How to Choose the Best Contract Management Software for You
A contract lifecycle management (CLM) tool can make legal teams more agile and efficient, so you want to choose a solution that works for your entire organization.
However, researching and buying contract management software for the first time has some unique steps you may not have experienced before. This guide reviews the software buying process with tips from pros, plus insight on the criteria you should use to compare CLM options.
Stages of the contract management software buying process
Just like a contract passes between different stakeholders with unique roles and perspectives, the software buying process has a few phases and players. First-time software buyers should know it pays to do their due diligence.
Many first-time buyers think buying CLM is like buying a TV from a rep at Best Buy, where they show up to the store, share a few things about why they want the TV, and then the rep will recommend a few models and share a few key features, and then you take it home to make it work.
Instead, buying contract management software should be much more like buying a car or a home; it’s a long-term investment that will become a representation of you to your peers at the company – not to mention to your clients or other counterparties. The more information you bring to the table, the better you can assess if the vendor sales team is listening to your needs and if the solution will deliver on your expectations.
With that in mind, let’s review what to expect as you begin evaluating CLM software.
The consideration process begins before you review a single contract management software option. Talking to internal stakeholders to understand the impact of a CLM is where you should start.
What you should be doing now:
Ask your sales team:
- How do reps feel about the time it takes to get a deal signed or negotiated?
- How does your team find our NDA process?
- Would your team be excited to change the contract process if it could save them 10+ hours in the quarter?
Ask your IT leadership:
- Have you ever thought about finding a tool to help organize company contracts?
- How does IT feel about low code solutions?
Ask your legal team:
- What steps do you want to keep from your current process?
- What steps do you want to improve or automate?
Ask your finance team:
- How does contracting impact your work and forecasting?
How to move forward: We recommend creating a clear thesis on the impact of a CLM. For example: “The perfect CLM makes sales happy because it will save XXX hours and finance will be happy because we will be able to save $XXX amount of dollars on future renewals.”
When you know that contract management software could help your organization, it’s time to start looking at your options. We’ll review how exactly to compare CLM companies a little further down, but for now, all you need to know is what you’ll do independent research at this stage.
What you should be doing now:
- Decide what’s important to you. What are your goals for a CLM? What do you need the most help with? Clarity on your preferences will help you sort through features later.
- Check out review sites. Software review websites like G2 and Gartner Peer Insights provide a third-party perspective of your options.
- Review CLM websites. Read through each CLM’s product pages, help documents, and customer stories.
- Talk to peers. Legal communities and events allow you to ask peers about their experiences with CLMs.
How to move forward: After reviewing top contract management software lists and reviews, choose two or three options to learn more about.
Once you have a few top contenders, it’s time to explore them beyond the sales pages. We recommend taking your time at this stage and asking vendors to show you how features work together end-to-end. Here’s some sage advice from one of our own onboarding experts:
“Generally, being able to pick the vendor after one or two product demos will not set the team up for a successful project. Use your first demo with a company to check off the box for the core functionality of platforms. Then, it’s wise to bring two or three vendors into a ‘Proof of Concept’ step. Don’t feel guilty about pressuring the vendors to come to the table with a near to ready ‘Proof of Concept’ demo as a final step to ensure that the solution is actually going to check the boxes of your thesis.“
What you should be doing now:
- Book a demo. A software demo is your chance to see the product in action with a tour. Your first demo will offer a high-level view of features, but don’t be afraid to ask vendors to show how you would use features together with your process.
- Have a discovery call. Companies may also have the option of discussing your organization and goals with a team member who will help you decide if their product can help. Bring your thesis from the first step to the call.
- Involve stakeholders. At this stage, we recommend bringing in a few key stakeholders. Key stakeholders, primary users, and power users should be present for the first demo. Later stage “Proof of Concept” demos should also include business stakeholders.
What companies will be doing: Depending on whether the company is self-service vs. hands-on, a customer success or sales team member may contact you to help you make a decision.
How to move forward: Choose a contract management platform with a free trial.
Typically, contract management tools offer a free trial of at least two weeks where you can use the product. This stage empowers you to try the tool on for size before deciding to commit to a sale.
