To be effective in any role, you need a wide range of interpersonal and technical skills, supported by a broad base of relevant subject matter knowledge and certain innate personal characteristics.
Whether you're new to Contract Lifecycle Management (CLM) or an experienced hand, here you'll find helpful information to break the industry down. We also have a number of resources specifically for Contract Managers.
Contract Manager Job Description
Contract Managers are responsible for various stages of a contract’s lifecycle. They will be involved in its creation and amendment, overseeing its execution, managing its operation and any eventual termination or renewal. The overarching goal for a Contract Manager is to ensure the business gains the best possible outcomes from each contract within the portfolio.
Responsibilities can also include:
- Being a single point of contact for the contract and building strong relationships with third parties
- Monitoring the contract’s performance to ensure that all KPIs are met
- Centralising all contract-related communication and documentation
- Managing renewals and close-outs
- Communicating contract-related information to all stakeholders
- Resolving issues of poor performance
- Identifying potential risks and contributing to mitigation plans
To fulfil this role Contract Managers need a particular set of characteristics, allowing them to collaborate effectively at all levels throughout the business as well as externally.
Below, we take a look at what those characteristics are.
Contract Manager Expectations
To be effective in Contract Lifecycle Management (CLM) specifically, the Contract Manager must be able to work:
- For, with or through various groups of internal and external people
- In accordance with internal policies and practices and external laws and regulations
- Across many different products, services and possibly languages
- Using contracts containing both standardised and unique elements and risks.
Like most occupations, there is no 'right' set of personal characteristics required for undertaking CLM. That said, there are certain attributes likely to make you more effective in the role.
However, the nature of the role is not so specialist that key attributes can’t be developed and improved over time.
Formal education and training can provide a foundational level of skills and knowledge, with expertise increasing as a result of on-the-job exposure and mentoring.
Key Personal Characteristics for Effective Contract Management
Strong attention to detail
Often listed as a key skill in many different roles, but never more important than in contract management.
For example, significant problems can arise from simple things like:
- The punctuation in a sentence, the addition or omission of a word, or the capitalisation or not of a particular word
- The total for a set of numbers is incorrect
- The length of time between two dates is wrong
- Two contract clauses contradict each other, or reference is made to a non-existent clause
- A contract doesn't cover a certain situation when a supplier agreed that it would
As the old saying goes, the devil is in the detail, so the effective Contract Manager's ability to spot such errors, omissions, inconsistencies, ambiguous language and undefined terms is crucial.
Closely aligned with strong attention to detail, being thorough helps to ensure that nothing slips through the cracks and that all applicable avenues have been explored and points of view considered.
A superficial or cursory review has its place, but the payback from being thorough is well worth the effort for the effective Contracts Manager.
Both the supplier and internal stakeholders in a contract will have things to say about its content and operation.
The effective Contracts Manager's ability to listen closely to what is said and not said, and respond to people in a way which shows they've been heard is important.
Considering the wide range of people who can be involved in CLM activities, this attribute is a key element in establishing smooth and inclusive working relationships.
Closely aligned with being a good listener, a collaborative mindset indicates a willingness to help and engage with the many people involved in any particular contract – especially if they are in different geographical locations.
The effective Contract Manager has to rely on stakeholder staff to provide feedback on supplier performance and background for contract amendments among other things, so a good supportive relationship with these people, and the supplier's staff, is essential.
The workload can be considerable depending on the number of existing contracts to be managed, and the usually random arrival rate of new contracts.
Getting overwhelmed by the sheer volume of work is debilitating and stressful. An ability to organise the known workload and allow for the unknown is crucial for remaining productive.
The ability to deal with rapid and possibly unplanned change, large and small, good and bad, is paramount.
Change is simply a fact of life requiring a positive mindset plus an ability to discard what has been done, regardless of the effort involved, and quickly change direction.
It also provides opportunities for creativity, for doing things differently and possibly more effectively.
If it can go wrong, it will. When it does, it will be at the worst possible time.
These and other variations of Murphy's Law have been proven time and again.
Proactive problem-solving tries to anticipate issues and institute preventative measures, even in unexpected circumstances. Reactive problem-solving deals with unanticipated issues, instituting remedial and preventative measures.
Aligned with the effective Contract Manager's adaptability and supported by critical thinking and creativity, a problem-solving mindset is necessary for dealing effectively with the unexpected, often with incomplete knowledge.
For quite a while now, the push has been on across the board to do more with the same or less.
People who are naturally inclined to just get on with the job, are organised and adaptable, and are well-placed to deliver against the more stringent targets.
For the effective Contract Manager, being internally motivated and comfortable with autonomy is vital.
