What is CLM?

Modern legal teams have come to the conclusion that they need contract lifecycle management (CLM) software to organize their agreements, increase productivity, and position themselves as a business partner.

Effectively named, CLM solutions manage the contract lifecycle, which means they help with the steps in the contracting process, including:

Creating a contract

• Drafting a proposed contract
• Editing a contract (also called redlining)
• Finalizing a contract

Executing a contract

• Signature
• Counter-signature

Managing a contract

• Storing an executed agreement
• Extracting data from a contract to parse out obligations, opportunities, and risks
• Pushing extracted contract data into another system

Centralize and organize your contracts.

The foundation of a Contract Lifecycle Management solution is a contract repository, which is a central online storage system for all your contracts. A repository connects to every local device and cloud storage system you use, draws in all the contracts you have in these systems, then helps you organize them into a cohesive contract portfolio. Having a single place to manage your contracts makes them easier to find and keep secure. This is especially important when different departments, such as sales, marketing, and finance, draft and execute their own agreements. 

Draft contracts faster (and with ease) 

Most CLM systems have a workflow management function that helps you track contracts from early drafts to redlines to final agreements. This ensures everyone knows where every contract is on your deal pipeline and helps clear up bottlenecks by identifying who is responsible for what task in each stage.  

Standardize contract language

Advanced Contract Lifecycle Management solutions go one step further, enabling anyone at the organization to assemble contracts from boilerplate language and legal templates. This means each contract is built in less time and with less legal oversight. It’s a win-win for all parties involved. It also keeps your contract language standardized, so “one-off” versions of your standard policies and best practices don’t make it into binding agreements.

Extract critical data from contracts

Some of the hardest questions to answer for many organizations are, “how many of my contracts renew next quarter?” or “how many employee agreements comply with the new regulations passed last month?” 

Many legal teams try to track these data points when contracts are executed, but short of actually reading every arrangement, few can answer real-time contract questions when they come up. Modern CLM software can extract this data from all of your legal agreements, so you have accurate answers any time you need them.