What is Contract Lifecycle Management software? An overview

At Linklaters, we’re passionate about contract management that drives meaningful business results. That’s why we built CreateiQ, the first data-driven Contract Lifecycle Management (CLM) platform, to help our clients leverage their contract data and drive value.

We believe that CLM solutions need to go far beyond speeding up the drafting, negotiation and execution of contracts (though CreateiQ has that covered too).

That’s why we pioneered a data-first approach that enables in-house teams at some of the world’s largest organisations to minimise their systemic risk as well as unlock new opportunities that directly boost the bottom line. Our platform achieves that by providing access to all key contractual information that’s needed to drive strategic decision making.

CLM software is a broad industry – with many different platforms, services and solutions to choose from. To help navigate this landscape, this article will give you a broader overview of what CLM software is, its benefits and functionality, as well as the different types of solutions, and their advantages and disadvantages.

What is Contract Lifecycle Management software?

Contract Lifecycle Management (CLM) software, is any solution that helps to streamline key stages in the contract lifecycle – whether that’s the creation of contracts, negotiation between parties, review, signing, renewal or general management of documents and legal processes.

Some providers focus on the entire contract lifecycle, whereas others solve a portion of the contracting journey – say from the execution to ongoing management of contracts – or just one – like getting a first draft ready to send out.

We believe the direction of travel for CLM solutions is for them to become more specialised over time rather than a generic “catch-all” solution for all stages of the contract lifecycle.

This will allow institutions to pick best in class tools for each stage, but it’s critical that all tools can be fully integrated both with each other and the wider business to ensure true automation can take place – and to do that, institutions need to pick tools that are data-centric.

For example, CreateIQ, the CLM platform created in-house by Linklaters, takes such an approach, enabling all contractual information to be stored – allowing full lifecycle automation, digital audit trails and as well as allowing direct access to all contractual terms in real time.

Why is Contract Lifecycle Management important?

Contracts can be viewed as the lifeblood of an organisation - they underpin all business relationships, between customers, shareholders, suppliers, and employees. A organisation’s process of creating, negotiating, and managing legal documents can significantly impact its financial position. A poorly managed, manually process can have dire consequences while an effective CLM process aids to drive revenue, reduce costs and mitigate risk.

A recent report by World Commerce & Contracting found that an average of 9.2% of annual revenue is lost due to ineffective contract management such as slow negotiations and missed milestones. This percentage is even higher, 15%, for larger organisations.

The main challenge when creating an effective contract lifecycle process is that contract creation, negotiation and execution can involve dozens of collaborators, multiple departments, and hundreds of hours of work.

Benefits of CLM software

1. Reducing costs and complexity: CLM platforms speed up the contracting process by cutting down blockers in the contract lifecycle. Solutions can help locate contracts, collect signatures and approvals, complete the drafting process and much more. By having a clearly defined process online, things get completed faster, reducing the time spent on each contract significantly.
2. Faster Negotiations: Traditional negotiations take much longer than they need to, with much time spent redlining documents, drafting emails and discussing provisions across a range of channels. It’s labour-intensive, inefficient, and often results in bottlenecks. CLM software solves this by allowing users to create digital playbooks that can be followed easily. For example, a digital playbook may include an automatic notification to the Risk team whenever a contract value goes outside an agreed risk tolerance.
3. Easy collaboration: Even simple contracts can involve multiple collaborators and layers of sign-off. CLM software replaces the need for multiple versions, allowing organisations to collaborate and negotiate in one unified workspace, with all edits, approvals, mark-up, and eventual execution taking place on the platform.
4. Mitigating risk: Data driven CLM solutions can facilitate significant risk mitigation. They can ensure contracts are signed-off by the correct teams, and can also issue important warnings – for example, when a contract is about to expire. Companies can also easily run queries on all contractual terms – which can be incredibly valuable, for example in identifying emerging liabilities.
5. Organisational efficiency: CLM software also allows for better monitored performance with data dashboards that give valuable insights and visibility into workloads and distribution, and where in the lifecycle delays are happening. Data-driven solutions also allow organisations to integrate their contracting process into multiple facets of the business, allowing for automation spanning far beyond the legal department itself.
6. Greater ability for business teams to self-serve: Digitised templates, playbooks and increased transparency mean legal teams can loosen the reins on contract negotiations, allowing commercial and procurement teams to self-serve many different contract types, with less need to engage Legal departments and Compliance.
7. Transforming the role of in-house legal: Data driven contracting increases legal teams’ ability to meaningfully impact their organisation’s financial position. Instead of being buried in a sea of word documents, contractual information is readily searchable, meaning legal teams are in a unique position to identify strategic commercial opportunities that may previously have gone unnoticed.

