---
title: How CLM Strengthens Business Operations
description: A well implemented CLM system streamlines and improves the contracting processes, strengthens partnerships, and increases transparency and productivity.
image: https://blog.linksquares.com/hubfs/Copy%20of%20General_Thumbnail%20(1)-Apr-11-2023-01-34-46-4441-PM.png
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[Tim Parilla](https://blog.linksquares.com/author/tim-parilla) Apr 11, 2023 13 min read
# How CLM Strengthens Business Operations
Every business unit in the entire organization can benefit from the unique capabilities of contract lifecycle management (CLM). A well-implemented CLM system streamlines and improves the contracting processes, strengthens partnerships, and increases transparency and productivity. Adoption of legal technology, such as CLM, is rapidly increasing across all stages of businesses, and the benefits to the legal teams and the businesses as a whole are elevating the status of the legal function from merely a cost center to a driver of the business.
More frequently, legal leaders are making the case for investment into legal technology that will help not only the legal function, but the rest of the business as well. A strong CLM will provide increased visibility to the stakeholder requesting the legal services and will provide the ability to gather quantitative data as to the performance of the legal function. Adopting and implementing the right technology will provide a core, repeatable contracting process that will increase efficiency across the business and drive results to the bottom line. So that begs the question: what is the right technology for your organization?
## The Technology
Maximizing the investment in CLM requires a few key steps: 1) Pick the right solution for your business; 2) Prioritize the solutions that solve the legal team’s problems first; and 3) Mandate the adoption and continued use of the technology within the legal team, and hold the team accountable for using and maintaining the technology.
**The Right Solution**
When determining the right solution for the legal team, one must have a good understanding of the problem to be solved. For example, is a self-service solution to contract creation something that will save the legal team time in a way that still controls versions, types of contracts for a given deal, etc., or would the team benefit more from a tool that makes creation of new agreements easier and faster for the legal team? Is the key motivation in selecting the legal tech for increased efficiency in drafting and organizing agreements, or is having a solution that can quantify the work that the legal team is performing the main driver? Having a clear vision of what constitutes a successful adoption of tech is critical to making the right choice on technology.
[](https://cta-redirect.hubspot.com/cta/redirect/6934676/250f3d16-01e1-4888-aa13-961e7ec078d1)
**Legal Team First**
The technology should be focused on solving the problems of the legal team, whether that problem is one of organizing and managing the contracting process, managing and updating templates, or simply having a single source of information from which the legal team can operate. Many tools are focused on how to make the interaction with the legal team “easier” for the business, but these come at the expense of a streamlined solution that actually helps the legal team. Many will impose additional process on the attorneys doing the work so that the people asking for legal services have greater transparency. While a good CLM tool will provide that transparency, the tool you want will provide that transparency while actually improving the process for the legal team, creating efficiencies in deal velocity and close rates.
**Accountability for Adoption and Maintenance**
Simply purchasing a legal tech solution and letting the vendor “get you set up” will not result in the desired outcome absent true adoption and implementation of a new process within the legal team. The technology is an impetus for change in the way the legal team works. Structure your team’s process to incorporate and maintain the technology and the solution will work. If the desired end state is something different than what the team is providing today, only a fundamental, meaningful and permanent change in the way the team works will achieve the desired outcome, and technology adoption and implementation provides a useful framework for that change.
## Broader Organizational Impacts of CLM
Business units across the organization can benefit when the software is implemented and deployed strategically, in a way that connects critical information between teams. Legal tech that provides for easier transfer of data to and from the legal teams enables all areas of the business to realize the full value that a revenue-driven legal function brings to the business.
CLM can unify business processes and bring all of the information in the company’s contracts within reach for the business units. Among those teams that can most easily and immediately benefit from a well-integrated CLM are the Sales/Revenue team, the Finance team and the People team.
- **Sales Leaders**
Sales and legal teams collaborate to deliver high-value contracts, but enabling sales to create standard contracts using high-volume template agreements accelerates the sales timeline by meaningful amounts. This allows the sellers to consistently access the right contract language and agreement templates to get contracts into the hands of customers faster, while also giving legal teams the ability to make updates to templates in real time. Any sales leader will tell you that rarely is the passage of time a good thing in the sales process, so anything that can be done to accelerate the time to close is a huge difference-maker. When used and integrated correctly, a good CLM platform helps increase transparency and partnership between the sales and legal teams, and helps the teams to close deals faster and accelerate the productivity of commercial negotiators while maintaining consistency across the company’s entire contract portfolio.
