At a recent industry event, our CEO, Matteo Pagani, joined a panel to debate one of the most persistently unresolved questions in legal departments: should organizations build their own Contract Lifecycle Management (CLM) system, or buy one? The conversation was interesting, honest and more useful than much of what gets written about CLM. It also revealed something more important than the build-versus-buy answer itself.
One of the more provocative takes on the panel came from a general counsel who has spent years as a power user of a market-leading CLM platform. His argument: CLM is, at its core, just a user experience wrapper around a fairly simple set of processes. Intake. Drafting. Negotiation. Approval. Signing. Obligations management. Repository.
If you break Contract Lifecycle Management down to its structural components, each step can be automated with tools most enterprises already have. An intake form. A document generation workflow. An approval routing engine. An e-signature integration. A searchable repository.
It's a compelling argument, and not without merit. With AI-powered tools embedded into platforms like Microsoft 365, building a functional CLM process is more attainable than it was even two years ago. You can go to where the business already works — Salesforce for sales contracts, a procurement platform for vendor agreements — and bring the intake process to them, rather than forcing everyone through a single legal portal.
The Operational Intelligence case for building is straightforward: if you control the architecture, you control the data model, and you can build exactly the workflow your organization needs.
But here's where the build argument quietly collapses, and the panel didn't shy away from it.
One panelist who had lived through both scenarios, i.e., building internally and then eventually buying a third-party platform, put it plainly: "It was painful." Their internally built system started with good intentions and served the legal team well. Then other departments noticed. Procurement jumped on. Compliance wanted in. The system grew legs, became overly complex, and eventually started creaking under its own weight.
When the IT team that built it moved on or shifted priorities, the whole thing became a liability. Two to three year technology refresh cycles meant the organization kept getting forced from one platform to another, dragging requirements documents and testing plans with them each time.
This is the hidden cost of build. It's not just the initial development, but the ongoing maintenance, the staff retention risk, the technology debt and the fact that most legal teams are not software houses. They don't have R&D budgets. They can't keep pace with a vendor whose entire purpose is to invest in that single product across dozens of industries and hundreds of use cases.
The IA before AI principle matters here too. Before you deploy AI on top of a CLM architecture, you need the foundational processes and data structures to be sound. A self-built system that's accreted over years of competing requirements from multiple departments is not a solid foundation for an AI layer. It becomes a liability.
Perhaps the sharpest observation from the session was this: organizations consistently come to CLM implementations asking the wrong question. Instead of "what system should I buy or build," they should be asking "what outcome am I trying to achieve?"
Is the goal to:
shorten the sales cycle?
Reduce vendor onboarding costs?
Improve obligations tracking post-signature?
Each of these requires a different set of capabilities and a different implementation approach.
When the outcome isn't defined, what follows is a product implementation rather than a business solution. Competing requirements from legal, procurement, marketing, finance and HR create build cycles that spiral. Technical debt accumulates. Adoption suffers. And two years later, the organization is back in the same conversation.
This is where the 80/20 rule applies. Standardize the core process, the one that runs across most of your contracts, and accept that edge cases will always need accommodation. Don't try to solve every department's pain point in version one.
The panel also wrestled with a question that tends to get avoided: should legal be the custodian of the CLM system, or does that responsibility sit elsewhere?
The honest answer is that it has to be broader than legal. Contract Lifecycle Management touches sales, procurement, marketing, HR, compliance and finance. Legal's role is to own the risk framework, set the control points and ensure the process enforces the governance model. But the execution and the ownership has to be distributed.
What works is a center-of-excellence model: a steering committee with clear accountability, where legal sets the rules of engagement and the business owns the outcomes. Without that structure, CLM projects either get hijacked by the loudest department or stall in a governance vacuum.
The final question put to the panel was whether Contract Lifecycle Management, in its current form, will still be relevant as AI reshapes how contracts are created, negotiated and managed.
The consensus was nuanced. Contracts are increasingly likely to become more standardized and, eventually, more codified. The negotiation phase — the part where humans genuinely add value — will be compressed as AI accelerates drafting and redlining. But the need to record, manage, measure and enforce obligations doesn't go away. If anything, the more automated contracting becomes, the more you need a system of record that governs the process.
The platform may look different. But the Operational Intelligence function — the ability to surface insights from contract data, track performance against obligations and connect legal work to business outcomes — that's not going away. It's becoming more important.
Build vs. buy is a legitimate question, but it's the second question, not the first. Before you get there, you need to be clear on what problem you're solving, which departments need to be part of it, what your governance model looks like and whether your organization has the sustained capability to maintain what it builds.
For most organizations, the buy argument wins. Not because building is impossible, but because the ongoing investment required to do it well is underestimated, and because the intellectual capital embedded in a purpose-built CLM platform is genuinely hard to replicate.
But the organizations that get the most from any CLM investment, built or bought, are the ones that treat it as a business process initiative first and a technology project second. That's the lesson the panel kept coming back to, and it's the one most worth taking away.