Why Contract Management Should Start Before the Contract Is Signed

In many organisations, contract management is treated as a downstream activity — something that begins once negotiations are complete, documents are signed, and the deal is “done.” At that point, the contract is handed over to a Contract Manager with the expectation that it will now be administered, monitored, and enforced.

On paper, this handover appears logical. In practice, it is one of the most common structural weaknesses in commercial governance.

Too often, Contract Managers inherit agreements they had no role in shaping, with limited insight into the intent behind key clauses, the concessions made during negotiation, or the risks that were consciously accepted to get the deal across the line. The result is not poor contract management capability, but a model that introduces avoidable risk at precisely the point where execution risk begins to rise.

Contract Signature Is Not the End of Risk — It Is the Beginning

Contracts do not fail at signing. They fail during delivery.

Once a contract is executed, organisations move rapidly into operational mode: services commence, milestones approach, invoices are raised, dependencies emerge, and performance expectations collide with reality. It is in this phase — not during negotiation — that ambiguity, misalignment, and poorly articulated obligations surface.

When Contract Managers are introduced only at this point, they are expected to manage performance, enforce rights, and resolve issues without the benefit of understanding:

• Why certain clauses were included or softened
• Which risks were considered acceptable trade-offs
• What “commercial intent” sat behind contractual wording
• Where negotiation pressure influenced outcomes

This absence of context weakens the organisation’s position from Day 1 of execution.

The Inherited Contract Problem

Many Contract Managers will recognise the situation: they are handed a signed agreement and asked to “make it work.”

They may receive the contract itself, but not the negotiation history. They may see service levels and KPIs, but not the operational assumptions that shaped them. They may be expected to manage variations or disputes without knowing which issues were heavily contested and which were agreed quickly to maintain momentum.

In these circumstances, Contract Managers are not managing contracts so much as managing inherited risk.

This is not a capability issue. It is a timing issue.

By the time the contract is signed, leverage has shifted. Opportunities to clarify, rebalance, or refine obligations have passed. What remains is interpretation — often under delivery pressure — rather than deliberate commercial control.

What Gets Lost When Contract Management Is Absent During Negotiation

The negotiation phase is where critical decisions are made, often under time constraints and competing priorities. These decisions shape the entire lifecycle of the contract, yet they are rarely captured fully in the final document.

Without early involvement, Contract Managers miss insight into:

• Informal concessions made to reach agreement
• Risks consciously accepted but not fully mitigated
• Dependencies that were acknowledged verbally but weakly documented
• Areas where wording was intentionally ambiguous to avoid delay

These nuances matter. They influence how issues should be interpreted, escalated, or resolved once delivery begins.

When Contract Managers are excluded from this phase, the organisation effectively separates commercial intent from commercial execution.

Early Involvement Is About Execution, Not Administration

Involving Contract Management professionals earlier is not about adding another layer of process or slowing procurement activity. It is about designing contracts that can be effectively managed in the real world.

Contract Managers bring a delivery-focused perspective to negotiation. They understand how clauses will operate operationally, not just legally. Their input can improve:

• Practicality of KPIs and service levels
• Clarity of governance and escalation mechanisms
• Alignment between contractual obligations and operational capacity
• Structure of remedies, incentives, and performance management

This input helps ensure contracts are not just well-drafted, but fit for execution.

A Critical but Often Missed Opportunity: Continuity from Negotiation to Early Delivery

An extension of this thinking — and one that many organisations overlook — is the value of continuity between negotiation and early contract management.

Where third-party advisors have supported the negotiation and contracting process, there can be significant benefit in having those same advisors lead the contract management function through the establishment and early implementation phases.

This is not about outsourcing contract management indefinitely. It is about recognising that the early stages of a contract are fundamentally different from steady-state operations.

During establishment and implementation, contract management is rarely transactional. It is interpretive, judgement-based, and closely tied to delivery realities. Decisions made during this phase often set precedents that shape the remainder of the contract term.

Advisors who were involved in negotiation bring:

• Full visibility of negotiation intent and trade-offs
• Detailed understanding of risk positions and fallback scenarios
• Awareness of where flexibility exists — and where it does not
• Credibility with suppliers formed during the contracting process

This context allows them to operationalise contract management in a way that aligns intent with execution, rather than retrofitting controls after issues emerge.

Establishment-Phase Contract Management Is a Different Discipline

Early-stage contract management typically involves:

• Standing up governance forums and reporting
• Translating contractual obligations into operational processes
• Clarifying roles, responsibilities, and escalation pathways
• Managing early variations, dependencies, and mobilisation issues
• Setting performance expectations and behavioural norms

These activities benefit from deep contract context and commercial judgement. They are less about administering clauses and more about embedding the contract into the operating model.

Having experienced advisors manage this phase can stabilise delivery, reduce early friction, and ensure the contract is being used as intended — not simply complied with mechanically.

Transitioning to Steady-State Management

Once the contract has stabilised and delivery moves into steady state, the nature of contract management often changes. The focus shifts toward:

• Routine performance monitoring
• Invoice validation and compliance
• Periodic reporting and reviews
• Managing standard variations

At this point, it is often appropriate to transition contract management to internal teams or a more transactional operating model.

When advisors are involved early, they can support a structured handover, ensuring:

• Knowledge transfer of intent and context
• Clear documentation of precedents and decisions
• Established processes and templates
• Reduced dependency rather than ongoing reliance

This approach treats third-party involvement as an enabling phase, not a permanent operating model.

Reducing Downstream Cost and Conflict

Many contract disputes arise not from bad faith, but from misaligned expectations and unclear obligations — often established early and left unaddressed.

Continuity from negotiation through early delivery reduces this risk by:

• Preserving commercial intent
• Avoiding early misinterpretation of obligations
• Establishing consistent governance behaviours
• Creating a shared understanding of “how the contract works”

The cost of supporting early-phase contract management is typically modest compared to the downstream cost of disputes, rework, or underperforming agreements.

Contract Management as a Lifecycle Capability

Ultimately, contract management should be viewed as a lifecycle capability, not a post-signature function.

Organisations that consciously design for:

• Early involvement
• Continuity through establishment
• Structured transition to steady state

are better positioned to realise value, manage risk, and maintain constructive supplier relationships over the life of their contracts.

The question is not whether contract management should start before signing — but how continuity and context can be preserved long enough for the contract to truly take hold.

About Arlington

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