What you should be doing now:
- Put your data in ASAP. CLMs need data, so upload previous agreements and begin signing new ones in the app as soon as possible.
- Test the contracting process from beginning to end. Try to run at least one contract through the CLM before your free trial is over so you can test as many features as possible.
- Bring a team member. You won’t use your contract management software in a vacuum, so aim to get at least one other set of eyes on it to ensure it’s easy for everyone to use.
What companies will be doing: During your free trial, your contract management software company should be a partner in your success. In-app onboarding and product tips help you navigate the platform, and they may share additional documentation to answer your questions. You could also have an assigned representative to help you get started.
How to move forward: If the software is easy to use and has the features you’re looking for, you can move forward with buying it.
What you should be doing now:
- Choose a plan that fits your business needs. A CLM company may have a mix of preset plans, based on things like number of seats or available features, or develop a custom plan.
- Create an implementation plan. Figuring out what you need to migrate to your new contract management system and who will be involved helps you get started faster once you complete the purchase. A rule of thumb is that the expected time to implement will mirror the evaluation process.
- Coordinating with your procurement team. You’ll sign a monthly or annual contract with the contract management software company.
What companies will be doing: Your sales or customer rep may work with you to design a plan for your needs. They may also offer a smart import or data migration service.
How to move forward: A successful CLM implementation takes a little planning and forethought, but we’ve mapped out the process here.
What to look for in a contract management tool
Now that you have a sense of the CLM-buying process, here are the factors we recommend using to evaluate your options.
Mary O’Carroll, the Chief Community Officer at Ironclad and former Google Director of Legal Ops, said, “If the software requires training, it’s dead. People need to be able to see it for the first time, and their reaction should immediately be, ‘Oh, I get it. It works how I expect it to.’”
As you watch demos and use free trials, pay attention to how intuitive the design is.
Heather Quinn, a Senior Contracts Administrator at Cofense, also shared that their team moved away from a previous CLM because it was hard to use. “For example, getting a contract template configured was very time-consuming. You had to use the design function and do XYZ to get that tab working properly. If you made a mistake, it was very hard to fix,” she said.
Continuing from Heather Quinn’s point about editing mistakes and contracts, your contract management software must be customizable. Sure, most organizations use an NDA. But does the tool make it easy to edit details throughout the creation and signing process? What about support for negotiable and non-negotiable contracts?
Your work will be easier and more organized if the CLM lets you:
- Create different contract templates
- Put parameters on which team members can complete what actions
- Send negotiable and non-negotiable contracts
You likely already have some tools and work processes in place, and it’s helpful if your contract management software plays nicely with those. Built-in integrations with your other software save time and reduce errors from shuffling information.
The tools you might want to connect with include:
- Customer relationship management (CRM)
- Cloud storage
- Business spend management (BSM)
- Data visualization
A workflow is the series of steps a contract passes through. Without contract management software, you might do these steps manually, like creating a new Word Document from a template on your desktop and emailing it to the signee.
Automated workflows are what transform a CLM from a simple e-signature tool to an ROI-boosting product. Look for a contract management tool that lets you set how a contract should move between stakeholders at various times so you can eliminate back-and-forth emailing. Oh, and you should be able to do that without writing any code or asking your dev team for help.
Here’s an example workflow that your CLM should be able to manage:
- Upload a contract template from a Word Doc
- Highlight the info needed to complete the contract
- Create contract conditions, like adding payment clauses or special approvals for contracts over a certain dollar amount
- Designate what roles need to sign the contract
After you set up a workflow, it should be able to run independently.
We’re going to get futuristic for a moment; you can use AI in the contract cycle. While AI-based contract management software is a hot topic (that sometimes draws skepticism in the legal community), it’s a real value driver in some platforms.
Mark Kahn, General Counsel and VP of Policy at Segment, says that AI can impact legal teams most in terms of repetitive work. He shared, “I think most lawyers – and I’m going to generalize a bit here – would rather focus their time on the higher value deals and the more strategic work. AI can automate and reduce routine work so that lawyers can do what they enjoy and excel at. I think that’s a realistic expectation for AI.”