The Stages of Contract Management

When choosing a CLM platform, it’s important to understand each step of the contract lifecycle, as this goes well beyond simply drafting, negotiating, and signing.

We asked Greg Baker, Global Head of Innovation at Linklaters, for his insight. Greg regularly works with many of the firm’s largest clients on their own digitisation approaches and legal technology strategies.

Here are his 5 essential lifecycle stages for every type of contract:

1. Request and triage: The contract management process begins with a request from an individual or team, outlining the contract requirements. This could be for example, a sales agreement, MBA, loan agreement or licensing agreement. When choosing CLM software, it’s important to find one that allows you to work out where the volume and value is. Departments shouldn’t seek to automate every agreement but instead pick the top 20% that take up the most time, have the most blockers and have the clearest measurable impact on the bottom line.
2. Drafting and negotiate: Once the request is made, it’s a member of the legal team’s role to draft a contract, as well as negotiate via email and phone with each counterparty. CLM platforms like CreateiQ streamline the drafting process by providing one-click options for preferred terms and positions as well as clause libraries, with approved, consistent language that can easily be inputted into a document. They can also help counterparties make their positions clear in a negotiation, allowing for transparency and an automatic issue list generated, rather than that team member doing everything manually – meaning they spend less time comparing document versions and making drafting changes.
3. Execution: Once all terms are agreed, often a final approval needs to be given before execution – and then comes the collection of signatures, which can take a significant amount of time with multiple signatories. The best-known platform for managing this process is DocuSign, which is integrated into platforms like CreateiQ. By collecting e-signatures, DocuSign speeds up this process substantially – though many other platforms also have this capability.
4. Contract management: After execution, contracts need to be stored in a central repository – a Document Management System (DMS). For a lot of institutions, this is often a simple OneDrive folder, SharePoint storage or Google Drive folder, but there are more specialised providers that can help identify and sort contracts. However, the process of extracting and aggregating key terms in contracts is nearly impossible for complex organisations with high contract volumes. With new data driven CLM platforms, institutions can have real time access to all the data that’s in their contracts to help manage risk, identify opportunities, and automate items post-completion. Data centralization improves efficiency of managing contracts by recording orders, amendments, renewals, terminations, and performance targets into a database. This gives users instant access to key terms and dates - mitigating the risk of confusion, missed deadlines, or failing to meet contractual obligations.
5. Renewal / Close-down: Once they have reached the end of their term, contracts are renewed or terminated, either automatically or manually, as agreed upon by both parties. CLM platforms can help manage this process too, with auto-renewals and notifications to relevant parties at the required time in the contract lifecycle.

Types of CLM software

CLM Software come in all shapes and sizes catering to different aspects of the contract lifecycle, along with software tailored to specific end users, sectors, or company sizes. Here we’ll break down some of the main types, with examples of each:

• Enterprise CLM Software for Generalist Use 

• Enterprise CLM software for Specific Use Cases 

• For Procurement 

• For Sales Teams 

• For Financial Services 
• For Startups & SMEs 
• Hybrid CLM Platforms

• Enterprise Legal Management (ELM)

• Document Management System (DMS)

Enterprise CLM Software for Generalist Use

Many large institutions often have departments that maintain separate processes – for example the buy-side and sell-side of major investment banks.

However, in our experience its nearly always more efficient for both to leverage one centralized management system. Flexible all-in-one CLM software offers a solution for an entire organization, with capabilities to store all contract types. Benefits include improved reporting, compliance and better obligation management negating the need for duplicate processes.

