The Questions You Need to Ask When Evaluating CLM Vendors

Given the sensitive nature of contract data, evaluating CLM vendors regarding data privacy and security is crucial to prevent potential misuse and ensure compliance with internal governance policies, as reported in a blog post by Evisort. 

Additionally, the prevalence of “AI washing” (the practice of companies making false, misleading, or exaggerated statements about how they’re using or developing artificial intelligence systems) underscores the importance of verifying the actual capabilities of AI solutions before any investment.

Key elements to consider when evaluating CLM vendors include:

1. Company background and expertise: Assess the vendor’s longevity, legal tech expertise, and AI capabilities to gauge reliability and understanding of industry complexities.
2. Product features and capabilities: Evaluate the software’s ability to address your organization’s specific business and legal challenges, scalability, and customization options.
3. Security and compliance standards: Non-negotiable aspects include cybersecurity measures, data protection protocols, and adherence to industry compliance standards such as ISO 27001 and 27701.
4. Integration with current systems: Seamless integration with existing software and databases is essential to avoid disruptions.
5. Customer support and training: Post-deployment support and availability of training materials are vital for efficient product adoption.
6. Pricing and payment structure: Organizations should seek clarity on upfront costs, recurring payments, and potential hidden fees.
7. Implementation timeline and process: A clear implementation timeline outlining responsibilities for each phase ensures seamless integration and activation.
8. Post-implementation review: Regular performance assessments against initial objectives are necessary to measure ongoing value and identify areas for improvement. These should be within the first month and quarterly or biannually to measure continuous improvement.

By thoroughly evaluating these aspects, organizations can make informed decisions and select CLM vendors that align with their specific needs, ensuring the effective utilization of contract AI solutions while mitigating potential risks.