How I Successfully Chose a CLM Tool
Choosing the right Contract Lifecycle Management (CLM) tool can make or break your legal function's efficiency. When I was building the legal team from scratch at a fast growth tech company, I knew we needed a CLM solution to handle our rapidly growing contract volume, but I also knew that rushing into a purchase without proper planning would be a costly mistake.
The legal tech landscape has evolved dramatically since I first wrote about this experience. The explosion of generative AI has transformed what's possible in contract management, and we now have numerous point solutions targeting specific contract pain points. However, this guide assumes you've already determined that you need a comprehensive, end-to-end CLM platform rather than a collection of point solutions.
Here's exactly how I approached the CLM selection process and successfully implemented a tool that transformed how our legal team operated.
The Modern CLM Landscape
Before diving into the selection process, it's worth acknowledging how much the market has changed. Today's CLM vendors are racing to integrate AI capabilities, from contract drafting assistance to automated risk scoring and obligation extraction. Point solutions have also proliferated, offering targeted fixes for specific contract challenges like redlining, negotiation analytics, or clause libraries.
If you're reading this, I'm assuming you've already decided that a full CLM platform makes sense for your organisation rather than cobbling together multiple point solutions. This decision typically makes sense when you need comprehensive contract visibility, standardised processes across multiple contract types, and integration with your broader business systems.
1. Didn't Buy the Tech First
The golden rule when buying any legal tech is to map the people first, then the processes, and only then buy the tool.
I didn't even think about buying CLM until I first figured out who would manage it internally. This meant identifying not just who would be the system administrator, but also understanding who would be the primary users, who would need training, and who would be responsible for ongoing maintenance and updates.
Then I mapped out exactly which processes needed to be replaced with automation and AI. This step was crucial because it helped me understand what features we actually needed versus what sounded impressive in vendor demos.
2. Audit First
You must first do an audit of your business pain points, what they're currently costing the business, and why legal tech will fix these issues. This becomes your business case.
My pain points were:
Order Form Control: Previously created in Xero (an accounting tool!), anyone could put anything in them regarding pricing and legal terms. This created massive inconsistency and risk.
Intake and Versioning Chaos: We had no standardised way to receive contract requests or manage document versions, leading to confusion and delays.
Silos: We needed a tool to integrate contract management from opportunity level through to execution in DocuSign, eliminating the handoffs that slowed everything down.
Speed: All the above issues were slowing down deal closures, directly impacting revenue.
No Repository: We had no centralised place to track contract obligations, renewal dates, or key terms, making it impossible to manage our contractual commitments effectively.
Each of these pain points had a measurable cost to the business, whether in time, risk, or lost revenue. Quantifying these costs made the business case for CLM investment compelling and clear.
3. Consensus-Building
You must have buy-in and support from the right internal stakeholders, otherwise you won't successfully select or implement CLM.
I worked closely with Revenue Operations, deal desk, and finance teams who shared the business pain points I had identified. This wasn't just about getting their approval - it was about ensuring they understood how the CLM would impact their workflows and getting their input on requirements.
These stakeholders became champions for the project, helping with user adoption and providing valuable feedback during the selection process. Their involvement also ensured that the CLM would integrate properly with existing systems and processes across the organisation.
4. Vendor Scorecard
I turned our business pain points into a CLM scorecard with two sections: non-negotiables and nice-to-haves.
My non-negotiables included:
Out-of-the-box Integrations: Seamless connection from Salesforce to DocuSign without custom development work.
Digitised Contracts: Moving away from the email plus Word document chaos that was slowing everything down.
One-stop Legal Shop: A single platform where the business could access all legal services and resources.
Controlled Versioning: Automatic version control to eliminate confusion about which document was current.
Back-end Repository: Centralised storage for contracts with searchable metadata and obligation tracking.
The scorecard approach kept our evaluation process objective and ensured we focused on solving our actual problems rather than being dazzled by impressive but irrelevant features.
5. AI Considerations in Today's Market
When evaluating modern CLM platforms, you'll need to consider AI capabilities that weren't available when I first went through this process. Key questions to ask include:
AI Transparency: How does the AI make decisions, and can you understand and audit its recommendations?
Data Security: How is your contract data used to train AI models, and what are the privacy implications?
AI Accuracy: What's the error rate for AI-powered features like clause extraction or risk scoring, and how do you validate results?
Human Oversight: Can you maintain appropriate human review and approval processes while leveraging AI efficiency gains?
Integration with Existing AI: If you're already using AI tools elsewhere in your legal function, how will the CLM's AI capabilities complement rather than conflict with your existing setup?
Don't be swayed by AI features that sound impressive but don't solve your specific business problems. The fundamentals of good CLM selection remain the same - focus on your actual needs first.
6. Structured Evaluation Process
We conducted demos with approximately eight vendors. This might seem like a lot, but it gave us a comprehensive view of the market and helped us understand what was possible within our budget range.
After initial demos, only two vendors made it to the final stage. These finalists went through more detailed evaluations, including technical deep-dives, reference calls, and pilot testing where possible.
I sat down with internal stakeholders and we made the final decision together. This collaborative approach ensured everyone felt heard and bought into the final choice.
Key Lessons Learned
Start with Strategy, Not Software: The biggest mistake I see teams make is falling in love with a particular tool before understanding their actual needs. Technology should solve business problems, not create new ones.
Involve the Right People Early: CLM implementation affects multiple departments. Getting their input during selection prevents adoption problems later.
Focus on Integration: The best CLM tool is useless if it doesn't play well with your existing tech stack. Prioritise vendors that integrate seamlessly with your current systems.
Plan for Change Management: Even the most intuitive CLM requires training and process changes. Factor this into your timeline and budget.
Measure Success: Define what success looks like before you start, then track those metrics after implementation to prove ROI.
Don't Chase Shiny Objects: Whether it's the latest AI feature or a compelling point solution, stay focused on solving your core business problems rather than being distracted by impressive but irrelevant capabilities.
Making Your CLM Selection Count
Choosing a CLM tool is one of the most impactful decisions you'll make for your legal function. Take the time to do it right. Map your people and processes first, build consensus with stakeholders, and evaluate vendors against your actual business needs rather than their marketing promises.
The extra time invested in proper selection pays dividends in implementation success, user adoption, and long-term value delivery. Your future self will thank you for taking a strategic approach rather than rushing into the first shiny tool that catches your eye.
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