How Much Does Contract Management Software Cost?

The contract management software you choose impacts the entire organization—no pressure, right?

You want to use a tool that streamlines your workflow and solidifies the legal team as a business driver, but you don’t have an unlimited budget. So, you have to balance contract management software cost and ROI.

By the end of this guide, you’ll understand how contract management software pricing works and how to compare your options to make an informed choice.

When you begin evaluating contract management software pricing, the first thing to know is that there are two structures—flat rate and custom.

Flat rate pricing

Flat rate software pricing has a single fixed price or a set of price tiers. No matter who you are and what you need, you’ll have to choose between a predetermined mix of features and limits. Flat rate pricing is like buying a shirt at the store—you can pick the style, color, and size, but only from what the company has already created.

Flat rate pricing pros:

• You can quickly evaluate and compare prices without giving any of your details

Flat rate pricing cons:

• The plans don’t consider your unique needs and goals
• You might pay for features you don’t need or use
• There’s no guidance on what’s best for your situation

Custom pricing

On the other hand, custom software pricing has a product expert talk to you about your company, goals, and challenges to create a personalized price and implementation.

Let’s go back to the clothing example. Custom pricing is a bespoke tailor that shares suggestions on flattering designs while letting you pick the color you want. While your first instinct might be that custom software pricing is a luxury your team can’t afford, you may save money by not paying for features you don’t need right now.

Custom pricing pros:

• You only pay for what you need
• Build a relationship with the company to scale up, down, or sideways in the future
• Start smaller and only grow when you’re ready
• Get expert advice on what to use and how to have a successful implementation

Custom pricing cons:

• You need to talk to each company you consider to receive custom pricing

Get Your Guide to Understanding the Total Cost of Ownership for CLM

How much does contract management software cost? It depends. Pinning down the typical cost of contract management software is like telling someone how much a house costs—that varies widely based on location, size, and condition. Contract management software pricing is nuanced, too.

We wish we could give you a simple answer, but it would be a lie. Instead, we want to help you understand what impacts the price, so you know what to expect when you run your contract management software price comparison.

There are six factors that influence contract management software pricing, and having an idea of what you need for each category prepares you for the software buying process.

1. Number of users (a.k.a. “seats”)

Your number of users, also called ‘seats,’ indicates the size of your company or team. You can roughly assume that the more people use your contract software platform, the higher the price. That isn’t a fixed rule, though.

For example, some companies might offer a discount for bulk seats, like a contract Costco. Plus, seat pricing could vary based on a user’s access level. A contracts manager uses every feature and workflow, while a salesperson only needs to create a template business agreement, so their seats may come at a different price.

What companies will ask you to build your quote: 

• How many people are on your legal team?
• Which other departments will you collaborate with?
• How will other teams and users interact with the software?

2. Number of contracts and workflows

The number of contracts and workflows you set up also signals your company size. As your usage and data increase, so does your rate.

For example, a company with a single NDA will pay less than a comparably-sized team with an NDA, clickwrap, and an automated sales contract workflow.

What companies will ask you to build your quote: 

• What industry are you in?
• What contracts do you regularly use?
• What is your current contracting workflow?
• Do you mainly work with internal stakeholders, external signing parties, or both?
• What processes or metrics do you want to improve?

3. Integrations

Integrations with your contract software make your job easier and more accurate since information automatically translates between tools. For example, a Salesforce integration lets your sales team create, approve, and review contracts without leaving Salesforce. As a bonus, the easier it is for cross-functional teams to interact with your contracting platform, the more likely they are to use it.

Since integrations create value, they may cost extra, particularly for premium integrations. Still, a higher price for native integrations is usually worth it over manual data entry or setting up a custom connection with a tool like Zapier.

What companies will ask you to build your quote: 

• What tools does your team use currently?
• What apps does your company use across functions?

4. One-time fees

Let’s quickly detour from recurring price considerations to explore one-time fees. Your first contract software invoice could include fees for setup, migration, additional team training, extra consultation, or advanced support.

The costs that apply to you depend on the software you choose and how different your current setup is from your new tool. For example, a company that wants help migrating hundreds of legacy contracts to their new CLM may have more one-time fees than a small team at a new organization starting fresh.

What companies will ask you to build your quote:

• Do you currently use contract management software?
• How do you currently store and manage contracts?

5. Tools and features

Most contract management software have a collection of products like contract lifecycle management (CLM), repositories, workflows, and clickwrap. Typically, your rate increases as you use more features.

If you think back to flat rate vs. custom pricing, you’ll remember that a custom plan is helpful since you only pay for the features you need.

What companies will ask you to build your quote: 

• What are your contract management goals?
• Do you have any upcoming projects or changes?

6. Contract length

The last factor that impacts your contract software pricing has nothing to do with your team size, workload, or goals. The companies you consider may offer discounts for paying an annual upfront fee versus monthly billing. While opting for a single payment each year is a larger upfront investment, the equivalent per-month cost is less.

It’s time to turn the tables. Until now, this guide reviewed the things about your team that increase your contract software price. Now it’s your turn to analyze value-adds that effectively decrease your cost.

The lowest price tool, even for a one-to-one match of features, isn’t always the best choice. The top CLM platforms have these added benefits that increase your ROI without adding a line item to your software pricing quote.

Level of customer support provided

Thorough support helps you squeeze every ounce of ROI out of your contract management software. Ask contract software companies what they do to support teams as they implement new software and as they evolve.

Questions to ask the software company: 

• Will I have a dedicated account manager?
• What are the customer support channels and response times?

