- Contract management software has become the most commonly used legal technology among in-house legal departments, with nearly two-thirds (65%) now utilizing it, according to a report from the Association of Corporate Counsel (ACC) and Exterro.
- In-house legal professionals also rate contract management technology, often called contract lifecycle management (CLM) software, as the most effective legal tech tool, the ACC/Exterro survey report found.
- The other three categories of legal software used by more than half of legal departments are legal research (61%), e-billing (55%) and document repository (54%). The 2023 Legal Technology Report is based on responses from 252 in-house counsel and legal operations professionals from 22 countries.
The 65% of legal departments using contract management software is a 14 percentage points increase from when the ACC conducted a similar survey two years ago, the largest such bump among the various legal tech tools.
The uptick in utilization has come as there are a growing number of CLM software offerings in the market, with an array of companies generating millions of dollars in new investment to further develop and scale their products.
The relative effectiveness of CLM software compared to other tech tools, as evidenced in the ACC report, is also likely helping to boost usage rates.
Overall, 52% of professionals said they found contract management to be among the most effective software, a 5 percentage point increase from two years ago.
Even though respondents were able to select up to four options for the most effective technology, no other type of tool was listed by at least 40% of survey participants.
Reasons given for CLM software’s effectiveness included that it helps streamline the contract review process and makes contracting more consistent.
“It allows for superior efficiency and confidence of the legal department’s ‘one version of truth’ when it comes to contracts utilized across the organization,” one survey respondent wrote.
Another respondent said they appreciated that the software allows multiple colleagues to collaborate on the same document, and it houses all the executed agreements.
The ACC/Exterro survey found that 63% of legal chiefs and 51% of other in-house counsel listed contract management software as one of the most effective tools compared to 48% of legal operations professionals.
For legal ops professionals, e-billing (69%) and matter management (55%) were more frequently listed as among the most effective technologies.
Roughly three in four respondents overall (76%) hope to leverage CLM technology more effectively moving forward.
Meanwhile, of the respondents whose organizations are planning to or considering purchasing new technology in the next year, 46% said they would invest in contract management technology.
While the CLM figure was the highest among the different tools listed, it was down 10 percentage points from two years ago. This may be the result of an uptick in purchases in the past two years.
Additionally, 31% percent of respondents said they planned to purchase matter management technology and 23% document repository technology. No other tech tool eclipsed 20%.