have a solid grasp of contract risk management—how to identify potential legal pitfalls and strategies for keeping them minimal.
2. Digital technology
The contract management industry has experienced heavy digitization in the last decade, with new software products hitting the scene every now and then.
Automation has been at the forefront of contract management technology, helping businesses close contracts more expeditiously. Top-performing contract managers are well-versed in contract management tools and how to use them to manage an ever-growing volume of contracts.
Some of the things you can do with contract management tools include templatizing high-volume contracts, automating workflows, tracking execution, a centralized repository, and more.
Also read: The Basics of Contract Management Software
3. Data analysis
Expert contract managers can easily spot a wealth of information in a pile of contract data. This is a crucial contract management skill, as you will be required to demonstrate how your operations have contributed to the organization's overarching objectives.
By mastering data analysis, contract managers are able to get specific insight into contract processes like average TAT for approvals, duration of negotiations, most profitable contracts, and more.
This enables them to identify bottlenecks, optimize processes, close more deals, and ultimately generate more revenue for the organization.
Also read: How to Uncover Insights with Contract Analytics Software.
4. Business and finance acumen
“Law firm business models are typically reliant on their employees’ billable hours but the work of an in-house team hinges on business requirements and how effectively their legal advice can be practically implemented or applied.”
~ Harry Borovick, Senior Legal Counsel, LiveRamp
SpotDraft Counsel Corner: Starting Right, as an In-house Professional
A contract manager is essentially a business expert because contracts are core to business. By having business skills, you're able to dive into your organization's existing business infrastructure and strategies, spot opportunities for maximizing ROI, and detect potential risks proactively.
You're also well-versed in finances and how your organization handles commercial transactions. You also need to master how to communicate the value of contract management in terms of ROI—how your operations have helped the business grow its finances and how to achieve even more.
Non-technical contract management skills
Non-technical skills comprise attitudinal and interpersonal attributes. They’re more generalized but are still crucial in helping you deliver your duties effectively.
1. Negotiation Skills
The best contract managers are skilled in the acts of persuasion and negotiation. They know how to ask the right questions and influence specific actions during contract negotiation.
After the internal contract initiation and approval phases, a company typically presents its offer to the other party for negotiation. This can take anything from a couple of hours to days and even weeks.
To close more deals as a contract manager, you need to master how to communicate offers, requirements, and other vital elements of a contract in a way that's easily digestible for the other party. Successful contract managers also know how to leverage technology to streamline and expedite negotiation processes.
To get more efficient and cut down negotiation durations, you can create standardized contracts, including fallback positions for commonly negotiated clauses.
Also read: Choosing the Right Contract Negotiation Software
2. Conflict resolution
Contracts come with inherent risks of misunderstanding and conflicts. When these occur, how do you de-escalate the situation and ensure both parties are happy?
This is an incredibly valuable skill that successful contract managers have. Sometimes, the conflict can be internal. A great contract manager leverages their listening and problem-solving skills to dissect the situation, find solutions, and keep things under control.
3. People management
“Many great lawyers suck at managing people. It is just not the way their brains are wired. And when you put bad people managers in charge of people, it can be a disaster.”
~ Sterling Miller, CEO and GC at Hilgers Grabens PLLC
Ten Things: How to Manage People and Lawyers
People management is a very complex skill to master, as every individual is unique in strengths and weaknesses.
A good contract manager is skilled at delegating tasks to the right talents, resolving conflicts, motivating low performers, and communicating with stakeholders.
They're also skilled at managing business relationships, maintaining a careful balance between defending their company's interests and keeping their business partners satisfied.
4. Attention to detail
While technology has made it easier to spot errors and missing elements through redlining, a great contract manager understands that having great attention to detail is paramount to creating contracts that bring value.
Top contract managers are known to be thorough and always on the lookout for typos and hidden clauses, as missing these can pose enormous risks for the company.
You could also leverage contract lifecycle management software with the capabilities to help you redline and even ensure version control.
SpotDraft has integrated Microsoft Word as the primary contract editor on the platform. Learn more at SpotDraft.com/word.
5. Organizational skills
Contract managers typically handle high volumes of contracts, monitoring and tracking every phase. Staying organized in the middle of all this is mission-critical as you don’t want to get overwhelmed and burned out. This is a skill that top performers have mastered.
Again, SpotDraft has made it a lot easier to stay organized, whether you're managing 100 or 10,000 contracts at any given time. But technology is not meant to completely replace existing skills. It is only meant to make you more efficient.
Becoming the top 1%
The difference between average and top contract managers lies in the presence of a strong combination of technical and non-technical skills.
As you strive to rack up successes and join the league of the best contract managers, you ought to stay consistent with self-development and up-to-date with evolving technology trends and how they impact business in your industry.
Indeed, technology is a driving force in the modern business ecosystem, and successful contract managers have leveraged contract management systems like SpotDraft to stay efficient, scale contract volumes, and generate more revenue for their organizations.
Want to learn how SpotDraft can help make you a better contract manager? Request a demo.