CLM in 2025: From simple repository to core enterprise technology 

The CLM market is on the move, becoming more stratified with point solutions on one end and enterprise contract management solutions on the other.  

CLM users are also getting smarter and recognizing the potential financial impact an enterprise contract management solution can have on their core business, with only a handful of solutions that can achieve that at an enterprise level.  

With over half of the organizations polled recently saying they are using a CLM for contract lifecycle, and as CLM technology grows and matures (with a Total Addressable Market (TAM) of $3.69B expected by 2032), so do conversations. But how is CLM software used in the current day, and what does the future hold for contract management? Read on to learn more. 

How CLM software is used today

Let’s begin with the definition of a CLM software. For smaller companies it may be a basic repository. Or, is it a repository, plus drafting and tracking? Or, is it the other side of the contract lifecycle, tracking obligation management and leveraging artificial intelligence (AI) to drive business initiatives?  

Shockingly, many organizations today rely solely on the human factor for accuracy in not only creating contracts but tracking obligations as well. A recent Agiloft survey conducted through Corporate Counsel Business Journal (CCBJ) and their readership database found 48% of the respondents still use manual processes or spreadsheets to keep track of their contracts, while only 25% said that their organization was fewer than 500 FTEs. This means there are a lot of sizeable organizations relying on human accuracy alone for their contractual commitments.

There may be a reason for the hesitancy though. Perfectionism in the legal industry is a known phenomenon. With the rapid advancement of technology, legal professionals may lag in technology adoption waiting for all the kinks to be worked out. This can mean that they are left well behind in the game of efficiency, accuracy, and effectiveness.  

While being a laggard in technology adoption is fine in many instances, in the case of business technology, specifically CLM software that is becoming increasingly more standard within organizations, you’re running the risk of waiting too long and falling behind. 

Think of Kodak resisting digital technology or Blockbuster’s blind eye to streaming. While different technology was core to their product offerings, it was the lack of adopting to shifting technologies that led to their anemic existences today. This can be said the same thing of contract management because of its shift in importance to organizations and how their business is run, regardless of the sector they’re in.  

From nice-to-have to core enterprise technology 

There is a growing acknowledgment that CLM has matured beyond legal tech. Now, it is firmly considered enterprise technology and viewed as a core system.  

This is also great news for a lot of departments, many of whom own the contracting function within their organizations. Law departments have long been viewed as cost centers, but more and more organizations are recognizing that contracts really are the glue that holds together all commercial activity and need to be utilized well beyond the law department. Law departments championing CLM are leading the way and winning awards on corporate innovation initiatives. 

A data-first approach to legal operations 

How do Legal operations – both attorneys and non-attorneys, view business? In conjunction with the rise of Legal Ops as a profession, business has become more of a focus for the legal department than ever before. Legal operations at its core is concerned with the running of the legal department in terms of fiscal responsibility, administrative management, and technology support.  

Of course, the reason this came about is because attorneys observed the need to come off the sidelines and become more core to the business itself as strategic partners instead of just serving as a cost center. The fact that both lawyers and Legals Ops are becoming more and more central to day-to-day business operations, do they believe in spreading the wealth of knowledge in the form of contract data throughout the organization?  

It’s important that both lawyers and Legal Ops understand what they have in their possession in terms of contracts, the lifeblood of any organization. Many organizations have adopted a “data-first approach to create a competitive differentiator within their market. But how do you become data-first? Start by taking the meta data within your organization’s contracts and make it available throughout the business within the applications that the other departments use every day. That’s what the best enterprise CLM platforms offer. It allows the finance department to track commitments, manufacturing departments to track inventory, procurement teams to track efficiencies, sales teams to track opportunities, and so on.  

Legal is not the sole proprietor of contracts. A data-first approach allows for the knowledge of how the business is put together and how it is expected to run and meet obligations, which are all held in contracts. This knowledge base needs to be dispersed and shared throughout the organization with controls in place.  

How VUCA applies to CLM 

VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) is a term that’s been around since the cold war, but use of it has picked up across the business landscape in the last couple of decades. Mitigating VUCA is another reason that the CLM market is booming. CLM streamlines and organizes processes and data in a way that allows organizations to respond quickly to unexpected transitions.  

The investment into CLM is usually instigated by some VUCA-related event that is pressing organizations into action. The more forward-thinking organizations plan for the unknown future, realizing that VUCA could pop up any time, due to circumstances beyond an organization’s control. Knowing that CLM can help to alleviate VUCA pain means that decisions are made quickly, 6 months – 1 year, to invest in CLM, as our second annual State of CLM report found. 

CLM’s benefits are two-fold, though. CLM not only makes contract management more efficient, but also allows companies to respond proactively by minimizing contractual risks, ensuring compliance, maintaining operational continuity, and ultimately leading to faster recovery for any VUCA event.  

The CLM discussion continues 

There are many discussions about CLM and how it’s involved in the greater business landscape as the technology continues to become a central enterprise solution for organizations worldwide. Some of the discussions include: 

• How CLM is defined by those that use technology for contracting and those that don’t 

• How it has moved from the legal department out to the rest of the organization as a critical, core enterprise system 

• A data-first approach sharing contract data throughout the organization needs to become standard 

• How CLM helps to avoid VUCA 

To dive into even more insights, view the on-demand webinar that covers findings from our second annual State of CLM report.