Additional benefits include:

• Reduced costs of purchasing and maintaining only one system, as well as training time.
• Streamlined business intelligence and reporting resulting in comprehensive data for strategic decision-making.
• Complete visibility over financial data for expenditure budgeting as well as sales forecasting.
• Better relationships with third parties who might be both a supplier and a customer.
• A centralised hub for all document types.

However, sometimes departments need to be pragmatic – and act to improve their contracting processes before the roll-out of a group wide solution.

Here, it’s useful for teams to try and jump a solution that has already been approved for other use cases within their organisation, or if none exist, focus on those platforms that are used by industry peers.

For example – CreateiQ has been approved by nearly 100 large institutions, particularly in the financial space, with 6 of the 10 largest banks in the world using it.

For any institution, having the confidence that a solution is tried and tested is critical to the success of the initiative.

Examples of other Enterprise CLM Software for Generalist Use

The following platforms support multiple contract types:

• Icertis: Founded in 2009, Icertis has demonstrated market responsiveness and adaptability by developing “business apps” for clients that go beyond what a traditional CLM solution can do. Examples include a solution to help retailers manage promotions and rebates. As well as an app to track compliance for government contractors.

• CobbleStone Software: Founded in 1995, CobbleStone Software’s client base is evenly distributed between small, midsize and large enterprises. It offers three different versions of its Contract Insight CLM software, each with different options for hosting, user licensing, and features. There is an affordable entry level contract repository for customers that choose to start small, with the option to upgrade over time to their full featured, enterprise level solution.

• Agiloft: Founded in 1990, clients range from small and midsize enterprises (SMEs) to large enterprises. Agiloft is open to building custom add-ons for clients. Additionally, Agiloft’s no-code platform allows customers to create their own custom modules, improving the software’s ability to execute for industry- or company-specific requirements.

Enterprise CLM software for Specific Use Cases

For Procurement Teams

Procurement professionals are tasked with sourcing products and services from the best available vendors at the lowest possible rates. This results in multiple concurrent activities occurring at once. These multiple activities can become hard to track and affects the overall efficiency and effectiveness of procurement teams. This is where a buy-side CLM software can be helpful, with functions like virtual signing, process automation, and business intelligence. A CLM software for this use case can drive powerful results and important business metrics.

Benefits of using CLM software for procurement include:

1. Improving negotiations with vendors: Teams gain the ability to re-negotiate pricing or terms with current vendors or multiple at once.
2. Improve management of expenditures: Teams can easily recognize potential discounts in price within existing contracts.
3. Improved management of deliverables: Easily ensure that the procured goods and services are delivered and paid for according to contract terms.

Examples of CLM software for Procurement Teams:

• GEP: GEP is primarily used to manage buy-side contracts. GEP also offers solutions that span the entire source-to-pay process. Including spend analysis, sourcing, supplier management and P2P. Its customer base consists mostly of large organizations. GEP’s CLM solution is a core part of its broader source-to-pay suite. Most customers can use GEP to take advantage of native integrations that enable the creation of contracts from sourcing events and tracking purchasing compliance across purchase orders and invoices.

• JAGGAER: JAGGAER’s products are less expensive than those of other source-to-pay vendors that include CLM functionality.JAGGAER offers a tiered pricing model that uses company size to determine subscription pricing. Contract templates from JAGGAER’s CLM module can be pulled into an RFP in the sourcing module for negotiation of terms before awarding a sourcing event. Sourcing event data automatically populates contract templates for the winning bidders before contract creation. Customers can monitor purchasing against contracted agreements with measurable deliverables and track budgets against any contract. Suppliers can also invoice directly from a contract, rather than requiring a PO for invoice approval.

For Sales Teams

Sales teams benefit from Sale-side CLM software through its ability to streamline the contracting and sales process. Teams can get immediate access to contract templates, existing contract information, and approved language functions for provisions and terms, to ensure the entire sales process is completed efficiently – and allow sales teams to spend more time selling.

Examples of CLM software for Sales Teams:

• Conga: Conga caters to all contract types but focuses on sell-side end users. Conga offers configure, price and quote (CPQ) and revenue management solutions, making it a go-to choice for sales operations. The company continues to invest heavily in its Salesforce-specific product lines.

