5 Must-Have Capabilities for Contract Management Tools
What Does Contract Management Software Actually Do?
Contract management software creates a single hub for your agreements, automating the tedious work while giving you visibility into what matters most. Instead of hunting through folders or chasing approvals via email, everything lives in one place with clear workflows and intelligent insights.
These platforms go far beyond digitized filing. Modern contract management software uses AI to extract key terms, flag potential risks, and even suggest language during negotiations. The push for these capabilities makes sense when you consider that most CLOs are juggling far more than contracts, with 70% managing at least two additional areas like risk, compliance, privacy, and ethics. Given that 35% of Chief Legal Officers list operational efficiency as their top priority and 44% plan to adopt new legal technology this year, contract management has become the logical starting point for departments looking to reclaim bandwidth for strategic work.
Why Is Contract Management Software Essential?
Contracts pile up faster than most teams can handle them. While legal departments race to keep pace with business demands, most are drowning in data chaos, and it's costing them in more ways than one.
According to EY's 2025 General Counsel Study, 87% of legal departments struggle with contract data challenges. Information sits disorganized across different locations (52% of departments), legal and business platforms remain disconnected (44%), and access to accurate data stays limited (41%). When you can't find what you need, contracts stop being business assets and start becoming liabilities.
Organizations are discovering that the right contract management software transforms how businesses think about agreements entirely. Modern platforms centralize agreements, automate workflows, and use AI to extract data, flag risks, and streamline processes that traditionally drain legal resources.
Six Must-Have Capabilities for Contract Management Software
Not every system delivers the same results. If you’re evaluating vendors, these six capabilities should be non-negotiable:
1. AI & Machine Learning
Manual contract review burns through hours that could be spent on higher-value work. Machine learning models analyze agreements in minutes, spotting key terms, obligations, and unusual clauses that might otherwise slip through.
Axiom's 2025 report found that three-quarters of legal departments are increasing AI budgets by 26–33%, but only one in five has achieved AI maturity. Early adopters of machine learning in contract review will gain a significant advantage by reducing risk and shortening cycle times while competitors are still catching up.
Beyond speed, machine learning shifts legal teams from reviewing every contract word-by-word to focusing on exceptions. The technology handles baseline review, flagging only what deviates from standard terms or company policies. This transforms legal from a bottleneck into an enabler — business teams get faster approvals on standard agreements, while lawyers spend their time on the contracts that actually need their expertise.
2. Searchable Contract Repository
Storage without search is just an expensive filing cabinet. A truly searchable repository lets users instantly locate specific clauses, terms, or agreements without the endless hunting.
CLOC research shows that 68% of professionals search for contracts at least once a week, spending more than two hours on average to find specific language. With an AI-powered repository, you can immediately identify contracts up for renewal, compare payment terms across vendors, or pull every agreement containing specific clauses. That visibility enables smarter decision-making across sales, finance, and procurement.
A searchable repository also shifts how organizations think about their contract portfolio. Instead of treating each agreement as an isolated document, teams can analyze patterns across hundreds or thousands of contracts. Which vendors consistently push back on indemnification clauses? What payment terms did you agree to three years ago that you'd never accept today? These insights surface naturally when you can query your entire contract database, turning historical agreements into strategic intelligence rather than forgotten files.
3. Contract Creation Wizard
Creating contracts shouldn't require starting from scratch or waiting for legal to draft every agreement. A contract creation wizard guides users through structured questions that automatically generate compliant, company-approved agreements.
The balance between speed and control is crucial. Business users get self-service capabilities while legal maintains oversight through templates and approval rules. Thomson Reuters data shows document automation can cut drafting time by up to 82%, giving lawyers bandwidth for complex matters while helping the business move faster without sacrificing compliance.
Contract creation wizards also reduce the version control chaos that plagues most organizations. When sales teams use outdated templates from shared drives or modify old agreements without legal review, you end up with contracts that contradict your current standards. A wizard ensures everyone starts from the same approved foundation, with built-in guardrails that flag non-standard terms for review. The result is consistency across your contract portfolio and fewer surprises when you need to audit what your business has actually committed to.
4. Risk Scoring and Approval Workflows
Every contract introduces potential exposure. Risk scoring evaluates terms against your internal standards, automatically flagging unfavorable clauses before they're signed. Automated workflows then route flagged contracts to the right stakeholders, ensuring consistent decisions without bottlenecks.
EY's 2025 study found that while 63% of legal departments have risk programs on paper, fewer than half have actual governance models in place. Embedding risk scoring and workflows directly into your contract management software ensures high-risk agreements never slip through unnoticed.
Risk scoring also creates institutional memory that survives personnel changes. When a seasoned contract manager leaves, their judgment about what constitutes acceptable risk often walks out the door with them. Codifying risk thresholds and approval requirements in your CLM platform means new team members inherit that expertise automatically. The system knows which clauses need executive approval, which vendors require enhanced due diligence, and which terms your company has consistently refused in the past — knowledge that would otherwise take years to accumulate.
5. Integrated eSignatures
The final step — getting signatures — can derail an otherwise smooth process. Printing, scanning, and emailing contracts wastes time while introducing security risks. Integrated eSignatures enable secure, trackable signing from any device without leaving your platform.
Nearly 90% of organizations struggle to locate contracts due to inadequate technology or processes. Manual signature workflows create version control nightmares where teams lose track of which version was signed, when it was executed, and who has the final copy. Integrated eSignatures provide a complete audit trail, so you always know the status and location of every agreement.
