CLM Adoption Surges as Legal Teams Face Digital Pressure

A 2026 survey of 1,151 legal professionals across 10 countries reveals that 78% are ready to adopt Contract Lifecycle Management tools to address mounting compliance pressures and operational inefficiencies.

Zoho Corp.'s global survey examined how organizations manage contracts amid evolving regulations, AI integration, and stakeholder demands. Conducted across the United States, Canada, United Kingdom, India, Netherlands, Philippines, Mexico, Australia, United Arab Emirates, and Singapore, the research highlights critical gaps in current practices and shows growing momentum toward digital transformation in legal operations.

Legal departments are shifting from cost centres to strategic business drivers. Contracts govern all commercial transactions, and managing them efficiently directly impacts operational speed, cost control, and compliance outcomes. Organizations that digitize contract management gain competitive advantages through faster deal cycles, reduced risk exposure, and improved cross-functional collaboration that strengthens supplier relationships and enables data-driven insights.

Current State

The survey reveals a fragmented technology landscape where 66% of respondents still rely on word processors and document management systems for contracts, while 50% use manual methods. Only 31% currently use dedicated CLM platforms despite their comprehensive functionality.

eSignature tools lead adoption at 68%, followed by ERP systems at 66% and CPQ tools at 52%. This disconnected approach creates workflow bottlenecks as teams toggle between multiple applications for authoring, tracking, approval, and communication throughout the contract lifecycle. ERP systems, while widely used, are becoming less popular due to high costs, lengthy implementation times, and steep learning curves.

Mary George, Head of Legal at Zoho, notes: "Managing contracts is becoming increasingly challenging in today's business landscape because of evolving compliance requirements, facilitating cross-functional collaboration and managing complex negotiations."

Challenge Analysis

Compliance remains the primary concern for 43% of respondents. As laws around data protection, industry-specific regulations, and international trade continue evolving, non-compliance results in disputes, financial penalties, and reputational damage. The challenge intensifies for organizations operating across multiple jurisdictions with varying regulatory frameworks.

Contract negotiation difficulties stem from manual redlining processes that increase errors and reduce transparency. This slows approval cycles and diverts resources from strategic initiatives. Data security concerns rank third, as organizations struggle to ensure contract data is stored, accessed, and shared securely while meeting regulatory requirements.

Secondary operational pain points include difficulty storing and retrieving contracts, inadequate integration with CRM and ERP systems, and lack of analytics capabilities. Organizations struggle to generate actionable insights from contract data, making it difficult to identify improvement areas, measure performance, and make data-driven decisions.

Value Delivery

Among organizations using CLM tools, the impact is quantifiable and substantial. Daily usage patterns show 61% access their CLM systems every day, making it integral to operations. The efficiency gains translate into measurable time savings where 47% of respondents save more than seven hours per week per employee, with 21.2% saving between seven and 10 hours weekly.

More significantly, 70% of respondents reinvest saved time into higher-value activities. These include enhancing risk management frameworks, refining compliance strategies, and optimizing contracts with trading partners to achieve better terms and cost efficiencies. Expertise previously spent on administrative tasks now contributes to revenue-generating activities including supporting mergers and acquisitions, fostering strategic partnerships, and leveraging contract data to negotiate more favorable deals faster.

Organizations measure CLM effectiveness across three critical dimensions:

• Efficiency metrics track cycle time from initiation to execution, contracts processed per employee, automation rates, and average negotiation duration

• Financial metrics assess cost savings, procurement efficiency, time-to-revenue, and customer retention rates

• Compliance metrics monitor SLA adherence, regulatory alignment, and obligation tracking accuracy

The research shows 60% of respondents believe CLM tools contribute significantly to performance measurement, while 43% report substantial improvements in stakeholder satisfaction through better communication, more transparent processes, and more effective contract execution.

Strategic Priorities

Integration capability emerged as the most critical requirement, with 77% viewing seamless connections between CLM and other business systems as essential. For buy-side contracts, organizations need ERP integration to synchronize contract terms with purchase orders and invoices, ensuring accurate financial forecasting and timely payments. Supply Chain Management integration provides end-to-end visibility over supplier contracts, helping procurement teams monitor performance and ensure compliance.

For sell-side contracts, CRM integration syncs customer data for faster and more accurate contract drafting. CPQ tool integration aligns sales quotes with contract terms, while Professional Services Automation platform connections help service providers manage project timelines, resource allocation, and billing based on contract conditions.

Rishi Ganiswaran, Head of Legal at Yinson Group, states: "Organizations are prioritizing process automation, seamless system integrations, and compliance to transform their contract management processes."

Data security improvements top the priority list at 47%, reflecting growing concerns over safeguarding sensitive contract information. Organizations seek robust encryption, granular access controls, and technologies like blockchain to ensure compliance with stringent data protection regulations. Process automation ranks second, with businesses aiming to incorporate AI-driven suggestions in contract drafting, approval routing, and automating post-execution processes like renewals to boost efficiency and minimize errors.

Adoption Barriers

Budget constraints affect 44% of respondents, primarily because legal teams struggle demonstrating return on investment when CLM is viewed solely as a compliance tool. This perspective overlooks substantial commercial value including time savings, risk reduction, and revenue protection from missed obligations or unfavorable terms.

Resistance to change impacts 42% of organizations as employees comfortable with legacy systems prove reluctant to transition despite potential productivity gains. The perception that extensive technical expertise is required affects 41% of respondents, though modern CLM solutions are designed with user-friendliness requiring minimal technical knowledge.

Despite these barriers, 74% believe technology will enhance rather than replace their roles. Only 6% fear job displacement. This optimism reflects growing confidence that AI technologies like natural language processing, predictive analytics, and machine learning enable faster contract creation and improved risk management while preserving human expertise for strategic decision-making.

Implementation Approach

Organizations without CLM systems should begin by identifying their maturity level and mapping specific gaps that digital tools can address, such as automating manual processes or enhancing compliance tracking. A phased roadmap starting with foundational capabilities like contract storage and searchability, then progressing to workflow automation and reporting as processes evolve, allows teams to demonstrate value before broader investment.

Securing leadership buy-in requires explaining how climbing the CLM maturity curve unlocks measurable business benefits including risk reduction, time savings, and minimized revenue leakage. A pilot program addressing foundational gaps can demonstrate progress and justify broader adoption with gradual introduction of advanced features.

Organizations already using CLM software should evaluate their position on the maturity curve and identify underutilized features. Increasing maturity often involves unlocking advanced capabilities such as workflow automation, analytics, or AI-driven insights that deliver disproportionate value. Continuous training equips teams to handle complex workflows, integrations, and data-driven decision-making that accompany higher maturity levels. Regular audits and performance measurements help evaluate efficiency improvements and mitigate business risks.

About Zoho

Zoho Contracts is a comprehensive CLM solution enabling end-to-end contract lifecycle management through a cloud-based platform. Features include built-in document editing with advanced assembly capabilities, real-time collaboration, approval workflow management, redlining with version control, native e-signature capability, contextual obligations tracking with reminder alerts, centralized repository management, audit trails with access control, and advanced data protection settings.

Learn more about Zoho Contracts here -

Zoho Contracts

Zoho Corporation Pvt. Ltd.