Ease of adoption

You can spend hours obsessing over the right CLM choice, but your hard work will be for nothing if nobody uses it. Look for a tool with an intuitive design that’s easy to learn and pleasant to use. Sandra Jadur, Associate Director of Contracts at Innovapptive, used enthusiasm and hands-on training to achieve a strong adoption rate from her sales team. “I got into sandbox mode and made all these fake contracts so they could see how to use it,” Sandra shared.

Questions to ask the software company:

• Is there assisted migration and onboarding?
• Is it a low-code implementation or do I need to pull IT time?

Customization

A minimalist plan that’s highly customizable can be a great fit for teams that want to prove their value with a new tool. For example, if you can customize an insights dashboard to support company goals you can communicate your impact and priorities with stakeholders to get buy-in for more investment.

Questions to ask the software company:

• What can I customize?
• Can I control access across roles and teams?

Community

A community provides inspiration, support, networking, and knowledge. Plus, sometimes it’s just nice to have like-minded people to talk to (or commiserate with). Networking is also a powerful career growth tool; Meredith Fuchs, General Counsel at Plaid, credits it as helping open doors.

Questions to ask the software company:

• Do you offer a community?
• How do you support the advancement of the legal industry?

Templates and resources

Templates, robust product education, and industry resources support your success and make your work easier. Plus, they’re a quick way to ensure everyone on your team works cohesively.

Questions to ask the software company:

• Do you have any templates to make getting started faster?
• What product education do you offer?

Security

You need to trust that your data is safe, and robust security measures at no extra cost are a big ROI bonus.

Questions to ask the software company:

• What are your security standards?
• Are higher standards only available at particular price levels?

AI

AI-supported features save time, which means contract management software is worth more with it. For example, L’Oreal uses AI tools like automatic clause detection and automatic redline suggestions to increase efficiency and create more time to dedicate to strategic, impactful work.

Questions to ask the software company:

• Do you have any AI-powered features?

CLM pricing can vary widely depending on several factors, including the vendor you choose, the features you need, the size of your organization, and your specific requirements. Here are some key considerations and things people should know about CLM pricing:

Customization

If your organization requires extensive customization to meet specific workflows or compliance requirements, you may incur additional costs. But if that’s the case, it’s important to choose a CLM provider that has the capability.

Scalability

Think about your organization’s future growth. Ensure that the chosen CLM solution can scale with your needs without incurring exorbitant costs as you expand. You might also want to avoid being locked into a contract with a limited services provider fi you’ll need to migrate your contracts to a more robust platform in the future.

Total Cost of Ownership (TCO)

Consider the long-term expenses associated with the CLM solution, including maintenance, updates, and ongoing support. A lower upfront cost may not necessarily mean a lower TCO. Poor user adoption or inaccurate data collection can also add to TCO.

Negotiation

CLM pricing is often negotiable. Don’t hesitate to engage in negotiations with vendors to secure a favorable deal that aligns with your organization’s needs and budget.

It’s crucial to conduct a thorough assessment of your requirements, obtain detailed quotes from multiple vendors, and consider the long-term implications of CLM pricing before making a decision. This will help you choose a solution that meets your needs while staying within your budget.

While companies create custom pricing just for you, you still have to decide if the investment is right for your team right now. Here are tips for how to choose CLM software when you need to compare price quotes:

1. Know what tools and outcomes you want beforehand, so you aren’t dazzled into paying for exciting features you rarely use
2. Check G2 reviews, explore their highest-rated features, and check if the CLM has any G2 awards
3. Read customer stories to see if they’ve helped companies achieve the results you want
4. Compare prices for the same factors, like the cost to add extra seats or contract limits
5. Ask companies about the process to adjust your plan as needed
6. Review ROI value-adds like AI and communities

Ironclad is a digital contract management tool that gives business and legal teams an easy-to-use platform to handle every aspect of the contract lifecycle. Teams use our AI-powered Repository, Clickwrap, API, and Workflow Designer to save time and uncover strategic insights.

Most importantly, teams that use Ironclad see measurable results. For example, Mastercard saved $450,000 in annual overhead costs with Ironclad, and the Texas Rangers managed 2,000+ contracts to support a $1.2 billion project.

Want to learn more? Get Ironclad pricing info.

How is contract software billed?

Contract management software falls into two price categories—flat rate and custom pricing. While flat rates seem enticingly straightforward, you may pay for features you don’t need. Custom pricing for contract management software is best because you can start where you are and grow over time.

How much does contract management software really cost?

Since many contract management software plans have custom pricing, there’s no one-size-fits-all estimate. Instead, you can learn what to expect when you run your contract management software price comparison to make an informed decision.

The factors that make up your contract management software cost include:

• The number of users and their access level
• How many contracts and workflows you’ll use
• Which integrations you need
• What features you want to access
• Your setup and/or migration process
• Contract length

How can I convince my boss that the cost of contract management software is worth it?

A CLM is a good investment because it increases efficiency, creates time for high-value work, and uncovers insights for strategic business decisions. If your boss is unsure about the cost of contract management software, it might be helpful to tell them about the value-adds that increase ROI without adding a line item on the invoice, like:

• Customer support that reduces the learning curve
• An intuitive platform that ensures everyone uses and enjoys the software
• Dashboard to track metrics that quantify your work and prove value
• Customization options to fit your goals and work
• Community support to learn from and network within
• Templates and resources to work quickly and effectively
• Data security
• AI-powered tools that save time and increase accuracy