Study Finds Most Enterprises Lack Trusted Contract System of Record

Why It Matters

A trusted contract system of record is the linchpin for reliable AI in legal operations. Without it, generative AI tools risk producing inaccurate advice, exposing firms to compliance breaches and financial loss. The study’s revelation that most enterprises are still stuck with fragmented repositories signals a massive market opportunity for CLM providers that can deliver end‑to‑end data integrity. Beyond compliance, the ability to transform legal language into structured, actionable data unlocks new efficiencies across procurement, finance and risk management. Companies that invest now in a true SOR will likely achieve faster contract cycle times, reduced leakage, and a competitive edge in AI‑enabled decision making.

Key Takeaways

• Survey covered 170+ enterprises across legal, procurement and IT functions.
• Most firms store contracts but lack a trusted system of record to operationalize data.
• Ajay Agrawal (Sirion) warned AI reliability hinges on data foundations.
• Leandro Doca (Capgemini) highlighted change management as a critical missing piece.
• Sally Guyer (WorldCC) cautioned that digitization does not equal data control.

Pulse Analysis

The Sirion‑WorldCC report arrives at a tipping point for LegalTech. Over the past two years, venture capital has funneled more than $3 billion into AI‑enhanced CLM startups, betting that enterprises will soon need data‑ready contracts to feed generative models. This research confirms that the supply side—software vendors—has outpaced demand; many organizations have digitized contracts but have not built the connective tissue needed for AI to act on them.

Historically, CLM adoption lagged because legal departments viewed technology as a compliance checkbox rather than a strategic asset. The current AI wave flips that narrative: contracts become data assets that can drive revenue forecasting, risk scoring and automated compliance checks. Firms that ignore the SOR gap risk becoming AI‑inefficient, where models produce outputs that must be manually verified, eroding the promised ROI.

Looking ahead, we expect three market dynamics to accelerate. First, large enterprise buyers will embed SOR requirements into procurement contracts for CLM solutions, effectively making it a non‑negotiable feature. Second, regulatory bodies in the EU and US are likely to issue guidance that treats contract data quality as a factor in AI governance, adding compliance pressure. Third, incumbents like DocuSign and Icertis will double‑down on AI‑native modules that claim to deliver a true SOR, while niche players will differentiate by offering specialized data‑cleaning and ontology services. Companies that act now to audit and restructure their contract data will not only unlock AI value but also future‑proof their legal operations against tightening oversight.