The contract lifecycle management (CLM) process

Contract Lifecycle Management (CLM) is a process that encompasses multiple key stages of the contract lifecycle. The core goal of CLM is to ensure that contracts are managed in the most efficient way that maximises value, risk and ensures legal compliance.

CLM software brings consistency to contracting processes while speeding up the contract lifecycle. The software automates legal team’s manual tasks while empowering non-legal users to manage their contracts, without legal intervention.

Read on to learn who is involved in the CLM process, the contract lifecycle stages and what to consider getting started on your CLM journey.
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Why do businesses use CLM processes?

Businesses adopt CLM processes to overcome contract challenges they face across the business. From contract visibility issues, to slow manual tasks, to communication gaps between teams.

Without a centralised system that provides full visibility of all contracts, businesses risk missing deadlines which can lead to unwanted renewals and compliance issues. Inefficient contract processes create bottlenecks that delay contract cycles. While poor communication between legal and commercial teams can slow revenue generation and business growth.
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Who uses CLM processes?

Contract processes impact the entire business, but the tasks are often handled solely by the legal team.

To address this challenge, many businesses implement CLM software, which allows various departments to participate more actively in the contract process – often without needing the legal team's direct involvement.

For CLM processes to succeed, it's essential to gain buy-in from the entire business, even if not every area of the business is involved in all six stages of the CLM process.
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The 6 stages of contract lifecycle management process

1. Creation

Contract creation, also known as contract authoring, drafting or generation, is the first stage in the CLM process.

In the contract creation stage, parties collate the necessary information and documents to establish the terms and conditions, clauses and key dates for the new agreement. To save time, businesses can use a pre-approved set of templates, or a clause library, to make contract creation a less manual task.

When using CLM software for contract creation, pre-approved templates and commonly used clauses can be presented in an optimal way to make the creation process a quick task.

How you create the contract can vary on your chosen CLM solution. Summize has a decentralised approach to CLM, meaning your entire business can create contracts using your familiar business tools.

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Using the likes of Outlook, Teams, HubSpot, Salesforce or Slack, both legal and non-legal users can create contracts in minutes, from their library of pre-approved legal templates and content.
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2. Negotiation

After the creation stage, parties engage in negotiations to agree on the terms and conditions. This back-and-forth process often involves manual edits, redlining and suggested amendments, typically in Microsoft Word. This stage can be the most time-consuming and can create bottlenecks in the contract-cycle.

To speed-up negotiations, the best CLM software will include features such as AI-powered contract reviews and AI redlining. Such features reduce manual contract reviews and redlining tasks, making the process faster and more efficient.

By implementing a CLM solution, the Digital World Class Matrix™ report revealed these companies can achieve 45% in operational efficiency gains in the negotiation and supplier contract creation process.

Summize’s AI contract review works directly in Microsoft Word and cuts up to 85% of manual review time. The functionality highlights the contract’s key information and alerts you of any red flags.

Combined with Summize's AI Redlining, which redlines your contract and suggests missing clauses and corrections, legal teams can not only reduce their time-consuming manual review tasks, but they can accelerate the contract negotiation stage of the contract lifecycle.
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3. Approval

The approval stage is when parties legally agree. Once everyone is happy, the contract receiver signs the contract.

Within contract management workflows, the signing process often involves electronic signature tools. The best CLM software integrates with popular e-signature tools such as Adobe Sign, DocuSign and Oneflow, so there's no need to download contracts, upload new versions or re-save documents. Everything is automatically synchronised between the e-signature tool and your CLM repository.
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4. Execution

After signing, the contract becomes legally binding, and parties must adhere to the agreed-upon terms until the contract’s renewal or termination date.
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5. Management and renewal

Once a contract has been executed it is then managed and stored. CLM solutions often provide a secure and central repository, making it easy to find any contract.

Summize’s repository goes even further. Simply search for any term, clause or renewal date across all your contracts, and see the results in a clear, organised list.

Summize has allowed us to have a cleaner contract repository, better handling of supplier renewals contracts, better ability to pull data on legal risks and obligations in aggregate. Rosie Hawkridge, Legal Counsel at Littlefish.

And if you need to track a contract’s renewal or termination date? Summize’s CLM automatically extracts a contract’s key dates and syncs them to your Outlook or Gmail calendar, ensuring you never miss a contract termination or renewal date.
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6. Reporting and analytics

Reporting and analytics, also known as contract auditing, is a vital part of the contract management process, often overlooked when first reviewing the best CLM software.

Using AI, businesses can use the reporting stage of the CLM process to extract relevant data from their contracts to spot trends and key insights. CLMs powered by AI, just like Summize, enable businesses to dive into their contract data to spot trends, key insights and allows you to set and track KPIs.
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Starting your CLM process

Getting started with a CLM process begins when choosing your CLM provider. As there are many CLM solutions on the market, it can be challenging to understand which one is right for your business.

Take a look at the following features and functionality to consider:

• Integrations: The software should embed contact workflows into your existing tech stack to create a zero-change approach to CLM and to enable self-serve approach to stages in the CLM such as creation. Can your sales teams create contracts straight from HubSpot, Outlook, Teams or Slack? Can your legal team continue to review and redline in Word, just like they’re used to? And does your CLM provider integrate with well-known and secure e-signature tools?
• Artificial Intelligence (AI): A leading CLM will utilise AI across the contract lifecycle, from review to redlining to analysis, all to speed up stages in the CLM and automatically extract contractual information and data, minimising the need for human intervention.
• Rich data: A CLM tool should surface hidden data, allowing you to improve your decision-making with data-rich reports and analytics and key dates.
• Central Repository: It should offer a central repository for your agreements and related files accessible by a simple search, making contracts accessible to business stakeholders.
• Implementation: Your contract management process should be up and running in no time. Therefore, consider how long the implementation process is, and if your CLM provider prioritises your use cases to get you started sooner rather than later. Explore our CLM implementation best practices to discover the best approach.

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Choosing Summize for your CLM process

Summize’s integrated approach, present throughout all the stages of the CLM process, creates a more seamless user experience, ultimately maximising CLM adoption. This approach - integrated into tools including Salesforce, HubSpot, Outlook, Jira and Teams – is designed for the entire business to facilitate collaboration and to accelerate contract cycles.

Download our datasheet for a clear overview of the Summize decentralised approach to CLM.