Contract Risk Scoring in CLM: A Practical Way to Prioritize Legal Review

Why Not Every Contract Deserves the Same Review

Legal teams are flooded with contracts, but not all carry the same risk. If everything gets the same level of scrutiny, legal becomes overwhelmed and the business slows down. Contract management software enables contract risk scoring, letting teams apply deeper review only where it matters most.

Common Inputs to Contract Risk Scores

Risk scoring frameworks typically consider:

Deal value and term length.
Counterparty type (customer, vendor, partner) and criticality.
Data exposure (PII, PHI, regulated data).
Non-standard clauses (uncapped liability, one-sided indemnities).
Jurisdiction and regulatory requirements.

How CLM Automates Risk-Based Routing

Once risk is scored, CLM can:

Auto-approve low-risk contracts using standard templates.
Route medium-risk deals through shortened review paths.
Escalate high-risk contracts to legal specialists or leadership approvals.

Operational Benefits of Risk Scoring

Risk scoring improves:

Contract turnaround time for routine agreements.
Consistency of risk decisions across teams and regions.
Visibility into portfolio-wide exposure and exceptions.

Final Thoughts

Contract risk scoring in CLM is a practical way to scale legal support. It helps the business move fast while focusing expert review on the contracts that truly need it.