Contract management is the most vital part of YOUR job in any market, but in today's market, its importance has increased off the chart!

First, I am not talking about a software like Dotloop that manages YOUR paperwork. I am talking about YOU managing the process (the contract) and your client. Yes, managing your client is just as important if not more important in some transactions as managing the contract!

There are three stages of a contract: 1. Preparation (writing the contract), 2. perfection (working through the negotiation process for your client) and 3. consummation (when both parties have agreed to the terms and conditions of the contract).

The function of the contract is the legal recording of a transaction that provides a detailed road map of what the two parties have agreed to and their responsibilities. In our profession, it exists because two parties are each gaining a value and want to formalize the terms and conditions of their agreement.

While negotiating the contract is important, it is what comes next that is the most important for you and your client to have a successful closing.

Contract Management
Contract Management is the process of managing your contract (purchase agreement), expectations, responsibilities, deadlines, contract terms and conditions while ensuring customer / client satisfaction.

Contract Management is a very time-consuming element of our business, but it's also the most important, which is why we need to put the value and time into this process!

Here are some highly desired skills for contract management:

• Consistency (in every transaction with the process, forms etc.)
• Understanding the contract terms and conditions
• Negotiation plan (know your client's goal)
• Risk management (know the risks)
• Financial knowledge (know your client's financial obligation)
• Handling conflicts and finding resolutions
• Understanding your contract law limits
• Manage the relationships in the process

What YOUR contract management plan should include:

• Roles and responsibilities (for you and your client)
• Contact information for key responsibilities (for you and your client)
• How performance will be monitored with updates (for you and your client)
• Critical deliver dates and contingency time periods (for you and your client)
• Details that were agreed during the negotiation process (for you and your client)
• Identify the risks and possible issues that need to be managed (by you and your client)

Ways to improve your contract management skills:

• Review your current process and set some new goals!  Document what currently works for you and what is not working for you. This will identify what you need to work on to improve your management skills. Once you identify what you can improve on set some clear and measurable goals to improve.
• Use Company Addendums / Templates! Using a standard form with standardized language is an effective way to be consistent and minimizing risks while also saving time. Using a standardized form also increases the understanding of the task or obligation for you and your client.
• Automation is key! Keep an electronic file of any phrases, addendums, standardized forms that you have successfully used to help stay organized. A disorganized process can be frustrating and unsuccessful.
• Consistently review your contract management process! What might work for you today could be ineffective soon. Staying organized is a process that needs attention every day.

Contract Manager
Are you a good contract manager? 

A contract manager serves as the key point of contact between the parties (your client) of the contract while managing specific timelines and duties outlined in the terms and conditions of the contract.

You need to be knowledgeable about the details and benefits for your client as well as the potential disadvantages for your client.

How many of the qualities below do you have to make a good contract manager?

• You need to be organized. I suggest you have a template that you use to manage contingency timelines / deadlines.
• You need to communicate effectively for the negotiation process and giving your client contingency direction after you have an executed contract.
• You need to have attention to detail for accuracy.
• You need to have a clear understanding of the contract and contractual language.
• You need to have critical thinking skills to determine a clear understanding.
• You need to have good writing skills.
• You need to have an excellent understanding of your profession and the process from start to finish.
• You need to be an excellent communicator with everyone involved in the process.
• You need to have the right mindset to accommodate all expected and unexpected issues.
• You need to be able to minimize risks by properly managing conflicts or issues.  
• You need to explain every line item of the contract to your client to assure they have a clear understanding and the duties they have during the process.

There is no question that every contract has the possibility to have risks and challenges that are not identified until they happen. I have a saying that is very valid in our profession: "It is not a problem until it is a problem." We cannot control everything in the contract but if we consistently review our contract management process and fine tune our skills, we will become better contract managers, which will ultimately eliminate careless mistakes and issues that will cost you and your client time, value and money!