What is a Contract Manager?
A Contract Manager orchestrates the Contract Management Lifecycle. The creation, execution and analysis of contracts to maximize operational and financial performance, while reducing risk.
- Drafting Contracts – Drafting the contractual agreements that outline the terms of sales, purchases, employment or partnerships.
- Negotiation – Negotiation is a key part of customer and vendor related contracts making sure to align the interests of the company to its counter-party’s expectations.
- Coordination – Contract creation and delivery frequently bring together multiple parts of the company from Finance, Legal, Operations & Sales. A significant part of the contract management role is typical project management.
- Compliance – Once the contract is executed, the contract manager’s job is not finished. Monitoring adherence to the terms in the contract is a key part of their responsibilities
- Risk Management – A key part of a Contract Manager’s role, is reducing risk. Making sure the company doesn’t overcommit, do business with dubious third parties and negotiating liability clauses in contracts.
- Performance Monitoring – Making sure the existing contracts are effective and the business is getting value for money is important. Are the service providers delivering against their objectives? Are we overpaying for the service?
- Renewal / Termination – The decision and execution of renewals and terminations are also key responsibilities.
What skills does a Contract Manager typically possess?
The key skills for contract management are:
- Attention to detail – Contracts are legal documents with intricate language. As you can imagine, Contract Managers need great attention to detail to manage those effectively.
- Negotiation Skills – Contracts often represent agreements to some of the most important relationships a business has – it’s suppliers and customers. A key part of the skillset required is to be able to negotiate terms in the contract that are beneficial to the business.
- Communication – Given the number of internal & external people contract managers interact with, it is key they have crisp and clear communication.
- Legal Knowledge – A contracts manager frequently has an understanding of contract and business law. This also includes compliance with the various regulations and understanding how upcoming changes would impact the business.
- Expertise in contract management software – Contract Management Software can significantly increase the volume of contracts that an individual contracts manager can manage in any given year.
What types of Organizations need Contract Managers?
- Large Enterprises – Larger enterprises tend to have many more large contracts with vendors and customers that all need managing. These roles exist in large enterprises across industry sectors – technology, manufacturing, retail, finance and telecommunications.
- Healthcare & Pharma – Hospitals, clinics and pharma companies all require contract managers to handle their contracts with service providers, vendors and suppliers. This role is crucial in this industry because of regulatory compliance requirements through HIPAA (patient privacy regulation), FDA (drug safety) and billing and reimbursement (Medicare). In Pharmaceuticals specifically, there are a lot of IP contracts related to drug development and commercialization.
- Technology / IT Companies or Departments – Contract Managers are frequently employed here to oversee software licensing agreements, service level agreements and procurement contracts.
- Consulting or Professional Services firms: By their nature, consulting firms engage in contracts with unique deliverables and deadlines with clients. More complexity can be added with sub-contracting agreements.
- Non-Profit Organisations – Non-profits frequently engage in contracts & grants for fundraising, partnerships and service delivery. Contracts and grants can come from private, corporate, or state and federal sources in the United States. These frequently come with high reporting and management requirements which need to be tightly controlled.
- Legal Firms – Given the nature of the profession, it’s not surprising law firms often have contract specialists on staff to deal with contractual matters within the firm.
- Higher Education – Universities frequently employ contract managers to handle agreements including vendor contracts, partnerships & student housing agreements.
- Construction & Engineering – The construction and engineering industry relies heavily on sub-contracting agreements and suppliers which are frequently bound by complex contracts. With increasing regulation and lots of project management required here, these tend to be quite specialized roles.
Contract Manager Data in the United States (as of 2024)
Source: Zippia and ContractHound’s own research
The average salary in the United States for a Contract Manager is $72,691.
We’ve estimated the number of contract managers in the United States at over 40,000. The Zippia link above shows a figure of 45,000. So somewhere around there is the right number. That number has stayed approximately the same over the last 5 years.
Interestingly, because of the requirements of the role, most contract management professionals are experienced. According to our research, approximately 3% of contract management professionals have less than 5 years industry experience.
Staggeringly, over 80% of professionals in contract manager roles have over 10 years experience in the United States.
It’s important to note that many people in SMB’s and Non-Profits operate with some of the responsibilities of professional Contract Managers but are not officially called Contract Managers. Members of the legal & finance team, HR, Operations and administrative assistants frequently perform some or all of these duties as part of their role.
Now you have a clearer understanding of what a contract manager does. Contract managers are one of the unsung heroes of the back office in many types of organisations. Their work paves the way for smooth operations, cost management, happier customers and strong partnerships.
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The contents of this website do not constitute legal advice and are provided for general information purposes only. You should seek appropriate legal advice before taking or refraining from taking any action based on the contents of this website. We accept no responsibility for any errors, omissions or misleading statements on this website, or for any loss which may arise from the use of information contained on this website.