- **The Finance Team**
The finance team and the legal team should work hand-in-hand to manage the company’s contractual cash flow, support regular audits, and to manage payment terms across the entire contract portfolio.
Cash flow is the lifeline of the business, and finance and legal teams must work together to structure contracts so that the cash flow (both incoming and outgoing cash flow) aligns with the operation of the business. The contractual terms can help manage that cash flow, and should provide for favorable renewal or termination provisions that the business can use as appropriate. Being able to track and identify cash payment obligations quickly and easily through the CLM is a critical component of bringing massive value to the finance team.
The legal team must also support the regular financial audits of the company. The CLM is an obvious tool to use when routine (and non-routine) requests from auditors to show support for payments inevitably arise. Being able to quickly identify and provide copies of relevant documents helps put finance in the driver’s seat with the auditors by displaying a well-organized, well-controlled finance and legal function.
Furthermore, many businesses have complex payment terms and nuanced remedy provisions that can be challenging for the finance teams to track. Using CLM, financial personnel and legal teams can collaborate to better track more complex payment terms, manage contracts by standard and non-standard payment terms, and understand remedies for late and missed payments.
The finance team and legal team should have a very close working relationship, and having the right technology helps to gain efficiencies for both teams, allowing the teams to work together to address all of the financial needs of the organization.
- **Human Resources**
Human resource professionals handle sensitive employee and company information every day, and it’s critical that only certain people have access to that data within contracts. Additionally, contract templates are hugely valuable for recruiters and human resources departments, particularly those in businesses operating across state lines. CLM legal tech can allow HR to templatize employment contracts for different types of positions and adjust for multi-state regulations. This type of functionality ensures hiring managers can select the applicable template, add a few details, and have an up-to-date, pre-approved contract ready quickly.
## Legal’s Role in Digital Transformation
The roles and responsibilities of in-house legal teams touch just about every aspect of the business. Executives are increasingly relying on the legal team to drive strategic change, and having all the company’s contract data in an organized, efficient storage and analytics solution is an essential part of that effort. Accordingly, legal leaders should feel empowered to make the adoption of technology a top priority for the entire team, and are responsible for ensuring that the technology is utilized effectively and consistently throughout the entire legal team. Taking a disciplined approach to the investment in technology and the implementation of key systems will change the operation, effectiveness, and eventually, the reputation of the legal team across the business.
This article was originally published by ALM’s Legaltech News. [Check it out here](https://www.law.com/legaltechnews/2023/03/15/selling-the-dream-how-clm-strengthens-business-operations/).
#### [Tim Parilla](https://blog.linksquares.com/author/tim-parilla)
Tim Parilla is the Chief Legal Officer at LinkSquares.
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"text" : "Every business unit in the entire organization can benefit from the unique capabilities of contract lifecycle management (CLM). A well-implemented CLM system streamlines and improves the contracting processes, strengthens partnerships, and increases transparency and productivity. Adoption of legal technology, such as CLM, is rapidly increasing across all stages of businesses, and the benefits to the legal teams and the businesses as a whole are elevating the status of the legal function from merely a cost center to a driver of the business. More frequently, legal leaders are making the case for investment into legal technology that will help not only the legal function, but the rest of the business as well. A strong CLM will provide increased visibility to the stakeholder requesting the legal services and will provide the ability to gather quantitative data as to the performance of the legal function. Adopting and implementing the right technology will provide a core, repeatable contracting process that will increase efficiency across the business and drive results to the bottom line. So that begs the question: what is the right technology for your organization? The Technology Maximizing the investment in CLM requires a few key steps: 1) Pick the right solution for your business; 2) Prioritize the solutions that solve the legal team’s problems first; and 3) Mandate the adoption and continued use of the technology within the legal team, and hold the team accountable for using and maintaining the technology. The Right Solution When determining the right solution for the legal team, one must have a good understanding of the problem to be solved. For example, is a self-service solution to contract creation something that will save the legal team time in a way that still controls versions, types of contracts for a given deal, etc., or would the team benefit more from a tool that makes creation of new agreements easier and faster for the legal team? Is the key motivation in selecting the legal tech for increased efficiency in drafting and organizing agreements, or is having a solution that can quantify the work that the legal team is performing the main driver? Having a clear vision of what constitutes a successful adoption of tech is critical to making the right choice on technology. Legal Team First The technology should be focused on solving the problems of the legal team, whether that problem is one of organizing and managing the contracting process, managing and updating templates, or simply having a single source of information from which the legal team can operate. Many tools are focused