A First-Class Ticket to Success: Select a CLM That Takes You Places

Pack your bags. We’re taking a trip to an exotic locale: Contracts Management Island. That’s right: I’m going to give you an overview of the best way to select a CLM (Contract Lifecycle Management) tool and I’m going to liken it to one of my other favorite topics: planning a vacation. 

Yes, I did just admit that contract management is one of my favorite legal ops topics. And since summer is nearly here in New York City, vacation is very much on my mind.

Know Your Travel Companions

Just like planning a group vacation, when you start vetting potential CLM partners, the first step is understanding your requirements. Every traveler has must-haves, be it a window seat or extra legroom, the beach or the country, all-inclusive or off-the-beaten-path. Similarly, you will want to define the requirements for the products you are considering. If in-app editing or automated workflows are your must-haves, begin by discussing those to save everyone time. Here are a few considerations:

Contract volume: Are you managing a small number of contracts or thousands? Knowing the volume of existing and future contracts is important as it might affect the CLM provider’s fee structure.

Contract types: Are your contracts simple like NDAs, or complex commercial agreements? Different systems cater to different complexities, and contract type might also influence the provider’s fees.

Integration requirements: Ensure the CLM system integrates smoothly with your existing tech stack, much like making sure your travel buddies all get along.

Pre-sign or post-signature: Some CLMs really crush features like workflow automation, clause playbooks, and integrations with your existing tech stack. Other CLMs really shine when it comes to post-signature metadata extrapolation, a solid contract repository, and reports that razzle dazzle. Which features are most important to you? If it’s all of the above, be sure to mention that to your tour guide. 

Set Your Destination Goals 

Before you are wheels up, collate your contracts into one place – or at least have an idea of where they are. Like having a central travel itinerary, knowing where all your documents are helps streamline the entire implementation process. Technology cannot solve a lack of existing process; it’s best to define these before you write a check for a CLM. 

Further, have a clear idea on where you need your contract process to go – this will help you find the right tool for you. You don’t want to go out to the marketplace, find a tool that does “this or that,” and then make “this or that” your process. In an ideal world, you have a solid idea of what approvers you need, what financial thresholds you have, which contracts are in-scope for certain reviews, which contracts are out of scope, and who signs what. 

This crystalizes your search for a technology overlay onto existing processes that works and doesn’t force you to develop these concepts and get stakeholder buy-in on big changes when you are already working on the biggest change – finding a CLM.

A few solid examples:

Approval authority: Know who has the authority to make approvals and sign your contracts, similar to assigning tasks to different members of your travel group.

Consult user reviews: Much like consulting TikTok or TripAdvisor for travel tips, check out what other users have to say about their CLM experiences. Some systems are designed for specific industries, so be discerning when using customer referrals.

Is there an engineer in the house: Much like a tour guide on a safari, you will need someone to drive you through the tough terrain. Do you have a dedicated engineer who will be your tip-to-tail resource for implementation, including Application Programming Interfaces (API) connectivity with existing systems? If you don’t know who this person is, you will want to discuss with IT to ensure their roadmap can accommodate your need for them. Otherwise, you will end up paying for a third-party consultant and you may not have budgeted for this. 

Inspect the All-Inclusive Features of Each CLM 

At an all-inclusive resort you expect typical perks such as: gourmet dining options, spa treatments, security and privacy, and off-campus excursions. Similarly, there are several features you should expect to see in a modern-day CLM:

Contract templates: A CLM might support a range of templates and clause libraries to ensure consistency and compliance. These days it’s also to see out-of-the-box playbooks as a part of the offering to get you started. 

Workflow automation: Automated workflow based on logic you design, for contract creation, review, and approval.

E-signature integration: E-signature integration makes contract signing quick, secure, and efficient.

Negotiation and collaboration tools: A CLM should provide tools for tracking changes, version control, and multi-party collaboration (e.g. internal and external comments). 

Obligation and compliance management: A CLM might have features that track and manage contractual obligations to ensure compliance.

Search and contract repository: Advanced search capabilities in CLM can enable quick retrieval of contracts or specific clauses anytime.

Reporting and analytics: A CLM might offer dashboards and reporting tools for insights into contract performance and compliance.

Integration with other systems: A CLM should integrate via API with enterprise systems like Procurement and Client Relationship Management (CRM) software. Not all APIs are built the same so if this is an important aspect to you, it’s best to have your engineer dig into the how and why of their API. 

Security and access control: A CLM should offer robust security features and role-based access control.

AI and machine learning capabilities: A CLM might use AI and machine learning for contract analysis, metadata extrapolation, and playbook execution. 

Mobile access: Today’s CLM might offer mobile-friendly interfaces or dedicated apps for contract management on the go.

Know Before You Go

Before booking a vacation, you might visit a few places virtually or read firsthand accounts. Similarly, you should request demos and proofs of concept from CLM providers. A proof of concept might be a short amount of time, e.g. 3 months, and require a contract and also a fraction of the usual cost, but it can save you thousands or millions depending on scope and size of your project. Tests are highly recommended if you have the people and financial resources to test their product. 

Ensure Compatibility 

Make sure your chosen CLM integrates well with your existing tech stack — just like you would ensure that your travel plans sync with your fellow travelers’ preferences. Don’t select a CLM without robust security measures, which is similar to traveling without insurance. Ensure your CLM provider offers reliable support, much like having a local guide or travel assistance. Budget wisely, considering all costs involved, from implementation to ongoing maintenance, just like budgeting for a trip. 

Pitfalls to Avoid:

Ignoring feedback: Don’t neglect your team’s and stakeholder input, much like considering everyone’s preferences when planning a group trip.

Overlooking integration requirements: Ensure the new system integrates smoothly with your existing tech stack.

Underestimating training: Even the best system is useless if your team doesn’t know how to use it.

Focusing solely on cost: Don’t let price be the only deciding factor; sometimes you get what you pay for.

Neglecting compliance and security: This isn’t a vacation where you can afford to skip the fine print.

 Final Thoughts (a.k.a. Bon Voyage!)

So, it’s time to embark on this journey to select a CLM with confidence. Choosing the right tool isn’t just a smart move; it’s an adventure that will transform how you manage contracts and really impact your career. Some say a CLM implementation can make or break your career. In my own experience, I can say my four CLM implementations are certainly responsible for much of my career growth.

Say goodbye to contract chaos and hello to streamlined success. Now, go forth and plan to find the perfect CLM. While you’re at it, summer is almost here, use these tips to plan a vacation! Safe travels and happy contracting!