What Is Contract Lifecycle Management (CLM)?

If you’ve ever chased a missing signature, dug through inboxes for a “final” PDF, or spotted an auto-renewal clause two days too late, you’ve felt the pain that Contract Lifecycle Management (CLM) was designed to eliminate. Once seen as a back-office legal process, CLM has now become a mission-critical function across entire organisations.

The global CLM software market was valued at over US $1.1 billion in 2024 and is projected to grow at nearly 13% CAGR through 2034. As companies embrace digital transformation and AI, contracts are no longer static file, they’re structured, analysable business assets.

This guide explores the full picture of CLM: what it is, how it works, why it matters more than ever in 2025, and how the right CLM tool can transform contract management into a driver of growth and compliance.

Contract Lifecycle Management (CLM) is the strategic process of managing a contract’s entire lifespan, from the initial request and drafting, through negotiation and signature, to the ongoing management of obligations, compliance, and renewal.

While traditional definitions focus heavily on the legal workflow of creating the document, modern CLM places equal weight on the business value of executing the agreement.

True CLM turns static legal documents into dynamic business assets. It ensures that the promises made during negotiation are actually delivered after the signature.

Why CLM Software Is Essential

In today’s regulatory and operational climate, contracts are both strategic assets and compliance risks. Frameworks such as GDPR, HIPAA, and financial standards like ASC 606 and IFRS 15 make contract language a key focus for audits.

According to the DocuSign 2025 Trends Report, more than half of corporate legal departments now use CLM software. Two major drivers explain the surge. Digital transformation initiatives are reframing contracts as data sources rather than static PDFs. At the same time, advances in AI allow unstructured text to be converted into searchable, analysable dataset, a development that EY calls “a fast-track to contract intelligence.”

Without a CLM strategy, contracts are simply “digital paper” stored in emails or shared drives. This leads to:

Value Leakage: Companies lose an average of 9% of annual revenue due to poor contract management (e.g., missed volume discounts, uncollected penalties, auto-renewing bad services).
Slow Turnaround: Manual drafting and searching for old clauses slows down sales cycles and procurement onboarding.
Invisible Risk: If you cannot instantly search your contracts for a specific liability clause, your organization is exposed to regulatory and financial risk.

The 5 Phases of the Contract Lifecycle

While every organization has a slightly different workflow, the lifecycle is universally divided into three distinct stages.

Contract Lifecycle Management is more than a document process, it is a governed framework that ensures contracts are created, executed, and maintained with visibility and control. While different organisations define the stages slightly differently, the CLM process typically follows five core phases:

1. Initiation

This is where the contract journey begins. A business need is identified, such as onboarding a supplier, executing a partnership, or renewing an agreement — and the relevant parties prepare to draft a contract. This phase includes intake, requirements gathering, and identifying key stakeholders and terms.

Key objectives: clarity of purpose, early risk identification, and standardisation of contract types.

2. Authoring & Negotiation

Contract drafts are created using approved templates, often with pre-approved clauses and fallback options. This phase may involve multiple rounds of internal and external negotiation. Version control, clause libraries, and negotiation tracking are key to ensuring speed without sacrificing compliance.

Key objectives: accelerate time-to-contract while protecting risk positions and compliance standards.

3. Approval & Execution

Once the terms are finalised, the contract moves through internal approval workflows and is signed by all parties. Modern CLM systems integrate with e-signature platforms to speed up execution and enforce policy-based sign-off rules.

Key objectives: enforce governance, reduce cycle times, and maintain audit-ready execution records.

4. Post-Signature Management

This is where most contractual risk and value lives, yet it is often the most neglected phase. After execution, contracts must be actively monitored to ensure obligations are met, renewals are handled strategically, and changes are governed through formal variation controls. Structured metadata and automated alerts reduce the chance of revenue leakage or missed compliance milestones.

Key objectives: maintain visibility, reduce manual tracking, and ensure obligations are fulfilled.

5. Renewal & Closeout

As contracts reach their end, they must be reviewed for renewal, renegotiation, or closeout. Historical performance, compliance status, and risk exposure all inform this decision. Without proper CLM processes, contracts often auto-renew without scrutiny, creating unnecessary spend or regulatory exposure.

Key objectives: make renewal decisions proactively, close out contracts cleanly, and capture lessons learned.

Why the Real Risk Lies Post-Signature

Most organizations optimize for the speed of the signature but ignore the cost of the silence that follows. When a contract is signed and simply filed away, it enters a “Repository Graveyard”, a passive archive where obligations are forgotten and value evaporates.

The impact is measurable. Research from World Commerce & Contracting reveals that the average enterprise leaks 9% of annual revenue simply by failing to manage the agreement after the deal is closed.

