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Your CLM is now a true enterprise system
Contract lifecycle management (CLM) systems may have started as eSignature tools bolted to simple digital repositories, but today they’re core enterprise platforms. In 2025, driven by advances in AI automation, CLM systems reached the tipping point. New CLM capabilities made these systems essential for revenue assurance, compliance visibility, and operational agility. Now, CLMs operate alongside CRM, ERP, and procurement systems as enterprise-critical infrastructure, turning contracts into sources of insight.
These advancements allow contracting teams to spend less time on manual contract management and more on delivering strategic insights. But as technology shifts, business practices should shift too. To get the most out of new functionality and to maintain efficiency, we recommend three shifts in how you manage your CLM:
1. Leverage AI-driven automation
As artificial intelligence redefines the role of contract lifecycle management systems, your company can benefit. Large language models (LLMs) are turning static contracts into intelligent, searchable assets that enhance decision-making and surface insights previously buried in unstructured text. Meanwhile, agentic AI continues to emerge as a powerful workflow accelerator. The broader legal industry is rapidly adopting AI, with over 70% of firms increasing investment, and global legal AI spending surpassing $2 billion in 2025. Rising client expectations for speed, transparency, and technology-driven service are pushing legal teams to adopt AI-enhanced research, drafting, and workflow tools. At the same time, law firm adoption of AI grew 315% from 2023 to 2024, and corporate counsel increasingly expect their firms to use cutting-edge technology—prompting shifts in talent strategies and legal education.
To get started, ensure you have tools for automated metadata extraction, clause libraries, risk scoring, and enterprise system integrations. Once your data is in good shape, you can explore agents capable of initiating tasks, creating draft contracts with templated/standardized language, proposing redlines, and routing approvals autonomously. That said, you can’t turn your entire tech stack over to AI just yet. Lengthy and complex legal language still demands human oversight to mitigate strategic and compliance risks. Critically, AI can’t be held accountable for outcomes, so human governance of both AI systems and the data they use remains mandatory.
The benefits are real. When implemented effectively, AI delivers faster deal velocity, improved risk visibility, deeper enterprise integration, and the foundation for proactive, automated contract management. Organizations that pair AI-driven efficiency with human legal expertise will be best positioned to capture strategic value and stay competitive as AI continues to reshape the legal and contracting landscape. AI-powered CLM also strengthens outcomes across the business, including shorter cycle times, better obligation fulfillment, and improved renewal management.
2. Embrace simplicity over complexity
In the early 2020s, the COVID-19 pandemic aligned with a surge in new contracting systems, disrupting decades-old contracting processes at numerous companies. During this time, companies held extensive, month-long discovery sessions with many stakeholders, resulting in CLMs with complex workflows and high conditionality. Those first-time CLM customers, many of whom are approaching their first contract renewal, are now seeing the effects: disappointing ROI and cumbersome change management processes.
A simplified CLM focused on clean data, standardized storage, and clear contract status visibility can help. Organizations consistently see higher adoption and faster value realization when the system is intuitive, streamlined, and aligned to users’ daily workflows and processes. A simplicity-first approach also reduces change fatigue by focusing on the most common contract types, fields, and approval paths. This makes the system easier for legal, procurement, sales, and business users to embrace without the large learning curve. Simple implementations also avoid the heavy maintenance burdens and technical debt that accompany overly customized configurations, keeping the platform agile and easier for customers to upgrade over time.
Importantly, simplicity accelerates time-to-value. By launching with straightforward workflows and core capabilities, organizations achieve early wins, such as faster drafting, improved visibility, and reduced manual work, that build confidence and pave the way for future enhancements. This foundation then scales naturally as the business matures, allowing advanced features, automation, integrations, and AI-driven capabilities to be introduced at the right pace.
Ultimately, simplicity is a strategic choice, not a limitation. By prioritizing usability and clarity upfront, organizations secure higher adoption, lower risk, and a stronger long-term return on their CLM investment.
3. Explore consumption-based spending
With “democratized AI” providing access to AI across all personas in the workplace, many CLM vendors are shifting from a traditional license-based model to a consumption model. A consumption-based CLM model directly aligns tech spend with business value by tying costs to feature usage and actual contract activity within the platform. This eliminates unused license waste and makes ROI transparent, measurable, and defensible.
With this shift, the discussion of ROI comes into the mix, along with how best to quantify usage and adoption to justify your CLM spend. Below are some KPIs clients frequently use as they define or validate their business case for a CLM system.
Quantifiable Financial Impact
The quantifiable benefits of consumption-based spending on your CLM are essentially the benefits of your CLM, expanded. Everyone in your business who deals with contracts can have every tool they need to improve their workflows. This leads to benefits like:
- Faster revenue recognition. Automated workflows shorten contract cycle times for the entire team, enabling deals to close and revenue to be recognized sooner. Value comes from accelerated cash flow and higher quarterly throughput.
- Lower legal and operational costs. Too many members of your legal, sales, and procurement teams spend countless hours on formulaic review processes, and too many companies spend too much on outside counsel doing the same. As usage-based pricing allows more teams to use standardized templates, AI-driven review, and automated steps, productivity increases across the board.
- Compliance protection, cost, and revenue leakage avoidance. Visibility into obligations, renewals, and term risks prevents financial leakage. Greater usage of systems will help companies avoid penalties, capture renewals, and reduce risk exposure. Risk mitigation also grows with contract volume, not fixed license fees.
- Higher productivity across functions. Sales, Legal, and Procurement spend less time on manual searches, redlines, and approvals. This means faster workflows without additional headcount.
- Standardization reduces negotiation. Consistent clauses cut back and forth with counterparties. That means shorter cycles and fewer escalations.
Strategic Value
Companies will also see less quantifiable but no less important benefits:
- Your CLM scales with business growth. Consumption pricing flexes with contracting volume, M&A, and seasonal demand. This provides cost elasticity with no stranded licenses.
- Enterprise insights from contract data. Analytics improve forecasting, commercial discipline, and risk management. Value: Better decision-making with no incremental staffing.
In a consumption-based model, you can pay only when contracts are executed or automated, giving you confidence that every dollar spent on the system is actually contributing to value. Costs directly correlate with revenue, savings, and risk reduction, with no underutilized licenses or overhead consuming resources. It also makes budgeting simpler to justify: any increase in CLM spend will be justified by the accompanying increase in system use.
Be prepared to transform your CLM
2026 promises to be a key turning point in the CLM and legal tech space. As companies need greater value from their CLM systems, AI systems are delivering. As a result, many longstanding product leaders are being stretched, while new entrants are gaining greater market share. Companies need a different approach.
Spaulding Ridge helps organizations build contracting systems that work as part of a connected enterprise environment. Let’s start building your smart contracting system—one that connects data, people, and strategy to produce measurable results.