on how to make the interaction with the legal team “easier” for the business, but these come at the expense of a streamlined solution that actually helps the legal team. Many will impose additional process on the attorneys doing the work so that the people asking for legal services have greater transparency. While a good CLM tool will provide that transparency, the tool you want will provide that transparency while actually improving the process for the legal team, creating efficiencies in deal velocity and close rates. Accountability for Adoption and Maintenance Simply purchasing a legal tech solution and letting the vendor “get you set up” will not result in the desired outcome absent true adoption and implementation of a new process within the legal team. The technology is an impetus for change in the way the legal team works. Structure your team’s process to incorporate and maintain the technology and the solution will work. If the desired end state is something different than what the team is providing today, only a fundamental, meaningful and permanent change in the way the team works will achieve the desired outcome, and technology adoption and implementation provides a useful framework for that change. Broader Organizational Impacts of CLM Business units across the organization can benefit when the software is implemented and deployed strategically, in a way that connects critical information between teams. Legal tech that provides for easier transfer of data to and from the legal teams enables all areas of the business to realize the full value that a revenue-driven legal function brings to the business. CLM can unify business processes and bring all of the information in the company’s contracts within reach for the business units. Among those teams that can most easily and immediately benefit from a well-integrated CLM are the Sales/Revenue team, the Finance team and the People team. Sales Leaders Sales and legal teams collaborate to deliver high-value contracts, but enabling sales to create standard contracts using high-volume template agreements accelerates the sales timeline by meaningful amounts. This allows the sellers to consistently access the right contract language and agreement templates to get contracts into the hands of customers faster, while also giving legal teams the ability to make updates to templates in real time. Any sales leader will tell you that rarely is the passage of time a good thing in the sales process, so anything that can be done to accelerate the time to close is a huge difference-maker. When used and integrated correctly, a good CLM platform helps increase transparency and partnership between the sales and legal teams, and helps the teams to close deals faster and accelerate the productivity of commercial negotiators while maintaining consistency across the company’s entire contract portfolio. The Finance Team The finance team and the legal team should work hand-in-hand to manage the company’s contractual cash flow, support regular audits, and to manage payment terms across the entire contract portfolio. Cash flow is the lifeline of the business, and finance and legal teams must work together to structure contracts so that the cash flow (both incoming and outgoing cash flow) aligns with the operation of the business. The contractual terms can help manage that cash flow, and should provide for favorable renewal or termination provisions that the business can use as appropriate. Being able to track and identify cash payment obligations quickly and easily through the CLM is a critical component of bringing massive value to the finance team. The legal team must also support the regular financial audits of the company. The CLM is an obvious tool to use when routine (and non-routine) requests from auditors to show support for payments inevitably arise. Being able to quickly identify and provide copies of relevant documents helps put finance in the driver’s seat with the auditors by displaying a well-organized, well-controlled finance and legal function. Furthermore, many businesses have complex payment terms and nuanced remedy provisions that can be challenging for the finance teams to track. Using CLM, financial personnel and legal teams can collaborate to better track more complex payment terms, manage contracts by standard and non-standard payment terms, and understand remedies for late and missed payments. The finance team and legal team should have a very close working relationship, and having the right technology helps to gain efficiencies for both teams, allowing the teams to work together to address all of the financial needs of the organization. Human Resources Human resource professionals handle sensitive employee and company information every day, and it’s critical that only certain people have access to that data within contracts. Additionally, contract templates are hugely valuable for recruiters and human resources departments, particularly those in businesses operating across state lines. CLM legal tech can allow HR to templatize employment contracts for different types of positions and adjust for multi-state regulations. This type of functionality ensures hiring managers can select the applicable template, add a few details, and have an up-to-date, pre-approved contract ready quickly. Legal’s Role in Digital Transformation The roles and responsibilities of in-house legal teams touch just about every aspect of the business. Executives are increasingly relying on the legal team to drive strategic change, and having all the company’s contract data in an organized, efficient storage and analytics solution is an essential part of that effort. Accordingly, legal leaders should feel empowered to make the adoption of technology a top priority for the entire team, and are responsible for ensuring that the technology is utilized effectively and consistently throughout the entire legal team. Taking a disciplined approach to the investment in technology and the implementation of key systems will change the operation, effectiveness, and eventually, the reputation of the legal team across the business. This article was originally published by ALM’s Legaltech News. Check it out here.",
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