7 risks CLM tools help eliminate when you’re in-house
When you move in-house, you realise quickly just how much contracts underpin nearly every commercial relationship. Sales agreements are perhaps the most obvious example of this (especially if you work at a fast growth company). Contracts are deeply connected to revenue growth, from winning net new customers to other forms of key revenue generated via renewals, expansions and upsells.
Managing those agreements has become increasingly complex for in-house teams: contracts and versions are often stored across multiple systems; old templates are used (or none at all); progress is tracked manually; you’re expected to review and negotiate through lengthy email chains yet collaborate with colleagues via their platform of choice (Slack; Notion, Google Docs).
This complexity creates all kinds of risks, including financial exposure, lost revenue opportunities and compliance issues, and from a reputational perspective, Legal can (unfairly) be seen as a serious bottleneck.
Happily, Contract Lifecycle Management (CLM) tools offer a wide range of solutions to common contracting pain points that help to position you as a speedy, trustworthy, business enabler.
I sat down to chat about all this with Ashley Jones (Commercial Counsel, LinkSquares), who is no stranger to the challenges contracting can throw at you when you work in-house. We discussed how CLM tools are helping in-house teams fix risk issues by bringing structure, visibility and confidence to the contracting process.
Here are seven key contract risks we came up with that CLM tools are helping to reduce and eliminate.
1. Lack of contract visibility
Contracts stored across email inboxes, Salesforce, Slack, shared drives etc, and disconnected systems create major visibility gaps. Without a centralised repository, legal and business teams struggle to locate agreements, track obligations, or understand what commitments the organisation has made, which could lead to costly contractual breaches or customer churn.
How CLM helps: CLM tools close major revenue gaps by creating a single source of truth, allowing teams to quickly access and analyse contracts, set up automated alerts, and generally manage obligations with confidence.
“Two of the most expensive words in an in-house legal team's vocabulary are 'where is.' Where is that contract? Where is it in the approval process? Every day you can't answer either question isn't just a technology gap; it's a revenue gap. CLM closes both.” - Ashley Jones (Commercial Counsel, LinkSquares)
2.Missed renewal dates and termination windows
Many contracts contain auto-renewal clauses and strict notice periods. Without reliable tracking, organisations risk unintentionally renewing contracts or missing the opportunity to renegotiate payment terms and deal size.
How CLM helps: CLM tools provide automated reminders and alerts for critical dates, ensuring key teams (customer success, sales, procurement) can review agreements well before renewal dates and avoid ambushing a customer with a last-minute upsell, or stay locked into unfavourable contract terms. CLM tools can therefore be directly connected to company growth and deeper customer relationships.
3.Inconsistent contract language and terms
When teams rely on (or “accidentally” use!) outdated templates, or manually edit clauses, contracts end up with unapproved language, inconsistent or wrong terms. Over time this can significantly increase the likelihood of disputes, customer churn and lost revenue, or even regulatory exposure.
How CLM helps: they provide standardised, pre-approved templates that you designed, libraries and robust integrations with platforms like Salesforce, and generally ensure contracts reflect approved legal languages, commercial terms and organisational policies.
4.Slow approval processes that delay revenue
There is nothing more frustrating than spending months finalising a contract, only for it to stall at the 11th hour due to slow internal approvals. These delays can push deals into the next quarter, disrupt revenue forecasting, and undermine Legal’s reputation as a responsive, supportive business enabler.
How CLM helps: automated approvals streamline sign-off and eliminate the need for constant chasing by sending automated alerts to the relevant approver (CFO, CRO etc). They empower you instead to focus on strategic oversight on deals and contract phases that legitimately need your input.
5.Risks buried across large contract portfolios
Some companies close and manage thousands of contracts each year, making it extremely onerous to manually track and identify things like risky clauses, deviations from standard terms, or how those 17 contract addendums all relate to each other.
These hidden risks can expose your business to financial risk or even compliance issues that go unnoticed until a dispute arises (and Legal gets the blame).
How CLM helps: modern tools use AI-powered analysis to surface key contract data and insights, and help to get ahead of risk across your company’s entire contract portfolio.
“A large contract portfolio isn't just an organizational challenge; it's a risk multiplier. Every agreement sitting in an email thread or a shared drive is a clause you can't search, a deadline you can't track, and an exposure you can't quantify. CLM adoption is about more than enabling legal teams with technology - it’s about what you can finally do with the data you’ve had all along." - Ashley Jones (Commercial Counsel, LinkSquares)
6.“Shadow contracting” (aka AEs going rogue)
When business teams create or sign agreements outside established legal processes, this creates all manner of headaches and can impact your customer relationships too, if down the line it turns out the wrong terms were agreed.
How CLM helps: their systems enable structured collaboration between legal, sales, procurement and finance teams, giving you control and oversight and ensuring contract flows follow approved processes while allowing the business to move quickly. AEs should be encouraged to self-serve as much as possible, and CLM tools empower them even more because they’re reassured they’re following the fastest process to getting their deal done, too.
7.Audit exposure and compliance
If you work at a scale up and manage funding rounds, this one will resonate deeply. Poor contracts and inconsistent record-keeping can create serious challenges during a due diligence process. Don’t be the person that has to explain to their CEO why the $$$ funding round is taking longer to close than expected because of something thorny in one (or many) of your key customer/supplier contracts.
How CLM helps: they maintain a clear audit trail of approvals, revisions, etc, and you can quickly generate insights and reports on meta data for buyers and investors (and government departments!) to review. You’re always ready for that scrutiny!
“Audit readiness isn't something you perform; it's something you build. If your response to 'show us your contracts' kicks off a treasure hunt, you're not being audited on your compliance, you're being audited on your chaos. The good news is that's entirely fixable, and the roadmap already exists.” -Ashley Jones (Commercial Counsel, LinkSquares)
Contracts are powerful business (not legal) documents and should not be archived and forgotten about after execution. With the right CLM tool, they become a powerful source of business insight, compliance reassurance and risk reduction. For all these reasons, they help to position you as a more trusted business enabler.
CLM tools like LinkSquares help in-house legal teams gain full visibility and work smarter together. LinkSquares unlocks the full potential of your in-house legal team with purpose-built, AI-powered technology to perform, manage, and quantify all your work in one place. Our all-in-one platform includes end-to-end CLM and legal project management – connecting every corner of your business and freeing up legal minds to be the strategic partners your company needs.
“Most in-house teams think they have a solid contracting process, until someone asks for a specific clause across 200 agreements and the hunt begins. CLM tools exist to move you from ad hoc chaos to strategic clarity: where contracts aren't just stored and forgotten about, but instead propel the business forward. The teams who get there stop putting out fires and start seeing around corners.” - Ashley Jones (Commercial Counsel, LinkSquares)
This article was written in collaboration with LinkSquares, a leading CLM platform designed to help legal teams gain full visibility into their contracting processes and reduce risk across the organisation.
Learn more about how LinkSquares supports modern legal teams at LinkSquares.com
