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Corporate legal teams use contract lifecycle management (CLM) software to streamline how contracts are created, reviewed, executed, and managed over time.
These tools are designed to solve contract-specific challenges like slow approvals, lack of visibility, version control issues, and missed renewal deadlines.
But while CLM software can significantly improve contract workflows, it’s important to understand exactly what it does and what it doesn’t.
So, let’s define what CLM software is, how it differs from general contract management tools, and what legal teams should consider when deciding whether it’s the right solution (or just part of one).
What is CLM Software?
It’s designed to bring structure, automation, and visibility to the entire contract process by replacing manual tasks like email-based approvals, static templates, and shared drive storage.
The CLM software meaning is often confused with broader legal technology solutions, but it’s important to note: CLM is just about contracts.
CLM software doesn’t offer the functionality to manage other types of legal matters such as litigation, regulatory investigations, intellectual property filings, employment disputes, or compliance advisory work.
What Does CLM Software Do?
While different tools vary in complexity, CLM software generally allows teams to:
- Generate contracts using templates and pre-approved language
- Enable stakeholders to collaborate on contract drafts with version control, tracked changes, and comment features
- Route documents for review and approval through automated workflows
- Capture signatures via integrations with e-signature tools
- Store finalized contracts in a centralized, searchable repository
- Set automated alerts for upcoming renewals, expiration dates, or key contractual obligations
CLM Software vs. Contract Management Software
Although often used interchangeably, CLM software and contract management software aren’t always the same thing. Understanding the difference can help legal teams choose a solution that truly fits their needs.
💻 Contract Management Software Definition
A broad category of legal technology that includes any tool used to store, track, or organize contracts. This could be Checkbox, a document repository, or a spreadsheet.
📑 CLM Software Definition
A legal tool specifically designed to manage the contract lifecycle through automation, structured workflows, and integrated tools for drafting, approvals, and renewals.
Think of it this way: all CLM software is contract management software, but not all contract management software qualifies as CLM.
This is important to understand because some legal teams adopt CLM software expecting it to handle everything from intake to execution, but later realize that CLM primarily focuses on contracts.
For broader legal service delivery, including triage, compliance reviews, or litigation support, solutions such as matter management and workflow automation software like Checkbox may be required.
Key Takeaways
CLM software plays a valuable role in helping legal and business teams manage contracts more efficiently. It brings structure, automation, and visibility to what is often a fragmented and manual process.
But CLM is built specifically for contract-related workflows. If your legal team also handles a wide range of work outside of contracts, you may need more than what CLM software can offer.
Still exploring whether CLM software is the right solution? Book a demo to see how you can go beyond contract workflows by streamlining intake, automating legal processes, and gaining full visibility across all legal work.
Frequently Asked Questions
How does CLM software enhance contract compliance and risk management?
CLM software enforces the use of approved templates and clause libraries, reducing the risk of non-compliant terms. It also tracks obligations, deadlines, and approvals to prevent missed steps or unauthorized changes.
What are the key features differentiating specialized CLM solutions?
Specialized CLM solutions often offer advanced automation, AI-assisted clause management, configurable workflows, and deeper integrations with legal and business tools. These features go beyond basic storage and e-signature to support full lifecycle control.
In what ways can automation improve contract renewal processes?
Automation ensures key dates like renewals and expirations are never missed by triggering alerts, workflows, or renegotiation steps. This reduces revenue leakage and ensures timely decision-making.
How might future CLM tools evolve to support cross-functional teams better?
Future CLM tools are likely to offer deeper integrations with enterprise systems that offer more flexible no-code workflows (e.g., Checkbox). This will allow cross-functional teams to collaborate seamlessly without relying on legal to drive every step.
What role does data analytics play in optimizing contract performance?
Data analytics in CLM software helps track contract cycle times, approval bottlenecks, and renewal outcomes. These insights allow legal and business teams to identify inefficiencies and continuously improve processes.
How do legal teams decide if CLM software is enough for their needs?
Legal teams assess whether their work is primarily contract-focused or if they handle a wider range of legal matters. If intake, triage, and non-contract workflows are part of their daily workload, CLM alone may not be sufficient.
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