Contract lifecycle management (CLM) has become a hot topic in the legal space; a must-have solution for CXOs looking to get a handle on their legal agreements.
The Covid-19 pandemic has ushered in the era of digital transformation, further solidifying the shift towards CLM technology as corporate legal departments face the challenge of managing contracts remotely, with a distributed peer network.
Vedika Mehera, an innovation advisor with Orrick Herrington & Sutcliffe, shares:
“(W)e have seen a lot of investment in the CLM space in the last few years as it has become a priority for legal departments. Covid seems to have just made it front and center and a much higher priority than before.”
Additionally, Gartner predicts that legal technology budgets will grow threefold by 2025 to support the massive increase in digital transformation and tech adoption in the industry. Moreover, more than 25% of legal tasks will be supported by some form of automation, reducing manual work for lawyers and empowering a renewed focus on higher-value and strategic initiatives.
Evidence shows CLM Adoption is Set to Make Significant Gains
Given the shift in legal automation, the adoption and implementation of contract management solutions are gaining significant ground. Contract management enables teams to streamline their day-to-day contract management processes to eliminate repetitive and manual workloads, optimize turnaround times, and manage overall business risk.
Seeing the growth opportunities in this sector, venture capital investors are infusing cash into a wide range of contract management tools. Four CLM providers secured nearly $70 million in investment in the second quarter of 2020, making contract management software among the top 10 legal tech investments. Moreover, the two of the big four accounting firms predict CLM solutions to play a key role in their expansion plans in the legal services market.
CLM is becoming one of the fastest-growing enterprise software categories, increasingly recognized as a universal, critical asset for businesses of all sizes, across all industries. The category now boasts of an impressive addressable market at over $20 billion, growing at a rate of over 35% year-over-year.
A Growing CLM Market Increases the Need for Contract Extraction and Migration Services
As the CLM market continues to grow rapidly, so does the need for legacy contract extraction and migration services. Corporate legal teams embracing CLM adoption need to ensure all the legacy contracts are properly loaded into the CLM to generate maximum value for their teams.
Contract extraction and migration entails a rigorous contract discovery process since legacy contracts are spread across a host of storage solutions such as the cloud (OneDrive, Dropbox, Google Drive), hard drives, and more. Once the contracts have been consolidated, one needs to sort them and classify them based on master and amendments, followed by meta-data extraction. This involves extracting key details from various types of contracts and migrating them onto the CLM. (Here is a detailed overview of the contract metadata and their unassailable role in building a CLM solution.)
Considering the level of detail required, this process is unsurprisingly a time-consuming and resource-intensive exercise for companies to follow in-house. Outsourcing contract management and data extraction to a reliable partner like Cenza can help alleviate this burden, allowing law companies to focus on high-value strategic work. We work closely with CLM providers to help their clients successfully migrate legacy contracts into their CLM platform with all the existing contract meta-data and documents.
We’ve also forged close partnerships with noteworthy CLM providers like Ironclad and ContractWorks. Cenza can assist CLM providers and their clients with CLM contract migration and implementation needs. Contact us today.