This capital is lost to the Four Silent Killers:
- Missed Renewals: Auto-renewing unwanted services because the notice date was buried in a PDF.
- Unclaimed Penalties: Paying full price for vendors who missed their SLAs or performance targets.
- Regulatory Exposure: Failing to track compliance mandates that evolve over the life of the deal.
- Price Creep: Overlooking subtle rate increases that exceed agreed-upon inflation caps.
Effective CLM bridges this gap, ensuring that what was negotiated is exactly what is delivered.

The Challenges of Contract Lifecycle Management

While contracts are essential to how organisations operate, managing them across their lifecycle presents a number of persistent challenges, especially in complex or regulated environments. These challenges are often hidden until they create financial, operational, or compliance issues.

1. Fragmentation of Contract Data

Contracts are often stored across multiple systems, inboxes, and shared drives, making it difficult to access the latest version, track obligations, or enforce consistency. Without a single source of truth, organisations lose visibility into key terms, dates, and risks.

2. Manual and Inconsistent Processes

Many organisations still rely on spreadsheets, email chains, and offline approvals to manage critical contract workflows. This leads to delays, missed steps, and non-compliance. Manual processes also introduce errors and make it difficult to scale contract management as volumes grow.

3. Lack of Post-Signature Oversight

Once a contract is signed, it often disappears from active oversight. Without structured post-signature management, organisations struggle to track renewals, amendments, and obligations, increasing the risk of revenue leakage, non-compliance, and uncontrolled contract changes.

4. Poor Integration with Risk and Governance

Contracts are deeply tied to supplier risk, third-party compliance, and regulatory obligations. When contract management is siloed from broader governance frameworks, critical risks go unmanaged. Audits become harder, and teams lack assurance that contractual commitments are being fulfilled.

5. Low Contract Visibility Across the Business

Business users in procurement, finance, legal, and operations often can’t easily find or understand the contracts they depend on. Without clear access to the right information, teams duplicate work, delay decisions, or act without awareness of existing obligations or rights.

6. Missed Renewals and Auto-Rollovers

Without automated alerts or structured renewal processes, contracts can auto-renew by default, leading to unreviewed spend, missed renegotiation opportunities, or ongoing liability with underperforming vendors.

7. No Meaningful Reporting or Insight

When contracts are unstructured or scattered, reporting becomes manual and retrospective. Leaders lack real-time insight into contract status, risk exposure, or performance. This limits strategic decision-making and increases reliance on anecdotal knowledge.

The Benefits of Contract Lifecycle Management (CLM)

Contract Lifecycle Management (CLM) delivers value far beyond just storing agreements. When properly implemented, CLM becomes a foundation for operational efficiency, risk control, and better commercial outcomes. Its benefits span departments — from Legal and Procurement to Compliance, Risk, and Finance.

1. Improved Contract Visibility and Access

CLM centralises contracts in a structured, searchable repository, making it easy for teams to find the latest version, understand terms, and act with confidence. No more lost contracts in inboxes or outdated PDFs in shared drives.

2. Reduced Contract Risk

With controlled workflows, obligation tracking, and automated alerts, CLM helps organisations avoid missed deadlines, auto-renewals, and non-compliance. Structured metadata and audit trails give teams the oversight they need to manage contracts as active risk controls.

3. Faster Cycle Times and Operational Efficiency

By standardising templates, automating approvals, and integrating e-signature, CLM reduces time-to-contract. This improves speed to value — especially during onboarding, procurement, and renewals — while freeing up legal and commercial teams from manual admin.

4. Post-Signature Compliance and Obligation Management

CLM extends beyond execution by tracking milestones, variations, and fulfilment of contract terms. This ensures organisations not only sign good contracts — but actually deliver and enforce them.

5. Increased Contract Value and Renewal Control

CLM helps teams identify underperforming contracts, track pricing and discounts, and prepare for renegotiation. Rather than auto-renewing passively, organisations can proactively manage renewals based on historical performance and commercial value.

6. Stronger Governance and Audit Readiness

With structured data, controlled access, and complete version histories, CLM supports internal governance and external audit requirements. It reduces reliance on tribal knowledge and ensures defensible processes for critical contracts.

7. Cross-Functional Collaboration

CLM enables legal, procurement, finance, and compliance teams to work from a single source of truth. Everyone sees the same information, workflows are aligned, and contracts move through the lifecycle with fewer bottlenecks and misunderstandings.

8. Better Insight and Reporting

Contract data becomes accessible for reporting and analysis — allowing leaders to track cycle times, contract value, renewal patterns, and risk exposure. This supports better planning and more strategic supplier and customer relationships.

