The ROI of a CLM Tool

So, you’ve heard the buzz about the newest wave in legal-tech: CLM solutions. With contracts at the forefront of nearly every business agreement that takes place, finding ways to improve the quality and efficiency of the contracting experience should be at the forefront of every organization’s priorities. But, what exactly does a CLM tool bring to the table? Is it worth the investment and the time it takes to successfully integrate one into your system? The answers to these questions may vary depending on the unique needs of your contracts. However, most CLM software solutions can provide a host of benefits in the way of increased profits, reduced costs, and better time management.

Who Benefits from a CLM Tool?

Since contracts are such an integral part of most organizations, the short answer to this is: everyone. The legal team may be able to expect an ease in their workload, freeing them up to handle other tasks rather than wasting time on miniscule details. Sales reps who are frustrated with a lengthy contract process that drastically delays turnover times may notice that agreements come to fruition much faster. CFOs, managers, and other team leaders can use the data provided by a CLM tool to make important decisions for the company and facilitate any changes in the contracting process that need to occur. In short, once you have your contract processes sorted, incorporating a CLM tool can potentially improve the quality of life for employees across all departments while also boosting revenue or cutting down unnecessary costs.

Where Will You See Benefits?

A CLM solution provides benefits in a host of different areas. These benefits can generally be grouped into categories: efficiency, costs and savings, and contract quality. Depending on the features of the software you choose and the priorities of your organization’s contracts, you can focus on the benefits that are most important to you.


Following the implementation of most AI-driven CLM solutions, you can typically count on a large, if somewhat gradual, increase in the efficiency of your organization’s contract lifecycle management. The features of these solutions facilitate not only faster contract authoring, but also better communication between internal team members working on the document as well as third party customers or vendors participating in the negotiations. In terms of efficient contract authoring, your CLM tool should be able to establish an integrated connection with your authoring tool that allows for the use of standardized templates when generating early drafts of a contract. Not to mention, the convenience of real-time editing ensures that you are always seeing the most current version of a given document.

Having a database that stores all versions of your contracts and allows members of the team to access them at any time and from any location increases visibility throughout the contracting process. With this increased visibility, you can cut down on wasted time caused by miscommunications, lost versions of a document, editing performed on outdated versions of a document, and more. Keeping important documents in a secure, online location also makes an auditing process much easier to endure.

Costs & Savings

The data provided by your CLM solution is an invaluable resource when it comes to allocating responsibilities among team members. By freeing up time for employees to spend on other matters, you can make better use of the staff you already have without needing to go through the lengthy and costly process of hiring more help. More time on the hands of your internal employees also reduces the amount of outside resources needed to complete agreements. For example, you may be able to avoid outsourcing for more counsel, drastically reducing legal costs by utilizing your own legal team who now have more time on their hands thanks to your CLM solution.

Contract Quality

Of course, not everything is about efficiency and savings. Faster turnover times mean nothing if contracts fail to maintain the quality standards set forth by your organization. A CLM tool can help make sure you meet those standards with every new contract authored. Many solutions that feature AI can automatically review contracts in their early stages to point out errors, incorrect clauses, variations from the standard template, and potential risks. In fact, your tool may even be able to run a risk model against a contract draft to determine the level of risk associated with the agreement and help legal teams figure out which drafts need more attention than others.

An AI system that works from standardized templates ensures that each new contract generated always adheres to company policies. Human error is practically unavoidable, but standardization provided by a CLM tool throughout the contract authoring process can help pinpoint the causes of problem areas in a contract and provide pre-written solutions to these problems from a large library of clauses. Thus, contracts will be better quality upon generation and receive higher quality solutions when they do encounter roadblocks.