Over the past few months, I’ve been hearing a familiar murmur in legal tech circles:
“CLM is dead.”
On its face, this isn’t surprising. Many Contract Lifecycle Management (CLM) vendors are struggling. Some can’t raise new capital. Others are frantically rebuilding their platforms to survive in an AI-first world. Even the flagbearers are shifting gears. Ironclad, perhaps the best-known modern CLM vendor, recently replaced its founder-CEO with Dan Springer, former DocuSign CEO signaling a desire for operational rigor and possibly a pivot in positioning.
But here’s my view:
CLM isn’t dead. It’s being unbundled. And that’s exactly what should have happened all along.
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Where CLM Went Wrong
CLM was always a vague promise.
Was it a document repository? A metadata extraction tool? A workflow engine? A collaboration hub? A compliance guardrail?
In truth, it tried to be all of these – and in doing so, became none of them particularly well.
Early CLM emerged to solve simple, meaningful problems:
- Storing contracts in one place.
- Making them searchable and accessible.
- Tracking key metadata and milestones.
But then, venture capital came flooding into the space. Legal was one of the last major business functions to digitize, and investors saw dollar signs.
The mandate became: grow TAM (total addressable market) at all costs.
But the in-house legal sector, the sector at which CLM was aimed at, while growing, remains relatively small compared to other enterprise functions. In the U.S., the number of in-house counsel was around 130,000 in 2022. The reality is that the overall size of in-house legal teams tends to be modest compared to other functions like Sales, Marketing, or HR. Sales teams can number in the hundreds or thousands in large enterprises. Legal teams? Often fewer than ten. Even in Fortune 500 companies, in-house legal teams are typically lean by design – tasked with risk management and governance, not high-volume operational execution.
This matters because legal tech vendors were selling into a market with fundamentally limited seat count and budget headroom. When the core buyer has ten seats, not 500, how do you show the kind of hypergrowth VCs expect?
Well, it’s easy. You broaden the pitch. You add features. You move sideways into procurement, finance, compliance, sales enablement – whatever adjacent function you can plausibly sell to.
So CLM platforms bloated:
➕ Approval workflows.
➕ Redlining tools.
➕ Clause libraries.
➕ Integrations galore.
➕ E-signature.
➕ AI contract analysis.
And that’s where things started to break.
Each addition made sense in isolation. On paper, they all added value – a workflow here, an AI feature there, tighter integrations to round it out. But layered together, they became a burden. Systems grew cumbersome, taking months – sometimes years – to fully implement. When they were finally switched on, adoption often lagged. Legal teams found them clunky or misaligned with day-to-day needs. Business users, even more so, resisted. Worst of all, even after all that time and investment, the promised ROI was often hazy at best.
CLM became a catch-all. And like all catch-alls, it failed to be essential.
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Why CLM is Being Unbundled – and Why That’s a Good Thing
Let’s be clear. CLM – or the core problems it set out to solve – still matter. Contracts don’t manage themselves. They still need to be stored, tracked, negotiated, and analyzed. Risk doesn’t disappear. Governance and visibility are still essential. What’s changed isn’t whether these needs exist – it’s how they should be met. The monolithic “all-in-one” platform wasn’t the answer. But the mission remains critical. What’s emerging now is a better path: modular, AI-powered tools that tackle these same jobs in faster, simpler, and more intuitive ways.
Today, we’re seeing contracting entering its AI-first era, where large language models (LLMs) have shattered old barriers for new vendors.
Where legacy CLM vendors spent years and millions building clause extraction or drafting tools, startups can now spin up better versions in months using LLMs, APIs, and cloud-native infrastructure to bypass the heavy lifting that once took legacy vendors years.
Meanwhile, buyers have become wiser, and many wear the scars to prove it.