Why You Need a CLM Tool for CLM

Managing contracts manually may be feasible at small scale, but it does not hold up once contracts become numerous, regulated, or business-critical. After signature, obligations, amendments, and renewals accumulate quickly, and informal tools such as spreadsheets and shared drives provide no reliable way to maintain control or evidence compliance.

A post-signature CLM platform provides the structure required to manage executed contracts consistently. It enables organisations to maintain a single source of truth, track obligations and milestones, control amendments, and monitor renewals through governed workflows rather than individual intervention.

Without this level of structure, contractual risk remains fragmented and largely invisible. Obligations are missed, changes are poorly documented, and renewal decisions are made without complete information. Over time, this results in increased regulatory exposure, financial leakage, and an inability to demonstrate effective contract governance.

In contrast, a dedicated post-signature CLM platform embeds oversight into day-to-day operations, allowing organisations to manage contracts as governed assets rather than unmanaged documents.

Frequently Asked Questions

Q: What is the difference between Contract Management and Contract Lifecycle Management? A: “Contract Management” often refers to the administrative task of filing and storing documents. “Contract Lifecycle Management (CLM)” is the holistic, technology-led process of managing the content and performance of the contract throughout its life to maximize value and minimize risk.

Q: Who uses CLM software? A: While Legal teams use CLM for drafting, Procurement, Finance, and Vendor Ops teams are the primary users of Post-Signature CLM. They use it to track spend, monitor supplier performance, and ensure operational compliance.

Q: Can AI really manage contracts? A: AI cannot replace human judgment, but it can automate the manual labour. AI-driven CLM can instantly “read” thousands of pages to extract renewal dates, liability clauses, and payment terms, presenting them to human users for decision-making.

Why Brooklyn Solutions Is a Strong Fit

Brooklyn Solutions delivers a modern approach to Contract Lifecycle Management (CLM), helping organisations move beyond static documents to intelligent contract management. By centralising all agreements into a single repository, enriched with AI-powered clause extraction and obligation tracking, Brooklyn ensures contracts are no longer hidden risks or missed opportunities. This makes contract data searchable, actionable, and aligned to business goals, reducing the value typically lost after signature.

What sets Brooklyn apart in the CLM space is its AI-driven analysis with Ask Brooklyn, real-time compliance monitoring, and collaborative dashboards. These capabilities enable teams across legal, procurement, and finance to achieve faster cycle times, improved compliance, and stronger negotiations. By combining contract management with supplier and risk oversight, Brooklyn ensures contracts are not just managed but actively leveraged to drive growth and resilience.

How to Measure CLM Success

Measuring CLM success is about more than speed, it is about control, compliance, and confidence once contracts are live.

For organisations using Brooklyn’s post-signature CLM, success is demonstrated by the ability to maintain continuous oversight of executed contracts. This includes a measurable reduction in missed obligations and unmanaged renewals, providing clear evidence that contractual commitments are being met and monitored over time.

A key indicator of value is the reduction in manual intervention required to manage contracts after signing. Fewer manual touchpoints per contract show that governance is being enforced through structured workflows rather than informal processes, reducing operational risk and reliance on individual knowledge.

Financial impact can be measured through reduced revenue leakage and cost exposure, driven by stronger obligation management, controlled amendments, and timely renewal decisions. In regulated environments, success is also reflected in improved audit readiness, with clear, traceable evidence of contract approvals, changes, and compliance activity available on demand.

Adoption metrics remain important, but in a post-signature context they signal more than usage, they demonstrate behavioural change. When Legal, Compliance, Procurement, and Risk teams consistently rely on the platform as the system of record for executed contracts, it shows that governance has been embedded into day-to-day operations.

Finally, the value of automation and AI is measured not by novelty, but by trust. A high acceptance rate of AI-supported insights, such as risk identification, obligation classification, or anomaly detection, indicates that automation is enhancing oversight and decision-making rather than creating noise.

In short, Brooklyn’s CLM success is measured by an organisation’s ability to move from reactive contract management to continuous, controlled post-signature governance.

Conclusion

Once a contract is signed, it becomes a source of ongoing obligation, risk, and regulatory exposure. Without structured post-signature management, organisations rely on manual processes, fragmented systems, and individual knowledge to maintain control, often without realising where gaps exist.

Post-signature contract lifecycle management provides the discipline needed to govern executed contracts at scale. By centralising contracts, structuring obligations, and embedding compliance and change control into day-to-day operations, organisations gain visibility and assurance across their contractual estate.

In this context, CLM is not about efficiency alone. It is about ensuring contracts remain compliant, auditable, and aligned with governance frameworks throughout their operational life, particularly in environments where regulatory scrutiny and third-party risk continue to increase.

What is Contract Lifecycle Management?

What is Contract Lifecycle Management?

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