7 Contract Management Challenges and How to Overcome Them

Contracts are central to nearly every business transaction, defining obligations, mitigating risks and underpinning commercial relationships. Yet, despite their strategic importance, most organisations continue to manage contracts in ways that are outdated, inefficient and risk-prone.

Contracts govern 60–80% of business operations, yet contract management remains one of the least digitised and most fragmented areas in many organisations. It’s not uncommon to find companies storing contracts in local drives, negotiating terms via email and manually tracking renewals in spreadsheets.

Contract Management Challenges

This misalignment between contract importance and management maturity creates bottlenecks, missed obligations, compliance risk and ultimately lost value. According to WorldCC, poor contract management can cost businesses up to 9% of annual revenue.

To address this, we need to look at the core operational challenges driving these inefficiencies and how organisations are beginning to solve them.

1. Time-Consuming and Manual Processes

One major factor is the time involved; on average, contract review takes 92 minutes per document, tying up valuable legal and business resources.

Contract creation, review and negotiation often involve repetitive administrative work, copy-pasting from past contracts, chasing stakeholders for approvals, or manually tracking version history. Legal teams spend a disproportionate amount of time on low-value tasks instead of focusing on strategic advisory.

Solutions:

Leading organisations are rethinking workflows with template standardisation, self-serve contracting and automated approval flows. By enabling business functions (like HR or sales) to initiate contracts using pre-approved language, legal teams can maintain control without acting as a bottleneck.

Modern platforms like Pocketlaw CLM, which provide dynamic template libraries, conditional logic and workflow automation, make this feasible without introducing risk.

2. Missed Obligations and Poor Visibility

Missed renewal dates, unnoticed auto-renewal clauses and untracked obligations are among the most common issues in manual contract environments. Many companies only realise a missed obligation after it creates a financial or legal consequence.

These issues are often a symptom of unstructured storage and the absence of a centralised contract repository. Without structured metadata (e.g., dates, parties, terms), it’s nearly impossible to run proactive oversight.

Solutions:

Centralising contracts into searchable, metadata-rich repositories is now standard practice among forward-leaning legal departments. These repositories allow organisations to filter contracts by governing law, renewal status, termination rights and more, offering a much clearer picture of their obligations.

Solutions with smart reminders and dashboard reporting, such as Pocketlaw, also allow for proactive contract lifecycle management, rather than reactive firefighting.

3. Compliance Gaps and Legal Exposure

As regulatory environments evolve, staying compliant becomes a moving target, especially for organisations operating in multiple jurisdictions. Outdated templates, inconsistent clause language and lack of audit trails can all expose businesses to unnecessary legal risk.

Solutions:

The shift towards controlled clause libraries and pre-approved templates helps ensure every contract aligns with current legal and regulatory standards. Legal teams define guardrails once, then business users operate within those parameters.

Some platforms also offer built-in audit trails and version histories, which help demonstrate compliance during audits or disputes. These features don’t just reduce risk, they also save significant time during due diligence processes.

4. Ineffective Collaboration Between Teams

Legal teams often struggle to balance responsiveness with control. On one side, business teams want to move fast. On the other side, legal must ensure compliance and risk mitigation. Without a shared system or structured process, collaboration becomes fragmented, resulting in delays and duplicated efforts.

In a common scenario, sales sends an NDA to a client without legal review, only for the legal team to discover later that key liability clauses were changed.

Solutions:

The solution isn’t adding more lawyers, it’s creating shared workflows. Cross-functional collaboration is improved when contract requests, drafts, comments and approvals happen within a single system. The most successful companies implement role-based permissions, ensuring each party has the right level of access and visibility.

Modern legal platforms like Pocketlaw, designed with both lawyers and business users in mind are becoming essential infrastructure for companies scaling contract volumes while keeping collaboration tight.

5. Inability to Scale

Growth creates complexity. As businesses expand into new markets or onboard new teams, contract volumes increase dramatically. Many contract workflows that work at 50 employees fall apart at 500.

Legacy systems or ad-hoc processes quickly become unsustainable. The result? Bottlenecks, inconsistent documentation and legal firefighting.

Solutions:

Scalability requires more than storing more contracts. It requires repeatable, automated and enforceable workflows. Cloud-based platforms built to support high-volume environments allow organisations to scale without adding headcount.

6. Failed Technology Implementations

Despite significant investment in contract lifecycle management tools, many organisations report poor adoption or outright abandonment. In most cases, the root problem is a mismatch between the product and user behaviour.

Legal and business users often find traditional CLM systems complex, rigid and disconnected from their daily workflows.

Solutions:

A new generation of legal tech platforms has emerged with a user-centric design philosophy. These tools prioritise simplicity, fast deployment, and real-world usability over feature bloat.