Critical Knowledge for Effective Contract Management
Contract lifecycle management
The activities commonly performed in CLM are outlined in Gatekeeper's Complete Guide to Contract Lifecycle Management.
Additional activities may be needed to manage contracts:
- From certain suppliers,
- For certain types of goods and services,
- Containing certain obligations,
- Susceptible to certain risks,
- Operating in certain countries or legal jurisdictions, or
- Exceeding certain spend limits or timeframes
The effective Contract Manager needs an excellent general understanding of CLM, its stages and common activities, and must be able to figure out the individual steps required in each case. They should also have up-to-date awareness of specialist solutions that could streamline their efforts.
The Organisation’s Business
In order to maximise alignment between organisational goals and the contracting strategies used, the effective Contracts Manager needs a solid understanding of:
- The organisation and its major business operations, key market areas and the current business environment,
- Strategic suppliers and customers, and
- Where applicable, the most critical contracts.
They should also understand the operations and business drivers of the organisation's Procurement teams to determine the optimum way CLM services should be delivered to support these functions.
The organisation's policies and practices
Every organisation needs to have a set of policies and practices that specify how its staff should behave in prescribed situations, such as a code of conduct, drugs and alcohol use, ethical behaviour, confidentiality etc.
Apart from such general matters, the effective Contracts Manager needs strong familiarity with any specific policies and practices such as:
- The general procurement policy
- Contract governance and contract management
- Decision rights concerning CLM activities and changes to preferred contract terms
- Delegations of authority for approval and signing of contracts and amendments.
The regulatory environment
More and more laws, rules and strictures govern the way business gets conducted. This is enough of a challenge in an organisation's domestic environment, but it gets more complex when the organisation has operations and dealings in other countries.
A good Contract Manager needs to obtain a thorough understanding of the key regulatory topics applicable to their organisation under the governing law agreed to in each contract, such as data protection, import /export restrictions, anti-bribery, taxation etc.
The fundamentals can be obtained from the Legal team or other Contract Managers, and specific guidance should be requested from appropriate specialists as necessary.
Contract types and terminology
While there is almost no limit to what a contract can cover, other than it should not be illegal, contracts are usually about:
- Buying or selling,
- Loaning or borrowing,
- Leasing or renting,
- Granting or denying,
- Partnering or proxying,
- Doing, or not doing, something.
Most contracts will contain some common standardised terminology.
Over time it will pay to become familiar with the kinds of terminology and clauses you encounter consistently. This will reduce the time to review and help to quickly identify areas that might need revision or legal input.
As we’ve mentioned before, studies have shown that, on average, 50% of negotiated savings fail to materialise over the life of a contract.
This is primarily because of insufficient oversight and monitoring.
Determination of how well a contract delivers the expected outcomes is based on the measurement of performance over several key areas:
- The supplier's service delivery performance can be measured against agreed Key Performance Indicators, Service Level Agreements, benchmarking and user satisfaction surveys.
- Each party's compliance with contractual obligations can be regularly checked
- Achievement of desired contract outcomes can be measured by calculating value for money and the level of benefits realisation.
- The effectiveness of the CLM processes can be assessed by measuring and comparing process times, levels of issues and contract disputes and user satisfaction levels.
The effective Contract Manager needs a detailed understanding of the methods available for measuring performance and, more simply, to be comfortable with numbers.
Nine Key Functional Skills For Effective Contract Managers
So now that we know the key characteristics of a Contract Manager, lets look at the functional skills they need for success.
1. Effective communication
Getting the desired message across to an audience has been a problem for humanity since the dawn of time. The consequences of ineffective grunting and gesturing back then could range from harmless to catastrophic.
Despite the inherent intelligence of our species and our development of complex language, the consequences have barely changed.
The ability to prepare and deliver clear, concise and coherent verbal and written communications to organisational stakeholders, senior management, suppliers and others is probably the most important skill the effective Contract Manager needs.
For many, this skill does not come naturally and can become a barrier to career progression.
However, this can be readily addressed since there has likely been more material produced and training given about communication than any other subject in modern times. Here’s a quick list of recommended books on the subject.
2. Fluency in legalese
The language of contracts, known as legalese, is based on common words from the local spoken language but is often expressed in a manner that the layman can find difficult to understand.
The occasional Latin phrase may be used as a shorthand to express certain legal terms or principles in countries with a history of Roman law.
Legalese is typically written by lawyers for lawyers, following precedents established by judicial review over hundreds of years.
The ability to read, understand, translate and occasionally write legalese is another vital skill you’ll need to succeed.
A course in contract law may be useful but takes some commitment. Guidance from an experienced Contracts Manager or lawyer, combined with constant exposure to contracts is the more common way to achieve the fluency required.