Notice how he said “realistic” expectations of AI. As it stands, AI won’t do your job for you, and you should be skeptical of CLMs that oversell that.
What AI can help you do is upload files, tag fields, and analyze details of a contract like:
- And more
This AI data extraction and text search ability lets you review and compare contracts without opening 100 documents on your desktop.
A digital filing cabinet is a small step up from old-school paper format, but could you create a summary of your upcoming renewals in the next ten minutes? Does cloud storage track for purchase obligations? Likely not.
A CLM tool with a robust contract repository gives you unparalleled clarity into your agreements through capabilities like:
- Quickly finding procurement agreement details to stay compliant
- Getting alerts for upcoming renewals, so you don’t get locked into a contract you don’t want
- Comparing details across agreements to adjust your strategy and templates moving forward
- Giving the sales team information about the typical timeline of a deal
Contract management has a lot of moving parts, especially as your volume increases. Besides the features we’ve already reviewed, you need to look for a CLM that will be a partner in your success. Digital contracting is an exciting and high-potential place – is your contract management software at the cutting edge and a good partner to grow with?
Look for a company that provides:
- Useful and updated help docs
- Original research
- Individualized support and advice
- Thought leadership
Compare contract management reviews
Naturally, we believe Ironclad is the best contract management software for most organizations, but you don’t have to take our word for it. The information below was culled from several popular product review websites such as G2 and Capterra.
DocuSign is well-known as the forerunner in the eSignature space, but it falls short when it comes to holistic contract management. Users report that implementation takes months, leading to lack of adoption. Teams need heavy training before they’re able to begin using the tool for contract lifecycle management, and it’s difficult to create and update workflows without help from support.
LinkSquares was born as a way to store and find contracts, and it’s what they do best! But as they work backwards to fill in missing steps in their contract processes, user experience suffers. And while it does use artificial intelligence for the repository, other features still require more manual input. Documents can’t be edited within the platform and approvals and signatures take extra steps, so it doesn’t save as much time and effort as possible.
Evisort’s AI definitely improves part of the contracting process, which is great if you only need a tool for “scanning and analyzing” contracts. But if you want want-to-end contract management software that includes drafting, negotiating, approving, and reporting, you’ll need a more robust platform, and one that is built to make your life easier rather than to create AI for the sake of AI. Most companies just don’t have the time and huge volumes of data it takes to “train” this system.
Conga has been around for years, which should be a good thing, right? But, according to users, this legacy contract management tool is stuck in the past with code-based workflows, bugs, and failed implementations. Outdated contract management systems can’t keep up with the pace of business today.
Word on the street is Icertis makes it difficult to get buy-in from legal, sales, and procurement. Adoption is low due to lengthy implementation, not to mention the need for expensive consultations. Just learning the basics takes ten hours of training at minimum, so teams revert back to their old, inefficient ways of managing contracts.
How to get buy-in for your software purchase
You may be excited about the opportunities that a CLM represents, but you might still need to get stakeholders on the same page. Here are tips for championing change at your organization.
Build the business case for a CLM
Contract management software saves time, but its impact goes far beyond that.
CLMs help organizations:
- Leverage talent to their fullest capabilities by automating repetitive tasks and prioritizing strategic work
- Cut contracting costs
- Review past contracts to make better deals in the future
- Boost sales through easy online contracts
- Reduce errors and prevent contracts from getting overlooked in inboxes
- Increase cross-team collaboration
- Adapt processes and amend contracts quickly
Here are some of the most common objections that product champions may face:
“It will take up too much IT time.”
In some cases, CLMs are low-code options that don’t require much effort from the IT team. Choosing one of those options should satisfy your tech department, especially if you include them when scheduling a demo.
“Setting it up end-to-end is too much work.”
You don’t need to start at the end; many companies begin with easy wins (like getting existing contracts into a smart repository) and expand the project to high-value use cases when the business is ready to take on that more strategic project.
“Contract management software is too expensive.”
ROI on a good CLM can pay for itself in six months to a year.
CLM evaluation is a collaboration
Choosing contract management software that will work for your entire organization is a team sport. If you have questions about evaluating, buying, or implementing a CLM, don’t hesitate to get in touch with our contract management specialists.