• DocuSign: DocuSign’s CLM product addresses all contract types, but the majority of customers use it for sell-side contracting. DocuSign has recently enhanced its ability to extract and analyse contract data to provide more efficient contract review and analysis.

For Financial Services

Financial agreements are a critical part to every transaction. For the financial services sector, CLM software provides complete visibility into the portfolio allowing teams to report and monitor their existing contractual relationships, and ensure they are always in line with emerging regulatory requirements.

Benefits of using CLM software for financial services includes:

• Complete visibility into contract portfolios ensuring compliance with SOX, ISDA, ESMA, and FINRA regulatory requirements.
• Teams can uncover possible risk elements within contracts, allowing for faster assessments for probable impact and faster and more effective corrective action using data-driven insights.
• Enables self-service contracting to ensure better business outcomes through smarter contracts to accelerate client and supplier onboarding.
• Ability to leverage contract intelligence to keep financial agreements up to date.
• Ensuring accounting compliance by automatically tracking key dates and terms.
• Teams can discover underperforming contracts and cost saving opportunities.

Examples of CLM software for Finance Teams:

• ISDA Create: ISDA Create is a collaboration between ISDA and Linklaters, and offers a rich set of user-friendly features, a full audit trail of the negotiation history, risk management tools and real-time transparency on progress with every counterparty – all through one digital workspace. The platform has been extended to other documents, including the ISDA Master Agreement.

• Sirion Labs: Sirion Labs is an AI-powered platform that digitizes all phases of the contract lifecycle for sales, procurement, and other enterprise contracts. It’s prebuilt with integration adaptors for ERP, CRM, and other third-party enterprise systems, and enables anytime-anywhere access with an access-controlled cloud repository.

• Juro: Juro is a #1-rated contract platform for ease of use. The platform gives visibility on contracts at every stage through no-code approval workflows that maintain visibility at every point in the contract lifecycle. Juro's digital format also gives you the ability to build contracts from structured data from day one.

CLM Software for startups and SMEs

SMEs are defined as independent businesses with around 50-250 employees that favour flexibility and innovation. Due to their size, to be successful, SMEs primarily focus on creating new products or services allowing them to adapt faster to changes in the market.

This means the CLM software must also be flexible, as many SMEs look for product versatility as well as a good level of customer support. To accomplish this, many CLM platforms in this segment have partnered with CRM systems such as Salesforce, Freshworks and Zoho to streamline business operations, data storage, and customer interaction management even further.

Leading software for SMEs include Juro, Conga and DocuSign.

Hybrid CLM Software

Enterprise Legal Management (ELM)

Enterprise legal management software enables in-house legal departments to get an overview of legal spend across their entire organization. It is described as a type of hybrid CLM solution that integrates with enterprise legal management suites when a legal department solution is a priority. ELM software stores and locates documents and records associated with each procurement or sale, including all the people, processes, and information across the legal department, as well as wider internal stakeholders and external counsel that legal interacts with.

ELM software is a single non-domain-based platform that integrates the components of:

• Enterprise Matter Management
• Spend Management (e-billing)
• Workflow Automation
• Contract Management
• Content Management
• Reporting and Analytics

Leading ELM software include doeLEGAL, Legal Suite and Mitratech.

Document Management System (DMS)

A DMS allows you to create, store, track and ultimately manage your documents. It helps digitize contracts and documents and keeps them organised and easily retrievable.

DMS platforms allow teams to:

• Keep all documents in one central hub that is easily accessible.
• Share documents to authorized users who have access.
• Store previous document versions in case of unforeseen updates or errors.
• Store documents securely and minimise data breaches.
• Keeps track of linear document flows for visibility on who is currently working on the document and the history previous contributors too.

A final word on CLM Software

We hope this article has served as a useful guide to help you navigate the CLM software space. With over 50 software providers in the space, the decision as to which solution is best for your teams and organisation will remain a highly specific to your exact requirements.

As providers continue to innovate and bring new features and capabilities to market, there is one constant that will remain the same - that data-first contracting will remain a step-ahead of the curve.

In a truly digital world, the power of CLM software lies not in surface level functionality but with the new opportunities and transformation brought about by the data it unlocks.