3. Stakeholder engagement
The Contract Manager will often have to work with, influence and rely on many people from many different business functions.
Stakeholder engagement is the practice of:
- Identifying all the key individuals likely to be needed for a particular contract,
- Explaining the rationale for and scope of their involvement,
- Dealing with resistance to involvement or intentions,
- Planning and agreeing why, when and for how long they and/or their delegates may be needed,
- Describing the established processes that need to be followed, and
- Providing regular feedback about progress and notifications about approaching commitments.
The ability to improve communication between parties with different agendas, establish common goals, reach a consensus about what needs to be done and why, foster a sense of team membership and inclusivity, and reduce wasted time will also help Contract Managers in their role.
4. Project management
Initiating, negotiating, implementing, managing and renewing or terminating contracts are activities that need to be planned and overseen to obtain the desired outcomes.
Project management is the highly evolved discipline used to achieve these outcomes and it is equally as applicable for CLM as for an IT or engineering project.
A typical Contract Manager's workload needs to be managed in a disciplined and organised way to be effective.
Daily life is filled with informal negotiations about who's going to do what, why and when. The parties to these negotiations can include family, friends, work colleagues, team members, complete strangers and so on.
Each side typically establishes its position on a matter and sets limits on how far from that position it is prepared to move, either in advance or on the fly.
Formal contract negotiations follow the same principles but differ in terms of scope, scale, complexity, flexibility, tactics, risk and reward.
The ability to understand the other side's point of view, recognise and counter the tactics being used, establish concessionary limits not to be exceeded and determine the implications of an opposing position is a key skill the effective Contract Manager needs.
Constant involvement in contract negotiations and mentoring by an experienced person is a practical way to develop expertise.
6. Relationship management
Things usually get done better when people are able to work together.
The care and effort put into establishing relationships between people lead to trust, which can:
- Create strong alliances and respect for others,
- Increase motivation and confidence,
- Minimise friction and uncertainty, and
- Speed up problem-solving and decision-making.
The ability to understand people's motivations and agendas, manage and meet their expectations, instil a sense of unity and common purpose, and deliver on promises made are the areas to focus on.
7. Risk management
Risk is everywhere. There is potential for contract-related risk at every CLM stage, ranging from poor internal practices to the effects of a geopolitical disturbance on the other side of the world.
As a Contract Manager, you’ll need the ability to:
- Identify and estimate the likelihood and impact of contract-related risk
- Establish mitigation methods aligned with the organisation's general approach to risk
- Track the ongoing relevance and effectiveness of those mitigations
- Use a contract management solution to automate risk mitigation
Close study of how the organisation approaches risk in terms of policies and practices, and any guidelines prepared by Legal / Internal Audit / Governance, Risk and Compliance teams is essential. Mentoring by experienced Contract Managers is also extremely helpful.
8. Contract summarisation
Sometimes known as “Gisting”, the process of summarising contracts is one you should aim to be adept at.
For most people, contracts are so unintelligible they may as well be written in Latin.
Because there can be many stakeholders for a particular contract, the Contract Manager or the lawyers can be repeatedly asked for an interpretation of one clause or another, which will often lead to further questions.
Even though this work is important, it wastes the time of those doing the interpretation and those waiting for it. The simple solution is to prepare a plain language summary of the contract's key features following execution, sufficient to satisfy most requests from stakeholders.
This approach sees the larger interpretation effort performed only once, provides stakeholders with a workable measure of contract knowledge, and saves everybody's time.
Here, it’s important to develop the ability to locate the features of a contract that are important to stakeholders, translate them from legalese to plain language, and produce an easy-to-read summary of those features in a standardised format.
This can also be achieved with contract management software that uses OpenAI to deliver short and easy-to-understand contract summaries. Reading contract documents and understanding the legal terminology becomes far easier.
9. Contract development
Most suppliers and a growing number of their customers have prepared contracts covering their respective provision or acquisition of goods and/or services, containing their preferred terms and conditions.
There are times however when a bespoke contract needs to be developed, say due to the specificity of an organisation's requirements.
An example might be the outsourcing of certain aspects of the IT function. A candidate supplier's standard outsourcing contract or a legal firm's equivalent boilerplate contract may be useful as a starting point.
The ability to derive contract terms needed to cover a common situation with unique elements, requirements, risks, performance or compliance requirements is a very useful skill for a Contracts Manager to have.
Close liaison with internal or external lawyers about clauses necessary to support specific requirements and their precise preferred wording is a simple way of gaining contract development skills.
What to do in your first 30 days as a Contract Manager
If you're looking to apply for a Contract Manager role, or you've just started in a new position, we have some advice on what you should prioritise in the first 30 days.
If you need any more assistance within your role, you can access our free contract management templates and resources here.