How to evaluate CLM software: a pilot checklist that tests the real process

Why demos are a poor basis for choosing a CLM

A demo shows a vendor's best path through its own sample data. Your contracts do not follow that path. They arrive as a counterparty's Word file with tracked changes, need an approval from someone who is travelling, get signed with whatever the other side will accept, and are then forgotten until a renewal date passes.

Most CLM disappointments are not about missing features. They are about the gap between the feature as demonstrated and the process as lived: the approval nobody could do from a phone, the redline that lost its formatting, the repository that nobody outside legal could search. A pilot is the only way to see that gap before you have paid for it.

Step 1: pick three contract types that represent your real work

Do not pilot with the easiest document you have. Pick three that between them cover the shapes your team actually handles:

• A high-volume standard document on your own paper, such as an NDA or a standard services agreement. This tests templates, self-service intake and speed.
• A negotiated agreement on the counterparty's paper, such as a vendor MSA or a customer contract that arrives as their Word file. This tests negotiation, version control and redlining.
• One document with a real execution or compliance wrinkle: one that needs stamping, a DSC signature, multiple signatories in a set order, or that creates obligations someone must act on later.

Step 2: run each one end to end, not feature by feature

For each contract type, run a live or recently closed deal through every stage, and write down who did what and how long it took:

• Intake. Can a requester from procurement or sales raise it without training, and does the request capture what legal needs?
• Drafting. Does the template produce a clean first draft with the right clauses for the answers given?
• Negotiation. Can your lawyers and the counterparty exchange the document in Word with tracked changes and comments intact, and is every version kept?
• Approval. Do the right approvers get it, in the right order, based on value or risk — and can they approve from where they actually are?
• Signature. Can it be signed by the method each signatory will actually use: Aadhaar eSign, DSC, or a global e-signature platform, in the order your policy requires?
• Stamping, where applicable. Does stamping fit into the flow for the state concerned, or does it become an offline errand?
• Storage. Is the signed copy filed automatically with its metadata — parties, value, dates — or does someone retype it?
• After signature. Does the renewal date, notice period or deliverable become a reminder with a named owner?

Which teams need CLM seats first?

The instinct is to licence the legal team and expand later. That pilots the wrong thing, because most of the friction in a contract process sits with people outside legal. For the pilot, give access to everyone who touches the three chosen contracts:

• The legal team members who draft and negotiate.
• Two or three requesters from the business units that raise those contracts most often.
• The approvers in the chain, including finance where value thresholds apply.
• At least one authorised signatory.
• Someone who will later need to find a signed contract — often finance, procurement or operations.

How CLM pilots and trials are usually structured

Vendors offer some mix of a free trial on a sandbox tenant, a paid pilot with limited users or modules, or a proof of concept configured on your own templates. The label matters less than three terms you should agree in writing before starting:

• Duration and scope: typically a few weeks, the three contract types, and a named list of users.
• Configuration: who builds your templates and approval rules for the pilot, and whether that work carries over if you buy.
• Success criteria: the measures below, agreed upfront, so the decision is not made on impressions.

What to measure during the pilot

Keep the scorecard short and factual. For each contract type, record:

• Time from request to signature, compared with how long the same contract type takes today.
• How many steps happened outside the system — emails, attachments, phone calls, printed copies.
• Whether the negotiated document came out the other side with formatting, numbering and tracked changes intact.
• Whether people outside legal completed their step without help after the first time.
• Whether the signed record could be found by someone who was not involved, using only what they would naturally search for.

Test migration of legacy contracts, not just new ones

The value of a repository depends on what is in it on day one. Ask each vendor to import a sample of your existing contracts, including scanned PDFs, and check the result yourself:

• Is scanned text made searchable, and how accurate is it on your older, poorer-quality scans?
• Which metadata fields are extracted automatically — parties, dates, value, renewal and notice terms — and how many need correcting by hand?
• Who does the full migration after purchase, at what cost, and in what timeframe?

How to compare CLM total cost of ownership

Price a three-year total for the number of people who should touch contracts if the process worked, not your current headcount in legal. Beyond licences, the lines that move the total are implementation and template set-up, integrations, migration of legacy contracts, e-signature and stamping costs, metered AI usage, storage, support tiers and the renewal uplift. Get each in writing. The companion guide on CLM pricing models covers how the pricing model itself changes the total.

India-specific checks

A CLM built for another market can pass a demo and still fail on execution in India. Check these explicitly:

• Signature methods: whether Aadhaar eSign and DSC are supported inside the workflow, not only a global e-signature provider.
• Stamping: whether stamping fits the states your entities contract in, given that mechanisms differ by state.
• Data protection: the DPDP Act, 2023 allows a data fiduciary to engage a data processor to process personal data on its behalf only under a valid contract (section 8(2)), and a CLM vendor will typically act as your processor for any personal data in your contracts. Review its processor terms as you would any other vendor's.
• Data location: where contracts are stored and processed, and whether that meets any storage requirement your sector regulator imposes.
• Support hours and implementation capacity in your time zone.

Red flags in CLM demos and pilots

Any one of these deserves a direct follow-up question before you go further:

• The vendor will not run your documents, only its sample data.
• Negotiation is shown only inside a browser editor, and the Word round-trip is described rather than demonstrated.
• Approvals and signatures are shown only for a single signatory in a single order.
• AI extraction is shown on clean, born-digital PDFs and never on a scan.
• Pricing for adding occasional users, or for metered items such as signatures and AI, is not given in writing.
• Pilot configuration is quietly discarded, so the real implementation starts from zero after signature.