Managing contracts isn’t just a tick-the-box legal formality — it’s a full-on business process that directly affects how smoothly your projects run, and even how happy your clients are. Still, many CEOs treat contracts like annoying paperwork and simply hand them over to the lawyer with a quick “make some edits.”
Spoiler: that’s not how you win.
Good legal support only works when everyone who has skin in the game is involved — from the folks who approve the contract to the ones who’ll be responsible for delivering on it.
I break down why poor contract handling is a ticking time bomb for your business and how to build a process that keeps everyone intact.
What can go wrong with sloppy contracting?
When it comes to signing a contract, it’s not just a legal checklist. You need to loop in your entire team — Finance, Delivery, Tech, and, of course, the CEO (especially when the terms are tricky).
It may seem like an extra layer of bureaucracy at first. But just like with any well-run system, having a clear contract process helps cut through the chaos, keeps things moving, and prevents legal (and financial) facepalms down the road.
Ignore this, and you could end up paying the price. Here are a few real-life examples:
A) The CFO wasn’t in the loop
The contract stipulated that the invoice had to be paid within 30 days. Sounds fine. But it didn’t say when the 30 days actually started — when the invoice was sent, or when the client decided they “felt like” acknowledging it. So the client just… didn’t. They played the “we haven’t confirmed it yet” card and dragged out payment for over 60 days.
And legally, nothing could be done.
A CFO would’ve flagged that immediately. They’d push to add a clause like: “If the client doesn’t raise any objections within 10 days, the invoice is considered accepted.” Problem solved.
B) No heads-up to Head of Delivery
The contract didn’t clearly spell out how the client was supposed to accept the finished work. The delivery team did their thing and sent the invoice, but the client refused to pay, claiming the job wasn’t “formally accepted.”
Why? Because the acceptance process (feedback deadlines, number of revisions, quality benchmarks) wasn’t in writing.
Had the Head of Delivery been involved, they’d have added clear acceptance criteria and a review deadline. That way, everyone would be on the same page, and the team would know exactly when to bill.
C) Sales got sidelined
The lawyer signed off on a contract with a “Time & Materials” model, but what else was included?
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- Strict quality benchmarks
- Milestones and delivery checkpoints
- Penalties for delays
Basically, it was a Fixed Price contract in disguise. The client took full advantage and refused to pay for time already spent.
The Head of Sales would have pointed out that the team presented a Time & Materials model without any responsibility for delivering results within fixed deadlines. That would have allowed the lawyer to insist on removing the Fixed Price terms from the template.
D) No CEO, no strategy
There was no clause regarding dispute resolution alternatives (such as negotiation or mediation). So, when a disagreement arose, the client went straight to court in their own country. That meant legal fees overseas and frozen payments while the case dragged on.
A CEO, thinking a few steps ahead, would’ve insisted on adding mediation or arbitration first. That would’ve at least slowed things down and opened the door for a resolution without a courtroom drama.
So what does good contract process looks like?
From what I’ve seen in the wild, a solid contract workflow typically consists of five key stages. Think of it as your legal assembly line — but with fewer bolts and more brains.
1. Initiation
It all starts when a manager submits a request in Jira (or your preferred task tracker). They specify:
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- What kind of contract is it (your template or the client’s),
- The cooperation model (MSA, T&M, Dedicated Team, Fixed Price),
- Deadlines,
- Who’s involved,
- And any other mission-critical stuff.
The lawyer obtains all the necessary context, gathers the raw data, and conducts a Know Your Customer (KYC) background check on the client. It’s like getting the map before the road trip.
2. Drafting the contract
This stage depends on whose template you’re using.
If it’s the client’s, you’ll want to give it a close read and tweak anything that feels sketchy or unbalanced. Key things to double-check:
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- What exactly are you agreeing to do (scope of work)
- Payment terms (when and how much)
- Responsibilities and liabilities (who’s on the hook if things go sideways)
- Timelines, jurisdiction, and how disputes are handled
- NDAs, intellectual property, and so on.
This is where the lawyer puts on their armor and gets ready to defend your business in writing.
3. Internal approval
The document is passed along to the relevant stakeholders for their approval. Usually:
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- Finance: Checks payment terms, tax implications, penalties for late payment, etc.
- Delivery: Reviews team setup, resource switching, client poaching safeguards, etc.
- CTO: Makes sure the tech side of the deal doesn’t contain any ticking time bombs.
- CEO: Handles the big stuff, like unlimited liability clauses. Some clients insist on them, but only the top brass can decide if it’s worth the risk.
All changes and comments get saved in the same Jira ticket (or wherever you’re tracking it). This beats trying to piece things together from random Slack threads or buried emails.
4. External negotiation
Time to send the updated contract to the client. The lawyer takes the lead here, managing the back-and-forth, logging all edits, updating the final version, and looping stakeholders back in if any significant changes arise.
This is where diplomacy meets documentation.
5. Signing & Stashing
For international clients, it’s usually time for an e-signature — think DocuSign or AdobeSign.
Once it’s signed, the contract is stored in a well-organized archive (something well protected and compliant with cyber security regulations) and indexed with a clean file name, ID, and date—no more digging through your Downloads folder or random desktop chaos.
How can an IT company build a workflow like this?
Start by taking a good, honest look at how things work today. What’s your current contract process? Who’s involved? Where does it jam up?
Next, figure out your approval model — centralized or hybrid. For example, maybe only certain types of contracts need full multi-department reviews.
Then, create a playbook: a simple and clear internal policy outlining how contracts are initiated, reviewed, approved, signed, and stored.
Formalize the roles, too. Here’s a cheat sheet:
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- Manager (Sales or Delivery): Starts the request, provides all the juicy details (scope, pricing, terms).
- CFO / Delivery Director / CTO / CEO: Approves the deal-breaking bits.
- Lawyer: Not just an editor! They quarterback the whole process — from review to signature to archive.
Set deadlines to prevent things from stalling. For example, 1-2 working days for the lawyer to review, and 2 days for stakeholders to approve. That way, no one gets stuck in “contract limbo.”
Once the workflow is defined, bake it into your tracking system. Automatic reminders, status updates, centralized feedback—all of this helps keep things clean, fast, and drama-free.
Last but not least — train your people. Write simple, step-by-step guides on how to submit a contract request, where it goes, what each status means, and so on. Then, run a few Q&A sessions and internal training sessions for both current staff and new employees.
A little upfront effort means way less mess later.
A smooth contract process = Business peace of mind
Having a straightforward, well-oiled contract workflow isn’t just a “nice to have” — it’s strategic business armor. It helps you avoid risks before they become costly headaches.
Bonus? Clients notice. A company that handles contracts like a pro sends a strong signal: “We know our stuff, we’ve got our act together, and we’re not here to play amateur hour.” That builds trust and reputation faster than any pitch deck.
