With the rise of tools like ChatGPT, it’s easy for any contract lifecycle management (CLM) software vendor to tack on AI and call themselves innovative. But not all AI solutions deliver the same impact, and vendors who have been working with AI from the start — who have built it into their clear platform’s DNA — can offer significant advantages.
In fact, Goldman Sachs estimates that generative AI could automate almost half of all legal tasks. But how that AI is integrated and leveraged matters. Vendors that have built AI from the ground up bring years of experience, reliability, and transparency that newer, "bolted-on" solutions simply can't match. In this blog, we’ll explain why that experience should be a deciding factor for your organization.
Not All AI Contract Management Tools Are Created Equal
It’s easy to assume that AI is AI, no matter how it’s integrated into a platform. But even if two systems are using the same AI-based technology, the reality is much more complex.
When AI is added as an afterthought, vendors may be more concerned with "checking a box" to meet customer demand than truly enhancing their platform’s capabilities, which can create several problems related to:
- Complexity: Integrating AI into an existing system isn’t as simple as adding a new feature. It requires in-depth knowledge of how AI interacts with the platform’s architecture, databases, and workflows. Teams with little AI experience may face challenges like misaligned systems, clunky integrations, and poor user experiences because they haven’t had the time to fully understand the technology.
- Scalability: AI requires significant processing power and the ability to handle increasingly complex tasks over time. If the system wasn’t designed for this from the start, you could encounter performance bottlenecks that slow down contract processing as your business expands.
- Debugging and optimization: Without a deep understanding of AI, these teams might not know how to resolve the inevitable issues that arise when AI doesn’t work as expected. Small changes to an AI model or the data it processes can lead to significant performance variations. Vendors with years of AI experience know how to troubleshoot and fine-tune these models, ensuring that the system consistently delivers high-quality results. Those without this experience, or who rely on third parties for expertise, are more likely to leave you dealing with bugs, inefficiencies, or an underperforming system.
With an integrated system, the AI has been trained, tested, and refined alongside other features of the platform. This doesn’t just enhance the performance of the AI but also how the system grows with your organization. When vendors build AI from the ground up, they design the entire platform to work together seamlessly, and they are consistently refining and improving AI features and functions over time.
If you're thinking long-term — and you should be while vetting vendors — ask yourself: How much does this vendor truly understand AI? And is their AI feature built to enhance my contract management experience, or is it just ticking a feature box?
Why Experience Should Be Your No. 1 Priority
You wouldn’t trust an inexperienced contractor with a major renovation. The same logic applies when choosing a CLM software vendor. Experience gives vendors an edge — not just in understanding AI, but in understanding how AI works within a business context.
For example, a vendor with AI expertise alone might be able to create impressive models and features, but without the deep understanding of CLM, those features might not actually solve the specific problems that come up in managing contracts. Conversely, a vendor with only CLM expertise might struggle to integrate AI effectively, leading to tools that don’t perform well or provide inconsistent results.
Vendors with dual expertise have already spent years perfecting this balance. They’ve learned how to use AI to enhance every stage of contract management — from drafting and negotiation to review and renewal — while ensuring that these AI-driven processes work seamlessly within the broader CLM system. They understand the nuances in language, context, and the specific ways businesses handle their legal agreements, so they can tailor AI features to support and improve your specific processes, rather than simply offering generic AI tools that may not fit your needs.
Benefits of this expertise include:
- Proactive problem-solving: These vendors have already tackled the common obstacles newer entrants are still learning about. Their infrastructure allows them to quickly roll out targeted updates and feature improvements, reducing downtime and making sure your contract processes run smoothly.
- Realistic expectations and transparency: With their experience, these vendors are upfront about what their AI can and cannot do, providing clear examples of where it delivers the most value. This straightforward approach helps you set realistic expectations and trust the system to improve your contract workflows.
- Long-term vision: Having seen the rapid rise and fall of tech trends, these vendors focus on long-term solutions that address your core needs, like improving contract accuracy and speeding up approvals. Their approach ensures you're not stuck with fleeting trends that don’t contribute to your bottom line.
You need a partner who has been using AI before it was hyped up — a vendor that’s encountered the edge cases, learned from mistakes, tested their platform in real-world environments, and built a foundation of trust with their customers. In the next section, we'll talk about how to find them.
Questions to Ask AI Contract Management Software Vendors
Before choosing an AI-based CLM vendor, assess your organization’s specific requirements. Identify the pain points you want to address such as contract turnaround times, compliance, or risk management — and consider how an AI-driven approach aligns with those goals and what functionalities are crucial for your success.
Then, assess a vendor's experience by asking questions like:
- How long have you been working with AI in your CLM platform, and how has it evolved over time? Experienced vendors should be able to explain how their AI features have adapted based on customer feedback and evolving needs, making their solutions more reliable and suited to real-world applications.
- What data and methods do you use to improve AI models and ensure their reliability? Ask vendors how they collect and use data to make their AI smarter over time. This could include feedback mechanisms, user interaction data, or testing with client-specific contract data to enhance performance.
- What is your experience in scaling AI for growing businesses? Scaling AI isn’t as simple as flipping a switch. Vendors with experience will have a plan for growth and should explain how their system evolves alongside your business’s expanding needs.
- Do you have a dedicated in-house AI team, or is this expertise outsourced? Vendors with in-house AI teams can continuously improve their tools through hands-on experiments and direct user feedback. Outsourced AI expertise, on the other hand, often lacks the same level of customization and responsiveness to evolving needs.
- How does your AI ensure data security? Data security is non-negotiable when managing contracts. Ask how the vendor's AI enhances security and what steps they've taken to protect sensitive information.
AI Contract Management Vendor Red Flags to Look For
Spotting these red flags early can save you from choosing a system that fails to meet your needs in the long run:
- Vague or overly controlled demos: If a vendor can only provide highly controlled demos or video walkthroughs of their AI features, be wary. You want a vendor who’s confident enough in their AI to let you test it yourself.
- Unrealistic promises about future AI features: Some vendors may advertise AI features that aren’t fully available yet or that seem too good to be true. If a demo looks flawless but the vendor mentions it’s still “in development,” it’s a sign to proceed with caution.
- Lack of real-world use cases: If a vendor can’t provide examples of how their AI has been used successfully in real-world contract scenarios, that’s a red flag. Experienced vendors will have case studies and testimonials to prove the effectiveness of their AI software.
- Lack of transparency: If a vendor can’t explain how their AI tools work or what data they’re using to train their models, be cautious. You deserve to know how your data is being handled and how AI is being applied to your contracts. For example, what type of security controls — like HIPAA and SOC 2 Type II — do they have in place? What third-party providers do they work with to manage your data? And how do they protect your data while using features like OpenAI?
The Final Verdict: Experience Trumps Hype
Hype might sell demos, but experience delivers results. Choose a vendor who understands AI and CLM deeply, who has refined their tools over years, and who can offer you not just technology but a partnership built on trust and reliability.
For more insights on how AI — especially generative AI — can transform contract management, download IntelAgree’s whitepaper, "Contract Lifecycle Management and the Generative AI Impact."