The Top Contract Management trends of 2022
Contract Management Trends for 2022 and Beyond
Over Christmas, I started thinking about the top Contract Management trends for 2022. Essentially, I believe that we will build on the trends that emerged in 2021 as we navigated our way through a new way of living, travelling and existing.
One general observation I have of us Contract Managers is that there is a fantastic opportunity to become more closely aligned with our Legal colleagues.
There is talk of a rise in Legal Operations and Legal Design type roles throughout 2022. If you look at what the generic job description of these Legal type roles are (and these aren’t usually qualified lawyers hence the comparison to us), we are doing many of the activities they are.
My additional point here is that I think you, as a Contract Manager, should be working closely with Legal.
Why?
To make massive improvements to how your business operates from a contracts perspective.
This year will be incredible if you make the most of the available opportunities.
The rise of the Contract Management Lifecycle tool/Legal Tech
I’m going to dedicate an entire blog to this very subject. Contract Lifecycle Management and Legal Tech solutions are getting better by the second.
With so many great solutions out there, Procurement teams will either be procuring these for their legal teams or being involved in the day to day usage of them.
As we enter a more regulated world, we have to deal with GDPR across the EU and the UK. We need to evidence various controls for our Organisations certifications. A good CLM is vital to evidence our compliance with all of this.
Additionally, in-house legal teams use non-qualified commercial professionals to review and draft contracts for their supplier facing contracts. This shift will mean more focus on contract authoring, which procurement solutions typically don’t offer.
We will see the rise of more integrations and native APIs between procurement solutions and CLMs that will create a seamless end-to-end process between sourcing and contract management.
What a time to be in the profession.
Building resilience into Supplier Contracts
Having specialised as a commercial & legal consultant during the initial nine months of the Covid pandemic and then taking an incredible Contract Management role soon after, I’ve witnessed a shift in the way we look at Supply Contracts.
Keywords that I discuss time and time again are “Continuity”, “Risk”, “Visibility”, and many more linked to ensuring that we have a risk first approach to contracting.
Additionally, there is a significant focus on certainty within contracts. A focus on certainty might sound crazy right because contracts should be certain. That’s a vital characteristic of a contract.
To enable this, we should focus on plain and simple terms that anyone can understand to ensure there is no confusion on either side.
RISK, RISK, RISK
Although that is important, we’re not just talking about Supply Chain Risk.
Business is moving faster than ever. We see more deals on the table than ever before.
Giving solid commercial advice and sourcing appropriate legal advice within our capabilities or in-house/external support is more vital than ever. More so, we need to do this speedily.
In addition to this, we need to better understand the risks that the business can take on and those it cannot.
The shift in advice and contract negotiations can focus on those that the company cannot accept. This shift in focus streamlines everything that the Contract Management Professionals can focus on.
Simplification of Contracts
Contracts have become incredibly complex instruments that even the drafters, at times, do not understand.
I’ve been reviewing a lot of contracts. I’ve reviewed every variation of MSA under the sun. They all pretty much say the same thing in a million different ways. The same goes for a lot of SAAS products. This is even worst when it comes to NDAs - they’re a nightmare to review.
Contract Managers need to promote the use of easy to read contracts that are accessible by all stakeholders. Only then can we speed up the time to contract with all stakeholders truly understanding the signed agreement.
There are a few methods that we can look at to achieve this:
Legal Design
Plain Engish (or language) Content in our Contracts
Adoption of Standardised (and crowdsourced) Contract Templates such as the oneNDA.
There are many potentials out there to make significant improvements to our businesses.
Are there any you’d add to this?