6 Unexpected Costs of In-House CLM Maintenance

You’ve invested in a Contract Lifecycle Management (CLM) system, expecting it to streamline your workflows, reduce legal risk, and improve contract negotiations. However, while the implementation may seem like the hard part is over, the reality is that maintaining a CLM in-house can be more demanding than anticipated. Without dedicated oversight, the system’s early benefits can quickly diminish, leaving businesses to deal with unforeseen challenges. 

As companies evolve, so do their contract management needs. What once seemed like a well-oiled system can quickly become outdated as new regulations and business needs emerge. Clause libraries and AI models lose relevance over time, and automated workflows become inefficient. As internal teams struggle to keep up, these inefficiencies increase risks and missed opportunities. 

This article examines the hidden costs of maintaining CLM in-house and why businesses should rethink going it alone.  

Challenges in Sustaining Your CLM’s Value Beyond Launch 

At first glance, managing CLM in-house may seem like a cost-saving strategy. Organizations may assume that their legal, procurement, and IT teams can handle routine updates and oversight. However, this assumption can actually lead to higher costs and greater risks over time.

Legal teams often find continuous CLM oversight and detailed governance deprioritized—not due to lack of skill, but due to competing strategic demands. IT teams, while skilled in security and infrastructure, may not have the legal expertise required to manage complex contract workflows. Meanwhile, procurement teams often need to prioritize supplier relationships over contract system maintenance. 

This fragmented approach often results in disappointment when the system doesn’t meet the expected returns. Issues are only addressed reactively, after they've caused disruptions.

Modern CLM platforms rely on continuous updates from specialized experts to support areas like AI-driven contract playbooks and clause extraction models — tasks that are not just simple ‘IT work’ but require specialized expertise in both legal and tech to stay relevant. Without ongoing oversight, AI models can begin to drift: meaning as new data emerge (contract types, sub-clauses, etc.) AI’s recommendations become less accurate. Having inconsistent metadata and workflows that no longer align with the business needs can undermine the system’s value. 

Simply put, CLM upkeep isn’t just about technical updates—it requires ongoing legal, operational, and AI expertise to sustain efficiency. Below, we explore the top challenges of self-managing CLM and actionable steps to overcome them. 

1. Compliance Risks and Legal Exposure

Compliance is never static. Whether it’s CCPA, HIPAA, or other industry-specific mandates, legal requirements evolve regularly. Staying compliant requires ongoing attention—not just an annual review. Clause libraries, approval workflows, and data governance policies must be proactively updated to keep pace with these changes. 

For instance, if a company in the financial sector accidentally used an outdated interest rate clause in dozens of contracts due to a stale clause library, it could face significant remediation fees. This highlights the risks businesses face when in-house teams lack the bandwidth to track and implement updates. Without dedicated oversight, businesses are at risk of regulatory penalties and expensive legal disputes. 

2. Inefficiencies that Slow Down Business Operations

One of the biggest benefits of CLM is speed—automated workflows, pre-approved clause libraries, and streamlined approvals should significantly reduce contract turnaround times. However, when CLM maintenance is neglected, these efficiencies can erode.

Outdated approval workflows and conditional logic can significantly delay contract approvals, negatively impacting revenue recognition. Template mismanagement can also lead to excessive redlining, prolonging negotiation cycles. For instance, in a neglected CLM environment, a single incorrectly routed clause revision can add days or weeks to the review cycle, which can frustrate clients and further delay revenue recognition. This is a reminder that a stagnant CLM workflow can cause business agility to suffer.

3. Poor Data Integrity and Clause Inconsistencies

Contract language isn’t static—it evolves with regulatory updates, market trends, and shifting business priorities. Yet, without structured processes, including version control and periodic metadata audits, in-house teams risk inconsistencies and unreliable data. Inconsistent tagging of metadata makes search and reporting unreliable, leading to missed obligations or renewal deadlines. As a result, contract terms become inconsistent across departments, exposing businesses to unnecessary risk.

A healthcare provider, for instance, might discover conflicting indemnification clauses across its vendor agreements. The issue? A clause library that hadn’t been updated in over a year. Without standardized contract governance, businesses risk enforceability issues that could lead to costly renegotiations or litigation.

4. Missed Revenue Opportunities 

When CLM maintenance is deprioritized, financial risks pile up. Poor obligation tracking can lead to missed deliverables or noncompliance penalties. Neglected renewal management may result in contracts auto-renewing under outdated pricing models, causing revenue leakage.

For instance, organizations might not realize they are missing automatic renewal fees or volume discount triggers until it has already cost them. This is one common example of how having an outdated CLM can equate to leaving money on the table.

5. Security & IT Maintenance Challenges

CLM isn’t just a legal tool—it’s an enterprise system requiring continuous security updates, user access governance, and IT oversight. When responsibilities like role-based access control (RBAC) and user permission audits are overlooked, vulnerabilities can emerge—leading to data breaches or costly regulatory exposure.

Think of inactive users still having access to CLM months after leaving the organization due to lapses in user access governance. Meanwhile, delayed security patches can expose sensitive contract data. Without ongoing security maintenance, businesses risk both regulatory penalties and data breaches.

6. Staff Turnover & Knowledge Silos

When CLM expertise is concentrated in a few key individuals, staff turnover becomes a serious risk. New hires often struggle with undocumented workflows or the absence of detailed SOPs and legal playbooks, increasing training costs and disrupting contract operations. Similarly, AI-driven features—such as contract analytics and automated negotiation recommendations—deteriorate without regular oversight.

Imagine facing months of contract processing delays after your lead CLM administrator left. Your team might need to reconstruct processes from scratch due to insufficient documentation — this is a clear case of not having institutional knowledge continuity, and it can cause operational setbacks.

Why a CLM Operations Service is a Smart Investment

CLM can bring a wealth of benefits to a business, but there are hidden costs of a DIY approach to maintaining that CLM after it has been implemented. Examples of this include compliance risks, operational inefficiencies, security vulnerabilities, and ultimately, lost revenue. True value lies in adaptability, not just stability. Having an expert partner to help you maintain the system ensures your CLM platform evolves with industry standards through continuous improvement and expert training.

By handing off parts of the system operations, you free your internal teams to focus on strategic priorities, driving growth and innovation.