Some have been burned by failed CLM rollouts. They’ve spent months, or even years, locked in painful implementations, only to end up with systems no one really used. They lost credibility with CFOs. They frustrated their own teams. They saw firsthand how promises of transformation quickly gave way to complex onboarding, poor adoption, and questionable returns.
These experiences have made legal tech buyers more discerning. They know better now. And many of them no longer believe that one massive, monolithic platform will solve all their problems. They know success doesn’t come from ticking every box on a feature list. It comes from tools that people actually use. Tools that fit seamlessly into workflows, deliver immediate value, and don’t demand a complete overhaul of how the team works.
This is why modularity has become the new north star.
Buyers want tools they can select on their terms and perhaps more importantly, on their timeline. They want to solve the highest priority problem they have right now, without committing to an all-in-one platform that forces them to buy (and pay for) features they either don’t yet need, or solve problems they’re not yet ready to solve. They want fast time-to-value, so change feels rewarding, not exhausting. They now know that there is more value in delivering on smaller wins rather than spending months on a ‘transformation project’. And they want intuitive, user-friendly interfaces that serve not only legal but business users across the company.
But modular doesn’t mean fragmented.
Legal teams don’t want a jumble of disconnected point solutions. They want a connected toolkit where each module solves a focused problem, yet works harmoniously with others when needed.
This is why unbundling CLM is not about breaking it apart and leaving buyers to fend for themselves. It’s about rebuilding CLM as a set of interoperable, best-in-class modules. Tools that can be bought, deployed, and scaled when teams are ready.
And that point, timing is critical.
Rolling out a traditional CLM has never been easy. Full-scale implementations are heavy lifts, demanding time, change management, and endless configuration. Most fail not because of the tech itself, but because adoption falters.
By contrast, modular contracting tools allow legal teams to start small and grow deliberately. They can solve immediate pain points today – redlining, repository, workflow automation – and layer in other modules as needs evolve and momentum builds.
This incremental approach turns transformation from an overwhelming, high-risk gamble into a series of achievable steps. Adoption becomes organic. Change management becomes manageable. And with each successful rollout, trust and appetite for further innovation grows.
In this way, modularity doesn’t just make contracting tech more flexible. It makes transformation possible. Because real transformation isn’t driven by technology alone – it’s driven by adoption. And adoption thrives when change feels achievable, not forced.
This isn’t CLM 2.0. It’s post-CLM.
And it’s exactly where the market is heading.
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What’s Next: CLM as a Toolkit, Not a System
The all-in-one “CLM platform” is fading – and that’s a good thing.
But let’s not confuse the failure of the model with the disappearance of the need. The problems CLM tried to solve like generating, negotiating, tracking, and analyzing contracts, haven’t gone anywhere. They still matter deeply. What’s changed is how they should be addressed.
Instead of one rigid system trying (and often failing) to do it all, we’re moving toward a connected ecosystem. Specialized, AI-native tools will handle each stage of contracting with precision, designed to solve specific problems without unnecessary complexity.
This shift isn’t just about technology. It’s about giving legal teams control. No more forced rollouts or feature bloat. Instead, teams can tackle the right challenges, at the right time, with tools that fit seamlessly into their workflows.
And that’s the real breakthrough. Not just AI. Not just modularity – but autonomy. The ability to solve essential contracting problems, clearly, efficiently, and on your terms.
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CLM Was Never Supposed to Be Monolithic
The death of CLM, at least in the form we’ve known it, is overdue.
But what’s taking its place is far more compelling. This new era of contracting is modular by design. It’s AI-assisted, tailored to buyers’ real needs, and seamlessly integrated into the way business actually gets done.
Not a bloated platform. Not a silver bullet. Not a towering system that dictates how teams must work.
Instead, exactly what it should have been all along:
A flexible, intelligent toolkit built to fit how people actually work, and evolve as they do.
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Interested in learning more about CLM? Get a demo of SimpleCLM – the first unbundled CLM on the market.
Tags: CLM, Contract Lifecycle Management