Instead of requiring heavy implementation, platforms like Pocketlaw offer no-code configuration, guided onboarding and interfaces that mirror how users already work. By aligning with existing behaviours, these solutions are far more likely to gain adoption and deliver long-term value.

7. Lack of Contract Data Intelligence

Contracts contain rich data on revenue obligations, liabilities, payment terms, and risk exposure. But without structured access, this information is locked in PDFs and unreadable to the business.

Legal and commercial teams are often unable to answer simple questions such as:

• How many active contracts expire this quarter?

• Which contracts have force majeure clauses?

• What’s our total risk exposure in non-EU jurisdictions?

Solutions:

Advanced platforms now structure contract data at the point of creation. That means metadata is not just extracted post-signature but embedded natively in each document. This unlocks advanced querying, reporting and analytics, enabling teams to use contract data in real time to inform decision-making.

Whether it’s preparing for an audit, a funding round, or a large procurement negotiation, contract intelligence is increasingly non-negotiable.

Why Traditional CLM Solutions Are Underperforming

Despite contract management software availability, 77% of in-house legal teams report failed technology implementations. This high failure rate stems from fundamental misalignment between software capabilities and organisational needs.

Traditional CLM platforms often require extensive customisation, lengthy implementation periods, and complex user training that disrupts existing workflows. Organisations invest significant resources in these systems only to discover they don't match real-world contract processes, leading to poor adoption rates and limited value realisation.

How Modern Legal Tech Platforms Are Revolutionising Contract Management

Contemporary legal technology platforms like Pocketlaw address traditional CLM limitations through user-centric design and intuitive functionality. These solutions prioritise business team autonomy while maintaining legal oversight and compliance standards.

Pocketlaw's Approach to Contract Management Transformation:

Pocketlaw transforms contract management by empowering business teams with self-service templates, automating workflows, ensuring compliance, and providing real-time visibility. Its scalable, integrated platform reduces risks, speeds approvals, and maintains consistency across organisations.

Self-Service Capabilities: Business teams in HR, sales, and procurement can independently create and manage contracts using pre-approved templates and clause libraries.

Automated Workflows: Approval processes mirror organisational hierarchies and decision-making structures, eliminating manual routing and approval bottlenecks.

Compliance Integration: Built-in legal controls ensure contract terms meet regulatory requirements and organisational policies without legal team intervention.

Comprehensive Visibility: Real-time contract tracking and analytics provide insights into contract performance, renewal timelines, and risk exposure.

Template Standardisation: Pre-approved contract templates reduce legal review time while ensuring consistency across all business units.

Risk Management: Automated risk assessment identifies potential issues before contract execution, preventing costly legal disputes.

Integration Capabilities: Seamless connectivity with existing business systems eliminates data silos and improves workflow efficiency.

Scalable Architecture: Cloud-based infrastructure supports growing contract volumes without performance degradation or additional infrastructure investments.

Selecting the Right Contract Management Solution

Choosing appropriate contract management technology requires careful evaluation of organisational needs, existing processes, and growth projections. The ideal solution balances functionality, usability, and integration capabilities.

How to choose the right contract management platform for your organisation:

To choose the right contract management platform, identify your pain points, ensure it integrates with your systems, and offers an intuitive user experience. Check scalability, compliance features, quick deployment, and strong vendor support to guarantee smooth adoption and lasting value.

• Assess Current Pain Points: Identify specific contract management challenges your organisation faces, such as approval delays, compliance gaps, or visibility limitations.

• Evaluate Integration Requirements: Review the platform's ability to connect with existing business systems, including CRM, ERP, and document management tools.

• Consider User Experience: Prioritise solutions that require minimal training and align with existing workflows to ensure high adoption rates.

• Analyse Scalability: Ensure the platform can accommodate growing contract volumes and expanding business requirements without performance issues.

• Verify Compliance Features: Look for built-in regulatory compliance tools and audit trails that meet industry standards and legal requirements.

• Review Implementation Timeline: Choose solutions with rapid deployment capabilities that minimise business disruption during transition periods.

• Examine Support Services: Evaluate vendor support quality, training resources, and ongoing maintenance to ensure long-term success.

The Future of Contract Management

The contract management landscape continues evolving toward greater automation, artificial intelligence integration, and predictive analytics. Organisations that embrace modern legal technology platforms gain competitive advantages through improved efficiency, reduced risk exposure, and enhanced strategic decision-making capabilities.

Legal tech platforms like Pocketlaw represent the next generation of contract management solutions, offering the perfect balance of legal control and business autonomy. By eliminating manual processes and providing comprehensive contract visibility, these platforms enable organisations to transform contract management from a necessary burden into a strategic business advantage.