S1 E2-Part 1:
Why Do Enterprises Buy CLM?

Hi, I’m Gordon Thompson. Welcome back to another episode of the CLM Navigator Series.

Today, we’re going to talk about why enterprises buy CLM. Contracts sit at the intersection of risk, revenue, and your relationship between your customers and or your suppliers. Imagine this, when your procurement team needs to know whether or not a supplier has met milestones, they’ll need to look that up in a contract. When your sales team needs to start an expansion conversation, they’ll need to see what they’ve already sold and what’s stated in the contract. When legal needs to see if an existing deal complies with a new regulation, they’ll need to go back and look at the contract. That’s why we need to start thinking about contracts as the operating system for the enterprise.

But the reality is contracts are managed like just any other document in your organization. And that shows up everywhere. So for example, legal spends countless billable hours just trying to find contracts, because on average, contract data is spread across 24 different systems in large enterprises. 24.

Sales and procurement struggle to close deals fast, with some of the contracts taking 60, 90, even 120 days to go through a draft, negotiate, and sign cycle. When regulations change or audits raise red flags, teams are forced into massive search exercises, spending days, weeks, sometimes months figuring out which contracts will be affected and how.

It’s often in these moments that companies purchase CLM software reactively — by a single department to solve an immediate problem — rather than a platform for every team that works with contracts. Individually, these feel like operational efficiencies. Taken together, though, they add up to something much, much bigger. WCC estimates that poor contract management costs companies roughly 9% of their annual revenue. That’s huge.

Now let’s zoom in and understand why different departments purchase CLM.

Legal

First, let’s understand why legal buys CLM. For legal teams, risk is a key motivator, but it’s not the only one. Legal teams are expected to author complex agreements like MSAs, SOWs, using the right language in the past precedents, by enforcing playbooks and ensuring every department geography follows the same standards. They’re also under pressure to shorten time to contract, accelerating reviews, approvals, and execution, while still maintaining consistency and compliance. At the same time, they need to identify and mitigate risk early, spotting missing clauses, deviations, and issues before they turn into problems. Finally, legal is responsible for visibility, helping the business understand exposure to risk, both before contracts are signed and long after they’re executed. In other words, legal isn’t just about managing risk — they’re enabling the business to move faster and with confidence.

Procurement

For procurement teams, the goal is simple. Get contracts done faster. Get better outcomes from them. Procurement teams need to collaborate closely across legal, finance, delivery, and other stakeholders, so deals don’t stall and contract terms actually support how business buys, delivers, and pays. Procurement teams are under constant pressure to negotiate better deals, using historical context on pricing, scope, and past outcomes to improve leverage and drive savings. While at the same time, procurement needs clear visibility into risk, renewals, supplier performance, and delivery obligations across active and past contracts. Critically, procurement is accountable for realizing value after the deal is signed — tracking obligations, service levels, invoices, reducing disputes, and leakage. In other words, procurement isn’t just focused on signing faster — they’re focused on making sure contracts deliver what was negotiated.