It’s that time of the year again when the Gartner Magic Quadrant for Contract Lifecycle Management tools comes out. As many of you know, Clearlaw is not a CLM vendor, but an AI tool that layers on top of leading CLM technologies, providing a deeper level of data extraction and automation. As a result, we have the privilege of working with many of the leading vendors in this space, either through formal partnerships or through client-requested integration. This allows us to work with many CLM tools and hear client feedback.
Much like Gartner, this gives Clearlaw a broad understanding of the marketplace. Based on what we are hearing, Clearlaw would love to share our thoughts on this year’s magic quadrant.
CLM is a dynamically changing marketplace
There have been significant shifts over the last several magic quadrants, both in the positions of the vendors and in the names within the magic quadrant. In fact, this magic quadrant dropped five vendors while adding three new ones, reflecting significant market shifts. We believe that this trend will continue and Clearlaw has a high opinion of some of the emerging players within this marketplace that have yet to make it onto the magic quadrant. While the Gartner Magic Quadrant is a viable starting point for an organization evaluating this segment, the pace of change is so fast that aspects of it may already be out of date.
Furthermore, much of the dynamic shift in the marketplace is coming from clients with very different needs. It is our opinion that the industry has yet to coalesce around the “right way” to do things and is reflective of a maturing marketplace where organizations are at different stages of readiness for a CLM or other legal technology. Clearlaw speaks with many organizations that are ready to fully embrace technology, while others are looking to lightly augment existing processes. Others are hesitant to embrace this transformational moment entirely. We continue to hear from legal professionals that they underuse their CLM, often because the features do not overcome a preference for working in Microsoft Word. It is our perception that this shift will take time and the marketplace will continue to evolve over the next several years.
Modularity is called out as a strength, which reflects what Clearlaw sees in the marketplace
As noted above, Clearlaw sees clients and prospects at various stages of digital maturity. Gartner expresses a similar point of view and notes the value of modularity within multiple vendors included within this report, allowing them to support clients at various stages of readiness. In fact, Clearlaw sees some organizations forgo CLM technologies entirely and instead leverage some of the many legal front door, document automation, or process management tools within the marketplace to fill their legal operation needs. These technologies lack some of the robust features of CLM tools but can support many organization's core requirements, and do so at a lower cost. Time will tell if these technologies will cannibalize the lower end of the CLM marketplace.
Ecosystems are critically important, even when Gartner isn’t specifically calling them out
While Gartner specifically praises a handful of vendors for their strong ecosystems, when one reads between the lines, it is a major distinguishing feature for vendors within the marketplace. As the segment continues to mature, many vendors will struggle to keep up with the rapid pace of change. Gartner emphasizes flexibility, extensibility, and scalability throughout the report and it is important to recognize that these are often achieved with the help of a vendor's partner ecosystem. Clearlaw is a prime example of this, providing vendors with deeper AI data extraction as clients require it.
As this marketplace matures and clients' needs grow, the CLM marketplace will struggle to meet the rapidly changing requirements and use cases of clients. Vendors with strong ecosystems, such as service partners who can configure new experiences or technology vendors who can add new features rapidly, provide vendors with the flexibility to cover additional use cases as they pop up.
AI is becoming a major differentiator between vendors.
Gartner’s grading scale includes Completeness of Vision as one of its axes and it’s no secret that leveraging AI is a major portion of that completeness. That said, Gartner's report probably underestimates the current importance of AI to the market segment as much of its data for this report was assembled over the summer as multiple CLM companies were rolling out new AI capabilities on generative technologies. It is our perspective that while this report does not state that robust AI capabilities are now table stakes in CLM, that will likely change by the time the next Gartner Magic Quadrant rolls out. In fairness, we may be biased as a leading Contracting Intelligence AI platform.
One of the limits of this report is distinguishing differences between the AI features of the various vendors. Working with many of the vendors within this space, we recognize that many of these organizations' approaches to AI are radically different from each other, both in feature sets and underlying technical approaches. As so many of these features are new, we expect that Gartner will have more data and be able to provide more clarity in the next report.
Sales, Marketing, and Brand awareness are called out repeatedly, but does that matter?
Gartner does provide points to organizations that have strong brand awareness, sales, and marketing capabilities. While this does not suggest that it’s the right technology for your business, it isn’t something that organizations selecting technology should fully discount.
Vendors with strong marketing and sales teams are often growing and have the resources to invest in product development. Vendor viability is a critical aspect of using any technology. But in our perspective, that is a tie-breaker in selecting one's tools, not a major feature.
Where does Clearlaw fit?
Clearlaw’s AI leverages multiple models to provide a deeper level of data from contracts allowing for increased automation and self-service. If you are an organization looking at an AI-empowered CLM transformation, please reach out to us and we can share with you are deeper thoughts on the CLM ecosystem and how Clearlaw is leading the data revolution in LegalTech.