Integrated eSignatures also eliminate the momentum loss that kills deals. When contracts leave your platform for signing, they enter a black box — sitting in email inboxes, waiting on desks, or getting lost in the shuffle of busy schedules. By keeping the entire signature process inside your CLM platform, you maintain visibility and control. You can see exactly who needs to sign, send automated reminders to stragglers, and close deals without the anxiety of wondering whether your contract is languishing in someone's spam folder.
6. Generative AI Capabilities
Generative AI handles the heavy lifting that traditionally consumes hours of legal time. It can draft contract language based on your legal playbook and approved templates, suggest specific redlines during negotiations, and instantly summarize complex agreements into digestible insights. When a 50-page vendor contract comes back with extensive markups, generative AI can provide a summary of key changes and recommend negotiation strategies within minutes.
The technology goes beyond basic document review. It can analyze contract terms against your company's standard positions, flag unusual clauses that need attention, and even generate alternative language when negotiations stall.
Generative AI also levels the playing field during negotiations. Experienced negotiators know which clauses are worth fighting for and which are standard market terms. But that knowledge typically comes from reviewing hundreds of similar deals over years. Generative AI compresses that learning curve by analyzing your contract history and surfacing what's actually negotiable based on past precedent. A junior contract manager can now approach negotiations with the same context that would normally require a decade of experience.
When Basic Contract Management Tools Stop Working
Spreadsheets and shared drives might have worked when you had dozens of contracts. But when you're managing hundreds or thousands of agreements, the cracks become chasms. Without automated alerts, auto-renewals catch teams off guard and lock them into another year of unfavorable terms. When audit season arrives, scattered documentation turns what should be routine verification into frantic searches across email threads and file servers. Disputes often arise because key contract details — delivery timelines, performance metrics, liability caps — get buried in documents nobody can easily access when questions surface.
Each missed deadline, each scrambled search, and each preventable dispute chips away at your team's capacity to focus on what actually moves the business forward. If your teams spend more time searching for documents than negotiating terms, basic tools have already become the constraint holding your organization back.
How AI Enhances Contract Management Software
AI doesn’t just make contracting faster—it makes it smarter. With contract data extraction, risk scoring, and predictive analytics, AI turns agreements into a rich source of business intelligence. Leaders can see where negotiations stall, which terms create delays, and which obligations drive the most disputes.
This clarity directly supports the priorities of legal executives. The ACC 2025 CLO Survey found that operational efficiency is the top initiative for more than a third of CLOs, and nearly half expect to adopt new technology this year. AI-enabled contract management software is one of the most effective ways to achieve those goals, delivering measurable improvements in speed, compliance, and decision-making.Creating contracts shouldn't require starting from scratch or waiting for legal to draft every agreement. A contract creation wizard guides users through structured questions that automatically generate compliant, company-approved agreements.
The balance between speed and control is crucial. Business users get self-service capabilities while legal maintains oversight through templates and approval rules. Thomson Reuters data shows document automation can cut drafting time by up to 82%, giving lawyers bandwidth for complex matters while helping the business move faster without sacrificing compliance.
Contract creation wizards also reduce the version control chaos that plagues most organizations. When sales teams use outdated templates from shared drives or modify old agreements without legal review, you end up with contracts that contradict your current standards. A wizard ensures everyone starts from the same approved foundation, with built-in guardrails that flag non-standard terms for review. The result is consistency across your contract portfolio and fewer surprises when you need to audit what your business has actually committed to.
Clearing Up Misconceptions About AI in CLM
AI in contract management faces skepticism despite its proven capabilities. One persistent myth is that AI will replace contract professionals. In reality, AI amplifies human expertise by handling repetitive analysis like flagging non-standard clauses and summarizing redlines. This frees legal teams to focus on negotiation strategy and the complex judgment calls that require human insight.
Another misconception is that AI-powered platforms require extensive technical training. Modern generative AI in CLM is designed to be intuitive and functions as a natural extension of existing workflows. The interface works like a chatbot that understands plain language queries, so even non-technical users can get started with minimal onboarding.
A third concern is that AI operates as a "black box" where you can't understand or verify its recommendations. Quality AI-powered CLM platforms provide transparency by showing you exactly which contract provisions informed a recommendation and explaining the reasoning behind suggested edits. You maintain full control — the AI suggests, but humans always approve, with clear audit trails showing who made which decisions and why.
Turning Contracts Into Strategic Assets
While there are countless contract management tools to choose from, few provide end-to-end capabilities that transform your contract process from a cost center to a value center. At IntelAgree, we're on a mission to accelerate contract management so you can do impactful work, not busy work.
Ready to get started? Schedule a demo today.Creating contracts shouldn't require starting from scratch or waiting for legal to draft every agreement. A contract creation wizard guides users through structured questions that automatically generate compliant, company-approved agreements.
Additional Reading
- Why Your Contracts Are Costing You Money: The Case for Contract Analytics — Uncover the inefficiencies and revenue leakage hiding in your contracts.
- Trust in AI: Navigating the Emotional Side of Generative AI Contract Management — Understand what makes AI-powered CLM trustworthy and how to build confidence in the technology.
- 3 Ways AI-Based CLM Platforms Solve Contract Management Issues — See how AI-based platforms reduce risk, improve cash flow visibility, and accelerate your contracting process.