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International Contract Management: CLM Solutions Provide the Information You Need

Make no mistake about it. Managing contracts at a large firm can be a daunting task. As a minimum, there are several pieces of critical information to be cognizant of at all times. The terms, the expiration dates and cost to terminate are just some of the data pertaining to each contract you will need to know. Now multiply that by 1,000 or even 10,000, depending on the size of your organization, and the challenges become even greater. Throw in an international component to your operation and managing all of this information could seem like an impossible endeavor.

Unless, of course, you have the right Contract Lifecycle Management (CLM) solution.

That's what Deb Weidenhamer, the chief executive of Auction Systems Auctioneers & Appraisers, recommends. The executive at the Arizona-based business contributes to the small business blog in the New York Times, and wrote a recent piece about her experience managing contracts with workers in China, where virtually every employee has an employment contract.

International Business Relations and Cultural Norms

There are several international business regulations, Chinese labor laws and basic Chinese cultural norms that have to be considered during the negotiation, construction and management of a contract with Chinese employees. Many require the assistance of a lawyer with in-depth knowledge of such matters, but there are some differences between Chinese and non-Chinese contract agreements that might be initially overlooked here in the U.S.

Of those differences is the job description, which Weidenhamer explained in the article.

"In the United States, we think nothing of requiring an American office manager to wash his or her own coffee cup at the end of the day, but in China, the expectation is that an 'ayi' — literally, it means 'auntie,' but we would call her a maid — cleans up after everyone," Weidenhamer wrote. "In addition, a male employee may view typing a report as woman's work — and thus beneath his position. That's why it's critical to be completely clear about a job's specific tasks during the job interview and contract negotiations."

Contract Terms and Premature Termination Penalities

She went on to explain a number of laws that not only require your understanding, but also require a great deal of information management to ensure your organization is in compliance with them. For example, an employee can walk away from a three-year contract before it ends without being penalized, but if that employee is terminated, they must receive one month's worth of pay for every year left on the agreement. There may also be circumstances that require you to pay a bonus if you let an employee go at a certain time during the agreement. Litigation will almost certainly occur if these payments are not made.

Weidenhamer recommends three-year deals when hiring Chinese employees because it gives her firm a chance to see if that employee can fit with the organization for the long-term. If you follow that model, you will not only have to consider international factors and other information pertaining to the contractual agreement, you will have to do so for at least three years.

CLM to the Rescue!

A CLM solution can help because it allows you and other contract stakeholders to easily monitor pertinent contract information via reports and alerts and, when data is needed, it is immediately available and can be found quickly. Contract information is managed in a central repository that allows administrators to provide secure access to those who need information, limiting their access to only the information they are allowed to see. When using cloud-based CLM solutions, contract information can be securely accessed from virtually any Internet connection. A contract obligation need never be missed, because contract and employee managers have the information they need at their fingertips.

Tags: CM News

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